Nexpu Ltd 20-F for FY2025
Nexpu Ltd. (DPU)
About this 20-F
Nexpu Ltd filed this 20-F on April 8, 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
- $8.04M
- up 114.3% from $3.75M a year earlier
- Net loss
- $24.02M
- compared with a net loss of $8.68M a year earlier
- Diluted EPS
- -$26.92
- compared with -$41.37 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
OR
For the fiscal year ended
OR
OR
Date of event requiring this shell company report for the transition period from ________to ________
Commission file number:
(Exact Name of Registrant as Specified in its Charter)
N/A
(Translation of Registrant’s Name into English)
(Jurisdiction of Incorporation or Organization)
Nanshan District,
Zip:
(Address of principal executive offices)
Chief Executive Officer
Tel:
Email:
Nanshan District,
Zip:
(Name, Telephone, E-mail 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 | Name of Each Exchange on Which Registered | |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title of Class)
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:
As of December 31, 2025, the issuer had
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
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 ☐
Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 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 not to use the extended transition
period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange
Act.
† 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 ☐ No
TABLE OF CONTENTS
| INTRODUCTION | iii | |
| PART I | 1 | |
| ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | 1 |
| ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE | 1 |
| ITEM 3. | KEY INFORMATION | 1 |
| ITEM 4. | INFORMATION ON THE COMPANY | 34 |
| ITEM 4A. | UNRESOLVED STAFF COMMENTS | 58 |
| ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 58 |
| ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 74 |
| ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 81 |
| ITEM 8. | FINANCIAL INFORMATION | 85 |
| ITEM 9. | THE OFFER AND LISTING | 86 |
| ITEM 10. | ADDITIONAL INFORMATION | 86 |
| ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 95 |
| ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 95 |
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| PART II | 96 | |
| ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | 96 |
| ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 96 |
| ITEM 15. | CONTROLS AND PROCEDURES | 96 |
| ITEM 16. | [RESERVED] | 97 |
| ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT | 97 |
| ITEM 16B. | CODE OF ETHICS | 97 |
| ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 97 |
| ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES | 98 |
| ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 98 |
| ITEM 16F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT | 98 |
| ITEM 16G. | CORPORATE GOVERNANCE | 99 |
| ITEM 16H. | MINE SAFETY DISCLOSURE | 99 |
| ITEM 16I. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 99 |
| ITEM 16J. | INSIDER TRADING POLICIES | 99 |
| ITEM 16K. | CYBERSECURITY | 100 |
| PART III | 101 | |
| ITEM 17. | FINANCIAL STATEMENTS | 101 |
| ITEM 18. | FINANCIAL STATEMENTS | 101 |
| ITEM 19. | EXHIBITS | 101 |
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INTRODUCTION
Unless otherwise indicated, numerical figures included in this Annual Report on Form 20-F (the “Annual Report”) have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.
For the sake of clarity, this Annual Report follows the English naming convention of first name followed by last name, regardless of whether an individual’s name is Chinese or English. Numerical figures included in this Annual Report have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. Certain market data and other statistical information contained in this Annual Report are based on information from independent industry organizations, publications, surveys and forecasts. Some market data and statistical information contained in this Annual Report are also based on management’s estimates and calculations, which are derived from our review and interpretation of the independent sources listed above, our internal research and our knowledge of the PRC information technology industry. While we believe such information is reliable, we have not independently verified any third-party information and our internal data has not been verified by any independent source.
| ● | “AHFCAA” refers to the Accelerating Holding Foreign Companies Accountable Act; | |
| ● | “China” or the “PRC” refers to the People’s Republic of China. When used in the case of laws, regulations and rules, “China” or “the PRC” refers to only such laws, regulations and rules of mainland China. When used in the case of government, governmental authorities, regulatory agencies, courts, jurisdictions, tax, entities, enterprises, individuals and residents of “China” or “the PRC” or “Chinese”, it refers to only such government, governmental authorities, regulatory agencies, courts, jurisdictions, tax, entities, enterprises, individuals and residents of mainland China; | |
| ● | Depending on the context, “we”, “us”, “our company”, “our”, the “Company”, “WAI” and “KingWin” refer to Top KingWin Ltd, a Cayman Islands company, and its subsidiaries, Sky KingWin Ltd, SKY KINGWIN (HK) LIMITED, and Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd., Guangdong Tiancheng Jinhui Enterprise Management Consulting Co., Ltd., Jiangsu Tiancheng Jinhui Management Consulting Co., Ltd., Chongqing Tiancheng Jinhui Enterprise Management Consulting Co., Ltd., Shenzhen Tiancheng Chuangxin Technology Co., Ltd., Guji Technology (Shenzhen) Co., Ltd., Industry Insights Consulting LTD, Strategic Research Solutions Limited (HK), Top KingWin Technology Inc., Top KingWin Hi Tech Inc., unless the context otherwise indicates; | |
| ● | “CAC” refers to the Cyberspace Administration of China; | |
| ● | “CSRC” refers to the China Securities Regulatory Commission; | |
| ● | “HFCA Act” refers to the Holding Foreign Companies Accountable Act; | |
| ● | “M&A Rules” refers to the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors of China; | |
| ● | “MOFCOM” refers to the Ministry of Commerce of China; | |
| ● | “Negative List” refers to the Special Administrative Measures for the Access of Foreign Investment (Negative List); | |
| ● | “NDRC” refers to the National Development and Reform Commission of China; | |
| ● | “RMB” or “yuan” refers to the legal currency of China; | |
| ● | “SAFE” refers to the State Administration of Foreign Exchange in China; | |
| ● | “SAIC” refers to the State Administration for Industry and Commerce in China and is currently known as State Administration for Market Regulation; | |
| ● | “SAT” refers to the PRC State Administration of Taxation; |
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| ● | “SAMR” refers to the former State of Administration of Industry and Commerce of China, which has been merged into the State Administration for Market Regulation; | |
| ● | “SCNPC” refers to the Standing Committee of the National People’s Congress of China; | |
| ● | “KingWin BVI” refers to Sky KingWin Ltd, a company organized under the laws of British Virgin Islands, which is wholly-owned by KingWin; | |
| ● | “KingWin HK” refers to SKY KINGWIN (HK) LIMITED, a company organized under the laws of Hong Kong, which is wholly-owned by KingWin BVI; | |
| ● | “Tiancheng Jinhui” refers to Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd., a limited liability company organized under the laws of China, which is wholly-owned by KingWin HK; | |
| ● | “U.S. GAAP” refers to generally accepted accounting principles in the United States; and |
| ● | “USD” or “$” refers to the legal currency of the United States. |
Top KingWin’s reporting currency is USD. However, substantially all of our consolidated revenues, costs, expenses and assets are denominated in RMB. This Annual Report contains translations of certain foreign currency amounts into USD for the convenience of the reader. All translations of RMB are calculated at the rate of $1.00=RMB7.0999 as of December 29, 2023 and $1.00=RMB7.0809 for the year ended December 31, 2023. All translations of RMB are calculated at the rate of $1.00=RMB 7.2993 as of December 31, 2024 and $1.00=RMB7.1957 for the year ended December 31, 2024. All translations of RMB are calculated at the rate of $1.00=6.9931 as of December 31, 2025 and $1.00=RMB7.1875 for the year ended December 31, 2025. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at such rate, or at any other rate.
Discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.
Summary of Risk Factors
An investment in our Class A ordinary shares involves significant risks. Below is a summary of material risks we face, organized under relevant headings. These risks are discussed more fully in “Item 3.D. Key Information—Risk Factors.”
Risks Related to Our Business and Industry
Risks and uncertainties related to our business and industry, beginning on page 1 of this Annual Report, include, but are not limited to, the following:
| ● | We have a limited operating history and are subject to the risks encountered by early-stage companies. See a more detailed discussion of this risk factor on page 1 of this Annual Report. |
| ● | Our historical growth may not be indicative of our future performance, which is dependent upon factors beyond our control such as market conditions of the equity investment industry in China. See a more detailed discussion of this risk factor on page 2 of this Annual Report. |
| ● | If we are unable to retain existing clients or attract new ones, or to attract sufficient spending from our clients, our business, results of operations and financial condition could be materially and adversely affected. See a more detailed discussion of this risk factor on page 3 of this Annual Report. |
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| ● | If we lose the services of any of our key executive officers and other key employees, or are unable to retain, recruit and hire experienced staff, our ability to effectively manage and execute our operations and meet our strategic objectives could be harmed. See a more detailed discussion of this risk factor on page 3 of this Annual Report. |
| ● | The industry in which we operate is highly fragmented and intensively competitive, and if we fail to compete effectively with current or future competitors, our business, results of operations and financial conditions could be materially and adversely affected. See a more detailed discussion of this risk factor on page 4 of this Annual Report. |
| ● | Unauthorized use of our intellectual property by third parties, and the expenses incurred in protecting our intellectual property rights, may adversely affect our business, reputation and competitive edge. Intellectual property is crucial to our competitiveness and success. See a more detailed discussion of this risk factor on page 9 of this Annual Report. |
Risks Related to Our IT Solutions Business
| ● | We have an evolving business model with still untested growth initiatives. See a more detailed discussion of this risk factor on page 13 of this Annual Report. |
| ● | Our business is dependent on our ability to attract and retain highly skilled professionals. See a more detailed discussion of this risk factor on page 13 of this Annual Report. |
| ● | Our business is dependent on our collaboration with our vendors and suppliers and changes or difficulties in our relationships with our vendors and suppliers may harm our business and financial results. See a more detailed discussion of this risk factor on page 13 of this Annual Report. |
| ● | At this stage, our products portfolio remains limited, and our gross margin and results of operations may be adversely affected in the future by a number of factors, including decreases in our average selling prices of products, shifts in our product mix, or price increases of certain components or third-party services due to inflation, supply chain constraints, or for other reasons. See a more detailed discussion of this risk factor on page 14 of this Annual Report. |
| ● | We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise. See a more detailed discussion of this risk factor on page 14 of this Annual Report. |
| ● | We may seek an acquisition with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel. See a more detailed discussion of this risk factor on page 14 of this Annual Report. |
| ● | Our ability to continue to develop and expand our service offerings to address emerging business demands and technological trends, including our ability to sell differentiated services, may impact our future growth. If we are not successful in meeting these business challenges, our business, financial condition and results of operations may be materially and adversely affected. See a more detailed discussion of this risk factor on page 14 of this Annual Report. |
| ● | If we do not succeed in attracting new clients for our technology services, we may not achieve our revenue growth goals. See a more detailed discussion of this risk factor on page 15 of this Annual Report. |
| ● | Our investment costs incurred in developing our software products and platforms may not yield the intended results and can adversely impact our results of operations. See a more detailed discussion of this risk factor on page 15 of this Annual Report. |
| ● | Software failures, breakdowns in the operations of our servers and communications systems or the failure to implement system enhancements could harm our business. See a more detailed discussion of this risk factor on page 15 of this Annual Report. |
| ● | We plan to use open-source software in providing services to our clients. There are risks associated with the use of open-source software that may have an adverse effect on our results of operations and financial condition. See a more detailed discussion of this risk factor on page 16 of this Annual Report. |
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| ● | The AI industry faces its own risks and changing and extensive regulations. See a more detailed discussion of this risk factor on page 16 of this Annual Report. |
| ● | Our inability to protect our systems and data from continually evolving cybersecurity risks or other technological risks could affect our reputation among our clients and their customers and may expose us to liability. See a more detailed discussion of this risk factor on page 17 of this Annual Report. |
| ● | We may be subject to privacy, data protection and information security laws in the jurisdictions in which we operate. See a more detailed discussion of this risk factor on page 18 of this Annual Report. |
Risks Related to Our Corporate Structure
Risks related to our corporate structure, beginning on page 18 of this Annual Report, include, but are not limited to, the following:
| ● | The dual-class structure of our ordinary shares has the effect of concentrating voting control with our Chairman and Chief Executive Officer, directors and their affiliates. See a more detailed discussion of this risk factor on page 18 of this Annual Report. |
| ● | You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. See a more detailed discussion of this risk factor on page 19 of this Annual Report. |
Risks Related to Doing Business in China
We are based in China and have all of our operations in China. We face risks and uncertainties related to doing business in China in general, including, but not limited to, the following:
| ● | Changes in China’s economic, political or social conditions or government policies, which could occur quickly with little advance notice, could have a material adverse effect on our business and operations. See a more detailed discussion of this risk factor on page 20 of this Annual Report. |
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| ● | Uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit the legal protection available to you and us. See a more detailed discussion of this risk factor on pages 21 of this Annual Report. | |
| ● | Substantial uncertainties exist with respect to the interpretation and implementation of newly enacted PRC Foreign Investment Law and its Implementation Rules and how they may impact the viability of our corporate structure, corporate governance, and operations. See a more detailed discussion of this risk factor on page 22 of this Annual Report. | |
| ● | We rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct or fund our whole business. To the extent any funds or assets in the business is in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong. See a more detailed discussion of this risk factor on page 25 of this Annual Report. |
| ● | To the extent any funds or assets in the business is in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong. See a more detailed discussion of this risk factor on page 25 of this Annual Report. |
| ● | PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us. See a more detailed discussion of this risk factor on page 26 of this Annual Report. |
Risks Related to Our Class A Ordinary Shares
Risks and uncertainties related to our Class A Ordinary Shares, beginning on page 29 of this Annual Report, include, but are not limited to, the following:
| ● | We may experience extreme stock price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares. See a more detailed discussion of this risk factor on page 29 of this Annual Report. |
| ● | Shares eligible for future sale may adversely affect the market price of our Class A Ordinary Shares, as the future sale of a substantial amount of outstanding Class A Ordinary Shares in the public marketplace could reduce the price of our Class A Ordinary Shares. See a more detailed discussion of this risk factor on page 30 of this Annual Report. |
| ● | If our financial condition deteriorates, we may not meet continued listing standards on the Nasdaq Capital Market. See a more detailed discussion of this risk factor on page 30 of this Annual Report. |
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FORWARD-LOOKING INFORMATION
This Annual Report contains forward-looking statements. These statements are made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “may,” “intend,” “is currently reviewing,” “it is possible,” “subject to” and similar statements. Among other things, the sections titled “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects” in this Annual Report, as well as our strategic and operational plans, contain forward-looking statements. We may also make written or oral forward-looking statements in our filings with the SEC, in our annual report to shareholders, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material and adverse effect on our financial condition and results of operations for one or more prior periods. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this Annual Report. All information provided in this Annual Report and in the exhibits is as of the date of this Annual Report, and we do not undertake any obligation to update any such information, except as required under applicable law.
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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
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
We have a limited operating history and are subject to the risks encountered by early-stage companies.
Our operating entity, Tiancheng Jinhui, was established in October 2018. As a development-stage company, our business strategies and model are constantly being tested by the market and operating results, and we work to adjust our allocation of resources accordingly. As such, our business may be subject to significant fluctuations in operating results in terms of amounts of revenues and percentages of total with respect to the business segments.
1
We are, and expect for the foreseeable future to be, subject to all the risks and uncertainties, inherent in a development- stage business. As a result, we must establish many functions necessary to operate a business, including expanding our managerial and administrative structure, assessing and implementing our marketing program, implementing financial systems and controls and personnel recruitment. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies with a limited operating history. These risks and challenges are, among other things:
| ● | we may require additional capital to develop and expand our operations which may not be available to us when we require it; |
| ● | our marketing and growth strategy may not be successful; |
| ● | our business may be subject to significant fluctuations in operating results; and |
| ● | we may not be able to attract, retain and motivate qualified professionals. |
Our future growth will depend substantially on our ability to address these and the other risks described in this Annual Report. If we do not successfully address these risks, our business would be significantly harmed.
Our historical growth may not be indicative of our future performance, which is dependent upon factors beyond our control such as market conditions of the equity investment industry in China.
Our revenues increased by 114%, or $ 4,288,018, from $3,750,352 in 2024 to $8,038,370 in 2025. The primary driver of this growth was a 358% year-on-year increase in sales of information technology (“IT”) solution related products including devices supporting data collection and analysis, and artificial intelligent (“AI”) robots, in the current period, partially offset by a 64% year-on-year decrease in corporate training services and consulting services. This strong overall performance was predominantly fueled by an explosive 358% year-on-year surge in sales of IT solution products, which served as the core growth engine and completely offset the substantial adverse impact caused by a sharp 64% year-on-year decrease in corporate training and consulting services. Consequently, the Company’s revenue structure has become highly concentrated and heavily dependent on the IT solution product segment, indicating that the Company needs to closely monitor the long-term sustainability of its IT-driven growth momentum, conduct in-depth analysis of the underlying causes for the contraction in traditional service lines, and formulate targeted improvement strategies to optimize its revenue mix, reduce business concentration risks, and support steady and healthy long-term operational development.
2
If we are unable to retain existing clients or attract new ones, or to attract sufficient spending from our clients, our business, results of operations and financial condition could be materially and adversely affected.
In order to increase our revenue and maintain our growth, we must retain existing clients and attract new ones, and encourage their usage of our services. As is common in the industry, we do not have long-term service agreements with our clients with respect to each of our business lines. A substantial portion of our revenue comes from agreements that are on a project-by-project basis or for a term of one year or shorter, such as agreements for customized reports and marketing skills training. Revenue from these agreements is not recurrent in nature, which exposes us to the risks of uncertainty and potential volatility with respect to our revenue. Our success depends in large part on our ability to continue to offer high-quality services through our service platform in a cost-effective manner. To this end, we must continue to expand our offline service offerings and keep abreast of user preferences and market trends. Clients may cease their usage of our services or may only be willing to purchase our services at reduced prices if we do not deliver services in an effective manner, or if they do not believe that their spending with us will generate a competitive return or effect as compared to alternative service providers, which will adversely affect our business. Our ability to retain existing clients and attract new ones also depends on the following factors, some of which are out of our control:
| ● | our brand recognition and market presence; |
| ● | the competitiveness of our pricing and payment terms for our clients, which may, in turn, be constrained by our capital and financial resources; |
| ● | the market acceptance of new services and functionalities we may introduce; |
| ● | mergers, acquisitions or other consolidation among market players; and |
| ● | the effects of domestic and global economic conditions on the development of the equity investment industry generally. |
If we are unable to retain our existing clients and attracting new clients due to any of the foregoing factors, our business will be adversely affected. Further, if our existing clients decrease or cease their usage of our services, we may be unable to acquire new clients that spend similarly or even more for our services, and our ability to maintain and/or grow our revenue may be materially and adversely affected.
If we lose the services of any of our key executive officers and other key employees, or are unable to retain, recruit and hire experienced staff, our ability to effectively manage and execute our operations and meet our strategic objectives could be harmed.
Our future success depends on the continued service of our key executive officers and other key employees. We benefit from the leadership of a strong management team with proven vision, rich professional work experience, and extensive knowledge of China’s corporate business training industry and corporate consulting industry. We also rely on a number of key personnel for the development and operation of our business. In addition, we will need to continue attracting and retaining skilled and experienced staff for our businesses to maintain our competitiveness. If one or more of our key personnel are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all and may incur additional expenses to recruit and train new personnel, our business could be materially and adversely affected. In addition, if any of our executive officers or key employees joins a competitor or forms a competing company, we may lose know-how, trade secrets and clients. Substantially all of our employees, including each of our executive officers and key employees, have entered into confidentiality agreements with us, which contains customary non-compete provisions. Although non-compete provisions are generally enforceable under PRC laws, PRC legal practice regarding the enforceability of such provisions is not as well-developed as in countries such as the United States. Thus, if we need to enforce our rights under the non-compete provisions, we cannot assure you that a PRC court would enforce such provisions. If we lose the services of any of our key executive officers, senior management, or are unable to retain, recruit and hire experienced staff, our ability to effectively manage and execute our operations and meet our strategic objectives could be harmed.
Our business could suffer if we are unable to retain or hire quality in-house writers and editors.
We maintain a professional in-house content creation team to create high-quality original content. We intend to continue to invest resources in our in-house writer and editorial team to maintain and improve content creation capabilities. Nevertheless, the demand and competition for talents is intense in our industry, particularly for skilled writers and editors. Therefore, we may need to offer high compensation and additional benefits to maintain a skilled in-house content creation team, which could increase our expenses. If we fail to compete effectively for talents, or to retain existing writers or editors, or fail to otherwise maintain an in-house content creation team at reasonable costs, our in-house content creation capabilities would be negatively affected. If we are unable to offer high-quality original content in a cost-effective manner, our user experience may be adversely affected, and we may suffer from reduced user traffic. Our business, results of operations and financial condition may be materially and adversely affected as a result.
3
The industry in which we operate is highly fragmented and intensively competitive, and if we fail to compete effectively with current or future competitors, our business, results of operations and financial conditions could be materially and adversely affected.
The equity investment service industry in China is highly fragmented and intensely competitive. Market players in the equity investment service industry primarily include service platforms for equity investment industry, referring to service providers which offer two or more types of equity investment services, and other service providers. Our ability to grow and stand out among our peers and competitors in this highly fragmented industry depends on many factors, including our ability to expand our geographical coverage in China, to improve our offline service offerings and enhance online-offline synergy. We cannot assure you that we will achieve any of the foregoing goals, and the failure to achieve such goals could materially and adversely affect our business, results of operations and financial condition. Moreover, the highly fragmented market has presented significant likelihood for market consolidation. If one or more of our competitors, especially other top players in the market, were to merge or partner with another of our competitors, the change in the competitive landscape could also adversely affect our ability to compete effectively or may even cause us to lose our leading position in the market, which may in turn materially and adversely affect our reputation, business, results of operations and financial condition.
Increasing competition within our industries could have an impact on our business prospects.
We operate in an industry where new competitors can easily enter into since there are no significant barriers to entry. We also face many competitors in the knowledge sharing industry where a number of competitors have been in business longer than us. Competing companies may have significantly greater financial and other resources than we have and may offer services that are more attractive to prospective clients; and increased competition would have a negative impact on both our revenues and our profit margins.
Our failure to obtain necessary permits for our offline industry events may subject us to adjustment or cancellation of industry events and may adversely affect our business, results of operations and financial condition.
While no license is required for holding offline events in general under PRC laws and regulations, we may be required to obtain an event-specific security permit or make relevant filings for large-scale mass activities each time before we hold an offline industry event if the estimated number of participants exceeds a certain number of people. Although we will endeavor to obtain all necessary permits or complete all required filings according to our estimate of the condition of each specific event and currently we do not plan to hold large-scale events requiring security permits or filings, we cannot assure you that we will be able to obtain relevant permits or complete relevant filings in a timely manner or at all in order to organize our offline industry events as planned, as the regulatory practices with respect to an offline industry event may vary from time to time and the local authorities retain broad discretion in enforcing the relevant requirements. In addition, the permit requirements in China are constantly evolving, and we may be subject to more stringent regulatory requirements due to political or economic changes in the future. If we fail to obtain relevant permits or complete relevant filings to organize our offline industry events as planned, we may have to adjust our event coverage and other arrangements, or even cancel the relevant events. If our offline industry events are reduced in size or even canceled, our business, results of operations and financial condition may be materially and adversely affected. Even if we have obtained all prerequisite permits or completed all required filings, government authorities may unexpectedly suspend our scheduled offline industry events due to a variety of reasons beyond our control. Local police security authorities may prevent participants from entering our offline industry events and impose administrative penalties on us if the visitor flow exceeds the prescribed limit. Such abrupt suspensions and restrictions might adversely affect the brand-building and networking activities of our industry clients, which in turn could discourage them from participating in our future events and materially and adversely affect our business, results of operations and financial condition.
Fluctuation in the value of the Renminbi and other currencies may have a material adverse effect on the value of your investment.
Our financial statements are expressed in USD. However, all of our revenues and expenses are denominated in Renminbi (RMB). Our exposure to foreign exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies of each entity. We do not believe that we currently have any significant direct foreign exchange risk and have not hedged exposures denominated in foreign currencies or any other derivative financial instruments. However, the value of your investment in our Class A Ordinary Shares will be affected by the foreign exchange rate between USD and RMB because the primary value of our business is effectively denominated in RMB, while the Class A Ordinary Shares will be traded in USD.
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The value of the RMB against the USD and other currencies is affected by, among other things, changes in China’s political and economic conditions and China’s foreign exchange policies. The People’s Bank of China regularly intervenes in the foreign exchange market to limit fluctuations in RMB exchange rate and achieve certain exchange rate targets, and through such intervention kept the USD-RMB exchange rate relatively stable.
As we may rely on dividends paid to us by our PRC subsidiaries, any significant revaluation of the RMB may have a material adverse effect on our revenues and financial condition, and the value of any dividends payable on our Class A Ordinary Shares in foreign currency terms. For example, if we decide to convert our RMB into USD for the purpose of making payments for dividends on our Class A Ordinary Share or for other business purposes, appreciation of the USD against the RMB would have a negative effect on the USD amount available to us. Furthermore, appreciation or depreciation in the value of the RMB relative to the USD would affect our financial results reported in USD terms without giving effect to any underlying change in our business or results of operations. We cannot predict the impact of future exchange rate fluctuations on our results of operations and may incur net foreign exchange losses in the future. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert into foreign currencies.
The success of our business depends on our ability to maintain and enhance our brand.
We believe that maintaining and enhancing our brand is significant to the success of our business. Our operational and financial performance is highly dependent on the strength of our well-recognized brand, which is critical for forging long-term relationships with China’s investors, entrepreneurs and growth enterprises, and governmental agencies at low client acquisition cost. However, we cannot assure you that we will be able to maintain and enhance our brand and remain our leadership position in China’s equity investment service industry. In addition, negative publicity about us, our services, operations and our management could threaten the perception of our brand. We may receive negative publicity, including negative Internet and blog postings about our Company, our business, our management, our services or our affiliates. Such negative publicity may come from malicious harassment or unfair competition acts by third parties. We may even be subject to government or regulatory investigation as a result of such negative publicity and may be required to spend significant time and incur substantial costs to defend ourselves, and we may not be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Harm to our reputation and client confidence can also arise for many other reasons, including misconduct of our employees or any third parties we conduct business with. As a result, our brand may suffer in the marketplace, our operational and financial performance may be negatively affected and the price of our Class A Ordinary Shares may decline.
We may not be able to successfully compete with our competitors, which could materially and adversely affect our business, results of operations and financial condition.
The equity investment service industry in China is becoming increasingly competitive, and we expect it to remain so. We compete primarily with other equity investment service providers including data service providers, online advertising service providers, offline event service providers, consulting service providers, training service providers, etc. As China’s equity investment service industry continues to evolve and grow, we may face increased competition from new market entrants. We compete based on a number of factors, including industry experience and insights, ability to adapt to evolving needs of our clients, brand recognition, network, price, breadth of services offered, level of service integration and technology capabilities. If we fail to compete effectively against our competitors, our business, results of operations and financial condition would be materially and adversely affected. Our competitors may operate with different business models, have different cost structures, participate selectively in different market segments or offer a wider range of products and services. They may ultimately prove more successful or more adaptable to new regulatory, technological and other developments. Some of our current and potential competitors may have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support of their products and services. Our competitors may also have longer operating histories, more extensive client base, greater brand recognition and broader partner relationships than us. Additionally, a current or potential competitor may acquire one or more of our existing competitors or form a strategic alliance with one or more of our competitors. Our competitors may also from time to time solicit our employees in order to compete in each of our business lines; and certain of our services are newly developed and may fail to compete effectively and achieve market adoption. If we are unable to compete effectively with our competitors, we could experience a decline of our market share, which in turn would materially and adversely affect our business, results of operations and financial condition.
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Our clients with rapidly evolving business may face inherent risks and uncertainties, which could adversely affect their demands for our services.
We are dedicated to serving, among others, entrepreneurs and growth enterprises and investors, whose businesses and prospects are constantly changing and rapidly evolving. As China has witnessed significant economic development and transformation in recent years, an increasing number of innovative business models have emerged, which further contributes to China’s economic growth and the prosperity of the equity investment industry. However, there are significant risks and uncertainties with respect to the growth and sustained profitability of these emerging businesses. The short-term growth of new businesses may not be as fast as we expect, while the long-term viability and prospects of new business models remain relatively untested. Our future business, results of operations and financial condition will depend on the development of these new businesses and the performance of our clients, which is in turn subject to the following factors:
| ● | our clients’ ability to enhance their existing products and services, to introduce new products and services that meet market preferences, and to expand their markets; |
| ● | the complex regulatory landscape and governmental measures affecting the emerging businesses in China; |
| ● | our clients’ ability to incorporate technological advancements and predict and adapt to market changes; |
| ● | the appeal of the new businesses to continue to attract, retain, manage and motivate the key talents; and |
| ● | the global and domestic economic fluctuations and market trends. |
Most of these factors are beyond the control of our clients and ourselves. For example, if new regulatory measures impose strict licensing requirements on emerging businesses in which our clients operate, they may incur substantial cost in obtaining the requisite licenses and suffer declines in their profits. Moreover, if they are unable to meet the licensing requirements, they may be compelled to discontinue successful business operations, or be subject to warnings, fines and confiscation of gains. Such significant business interruptions may reduce our clients’ demand for our services, and therefore, materially and adversely affect our business, results of operations and financial condition.
The implementation of our expansion plan may not be successful and may lead to increases in our costs and expenses, which may adversely affect our profitability, business, results of operations and financial condition.
As part of our growth strategies, we intend to, among others, expand our geographical coverage in China. There is no assurance that we can successfully implement such strategies to capture the market demand or that such strategies can be implemented according to our proposed schedules and estimated costs, due to various factors, such as the sufficiency of financial resources, and our ability to employ sufficient and competent personnel. In addition, benefits to be generated from such expansion plan, such as increase in revenue, may not be as expected due to factors beyond our control, such as changes in general market conditions and client demands, the economic and political environment in the areas where we intend to expand into. Furthermore, in carrying out our expansion plan, we expect to incur additional costs and expenses, such as employee benefit expenses, selling and marketing expenses, rental expenses and depreciation and amortization. Our plan to strengthen our sales and marketing efforts through online advertisement placements and sales and marketing employee recruitment is also expected to result in an increase in our selling and marketing expenses. Such factors may cause a delay in realizing the benefits of our expansion plan and an increase in our overall costs and expenses, or even prevent us from generating sufficient earnings to cover the costs and hence, our results of operations, in particular our profitability, may be adversely affected.
The continued expansion of our business may also place significant strain on our managerial, operational, technological, financial and other resources. To manage and support our growth, we may need to improve our existing operational and administrative systems, improve our financial and management controls, and enhance our ability to recruit, train and retain additional qualified personnel. All of these endeavors will require substantial attention and time from management and may incur significant additional expenditures. We cannot assure you that we will be able to manage our future growth effectively and efficiently, and our ability to capitalize on new business opportunities may be materially and adversely affected if we fail to do so, which could in turn materially and adversely affect our business, results of operations, financial condition and prospects.
In view of the above-mentioned uncertainties, there is no assurance that our expansion plan will materialize, or be completed by the predetermined timeframe, or that our objectives will be fully or partially achieved. In the event that we fail to implement our expansion plan as planned, or our expansion plan fails to achieve expected benefits, our profitability, results of operations and financial condition may be materially and adversely affected.
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Our improvements of our existing services and introduction of new services may not be successful or may fall short of expected results.
Our success depends in large part on our ability to improve our existing services, introduce new services and enhance our market competitiveness. The success of any improvement or new service depends on a number of factors, including actual performance, pricing level, market competition, industry trend and client demand, many of which are beyond our control. However, our future plans may require us to devote significant financial and managerial resources, and we cannot assure you that we will achieve our goals to successfully improve our existing services and achieve market acceptance of our new services, which could compromise our ability to serve our users and clients effectively. If our equity investment services become less attractive to existing and potential users and clients, our business, results of operations and financial condition may be materially and adversely affected.
If we fail to help facilitate the brand-building and networking of the sponsors and participants of our offline industry events due to factors beyond our control, our operational and financial results might suffer.
Sponsors and participants are attracted to our offline industry events due to the brand-building and networking prospects. The brand-building and networking results at our offline industry events might fail to meet the expectation of those sponsors and participants due to factors beyond our control, including among others, changes in the regulatory environment, a downturn or unfavorable development in the equity investment industry in China, overall domestic or global economic downturn and the resulting decrease in investment ability and willingness, and contingencies that occur on event dates such as inclement weather or sudden public security measures which affect our ability to host the events effectively, or at all. Other factors may also affect our ability to host satisfactory offline industry events, such as conflicts with other local events, road traffic control, outbreaks of contagious disease or the potential for infection, or acts of nature, such as earthquakes, storms, and typhoons. If we fail to help facilitate the brand-building and networking of offline industry event sponsors and participants, they might be less inclined to participate in our future events, which could materially and adversely affect our business, results of operations and financial condition.
Our failure to honor our obligations may lead to our refund obligation, client dissatisfaction, or even clients’ disputes with us, which may adversely affect our reputation, business, results of operations and financial condition.
Clients for customized reports, offline industry events and offline course offerings generally prepay us a majority of the total contract values upon signing. Our contract liabilities primarily consisted of these prepayments. We had contract liabilities of $432,375 and $489,523 as of December 31, 2025 and December 31, 2024. Our contract liabilities are generally not refundable. However, if we fail to honor our obligations in respect of our contract liabilities, clients may request to cancel their agreements with us or ask for a partial or full refund, which may lead to our refund obligation, client dissatisfaction or even clients’ disputes with us. In the event that we are required to refund some or all of the prepayments from our clients pursuant to the contract provisions, we may not have the cash or other available resources to fulfill the refund obligation. Even if we are able to fulfill the refund obligation from available resources, we may need to seek additional sources of capital to fund our operations, which funding may not be available when needed or on acceptable terms. In either of those circumstances, our business, results of operations, financial condition and reputation may be materially and adversely affected. Furthermore, in the future, clients may elect not to prepay us for our services in which case we would have to find other sources of funding for our operations, capital expenditures and expansion plans, which would be costly as compared to the aforementioned cost-free client prepayment funding and which may not be available when needed or on acceptable terms.
We may be held liable for injuries to individual participants of our offline industry events, which may materially and adversely affect our reputation, business, results of operations and financial condition.
We take event security seriously, and make every effort to ensure the safety of the participants during our offline industry events, such as industry-wide forums and outdoor challenges. However, we cannot guarantee that no physical injury will occur during our offline industry events, for which we could be held liable. Under the PRC laws and regulations, the organizer of a large-scale group activity shall bear tort liability for damages to a third party arising from such organizer’s failure to fulfill its security obligations. If the act of a third-party results in damage to others in a large-scale group activity, the organizer that failed to fulfill security obligations shall also bear supplementary liability. Therefore, we might face negligence claims alleging that we fail to maintain our facilities or to supervise our employees. In addition, if any participants of our offline events commit acts of violence, we could also face allegations that we failed to provide adequate security or were otherwise responsible for his or her actions. Additionally, our offline events may be perceived to be unsafe, which may discourage prospective sponsors, participants and media companies from attending. Any of the foregoing could materially and adversely affect our business, results of operations and financial condition.
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Our consulting business is dependent on our ability to identify, execute and complete projects successfully and is subject to various risks.
The transactions that we generally advise on, including equity and debt financing, as well as mergers and acquisitions, may be subject to review and approvals by various regulatory authorities. The results and timing of necessary regulatory approvals are beyond our or involving parties’ control. Any failure to obtain the necessary regulatory approvals for these transactions in a timely manner may cause substantial delays to, or even the termination of, relevant transactions. In addition, the successful conclusion of transactions depends upon a number of other factors, such as market trends and investors’ decisions, many of which are beyond our control. We generally charge consulting fees or commissions based on a certain percentage of the deal size, and we are generally entitled to receive payment of such fees or commissions only after the successful completion of the relevant transaction. If a transaction is not completed as scheduled or at all for any reason, we may not be able to receive fees or commissions for services that we have provided in a timely manner or at all, which could materially and adversely affect our business, results of operations and financial condition. Furthermore, we may face increasing challenges in terms of deal execution, client development, pricing and legal risks in light of the constantly evolving regulatory framework and the market conditions. If we are unable to adapt our business strategies to such economic and legal challenges, we may not be able to compete effectively, which could in turn materially and adversely affect our business, results of operations and financial condition.
The due diligence that we undertake in the course of our business operations is inherently limited and may not reveal all facts that may be relevant.
In the course of providing consulting services, we endeavor to conduct due diligence review that we deem reasonable and appropriate based on relevant regulatory and market standards, as well as the facts and circumstances applicable to each deal. When conducting due diligence, we are often required to evaluate critical and complex business, financial, tax, accounting, environmental, regulatory and legal issues. Outside consultants, such as legal advisors and accountants, may be involved in the process in varying degrees depending on the type of deal. Nevertheless, when conducting due diligence and making an assessment, we are limited to the resources available, including information provided by the potential clients and, in some circumstances, third-party investigators. Our due diligence may not reveal or highlight all relevant facts and issues that may be necessary or helpful in evaluating potential risks, which may subject us to inaccurate assessment regarding financing opportunities and growth prospects of the potential clients. Moreover, such an investigation will not necessarily result in the successful completion of a deal, which may increase our costs and therefore materially and adversely affect our business, results of operations and financial condition.
If we are not able to continue to retain and attract clients to purchase our course offerings, our business and prospects will be materially and adversely affected.
Our ability to continue to attract clients to purchase our course offerings are critical to the continued success and growth of our corporate business training services. This in turn will depend on several factors, including our ability to engage high-level industry practitioners as our instructors, continue to develop, adapt or enhance quality of our course offerings to meet the evolving demands of our existing or prospective clients, and effectively market our course offerings and enhance our brand awareness to a broader base of prospective clients. We may not always be able to meet our clients’ expectations due to a variety of reasons, many of which are outside of our control. We may face client dissatisfaction due to our clients’ perceptions that we fail to help them achieve their learning goals, as well as our clients’ overall dissatisfaction with the quality of our course offerings and our instructors. We must also manage our growth while maintaining consistent and high course quality, and respond effectively to competitive pressures. If we are unable to continue to retain and attract clients to purchase our course offerings, our revenue for corporate business training services may decline, which may have a material adverse effect on our business, results of operations and financial condition.
We may not be able to maintain or increase our course fee level.
Our revenue generated from corporate business training services are affected by the pricing of our training courses. We determine our course fees primarily based on the demand for our courses, the cost of our operations, the course fees charged by our competitors, our pricing strategy to gain market share and general economic conditions in the PRC. Leveraging our long-standing industry expertise and comprehensive course offerings, we offer high-end equity investment training services and charge premium fees comparable to trainings services of the same category for our course. Although we charge premium course fees for our courses compared with the majority of the equity investment training service providers, we cannot guarantee that we will be able to maintain or increase our course fees in the future without adversely affecting the demand for our corporate business training services.
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We may not be able to timely develop our courses in a cost-effective manner to make them appealing to existing and prospective clients, or at all.
As our training courses cover topics regarding China’s rapidly evolving equity investment industry, we work closely with our instructors on developing, updating and improving our course materials to stay abreast of the latest development trends in each subsector of the industry. The adjustments, updates and expansions of our existing course content and the development of new course materials may not be accepted by existing or prospective clients. Even if we are able to develop acceptable new course materials, we may not be able to introduce them as quickly as clients require or as quickly as our competitors introduce competing offerings. Furthermore, offering new course materials or upgrading existing ones may require us to commit significant resources and make significant investments in course content development. If we are unsuccessful in pursuing course content development and upgrading opportunities due to the financial constraints, failure to attract qualified instructors, or other factors, our ability to attract and retain clients could be impaired and our business, results of operations and financial condition could be materially and adversely affected.
We may be subject to liability claims for any inappropriate or illegal content in our courses and any misconduct of our instructors or employees, which could cause us to incur legal costs and damage our reputation.
We implement strict monitoring procedures to remove inappropriate or illegal content in our courses. However, we cannot assure you that there will be no inappropriate or illegal materials included in our offline or online courses. Therefore, we may face civil, administrative or criminal liability if an individual or corporate, governmental or other entity believes that the content of our courses violates any laws, regulations or governmental policies or infringes upon its legal rights. In addition, in the event of accident or injuries or other harm to our clients or other people during our course offerings, including those caused by or otherwise arising from the actions or negligence of our employees or instructors, we could face negligence claims for inadequate security measures or lack of supervision of employees or instructors. Even if such claim is not successful, defending such claim may cause us to incur substantial costs. Moreover, any accusation of inappropriate or illegal content in our courses and any misconduct of our instructors or employees could lead to significant negative publicity, which could harm our reputation and future business prospects.
Unauthorized use of our intellectual property by third parties, and the expenses incurred in protecting our intellectual property rights, may adversely affect our business, reputation and competitive edge. Intellectual property is crucial to our competitiveness and success.
Unauthorized use of our intellectual property may adversely affect our business and reputation. We rely on a combination of contractual restrictions, confidentiality procedures, and intellectual property registrations to protect our intellectual property rights. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain or use our intellectual property, including seeking court declaration that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and the steps we have taken may not fully prevent misappropriation of our intellectual property. We may not be able to detect all such websites in a timely manner and, even if we could, technological measures may be insufficient to stop their operations, and could require us to expend significant financial or other resources. Furthermore, the practice of intellectual property rights enforcement action by Chinese regulatory authorities is at its early stage of development and is subject to significant uncertainty. We may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources, and thus may adversely affect our business. In addition, there is no assurance that we will be able to enforce our intellectual property rights effectively or otherwise prevent others from the unauthorized use of our intellectual property. Failure to adequately protect our intellectual property could materially and adversely affect our brand name and reputation, and our business, results of operations and financial condition.
Third parties may claim that we infringed their proprietary intellectual property rights, which could cause us to incur significant legal expenses and prevent us from promoting our services.
We could be involved in litigation related to allegations of infringement of intellectual property rights. While we screen content offered in our service offerings to avoid potential intellectual property right infringement, we may not be able to identify all instances of infringement, especially those arising from content we source from others. Third parties may claim that, as the service provider delivering such contents, we are also liable for any infringement upon the third parties’ rights jointly with the content providers. We typically rely on representations from third-party content providers that their contents do not infringe upon third parties’ intellectual property rights and on indemnification should any such representations become inaccurate and we suffer damages as a result, including any damages resulting from third-party claims. However, indemnification may not be adequate in recovering our loss if the contents we deliver indeed infringe upon valid patents, trademarks, copyrights or other intellectual property rights. Moreover, third parties may also claim that the software or technologies we currently use in our business operations infringe their intellectual property rights, which may subject us to potential liabilities. We have implemented operational protocols to use our best efforts to ensure compliance with intellectual property laws. However, there can be no assurance that third-party right holders will not assert intellectual property infringement or other related claims against us in the future. Defending against these claims is costly and can impose a significant burden on our management and resources. Such claims may harm our reputation. Any liability or expenses resulting from such claims, or necessary changes to our services to reduce the risk of future liability, may have a material adverse effect on our business, results of operations and financial condition.
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We face risk related to our collection and use of data, which could result in regulatory actions, litigations and negative publicity about privacy and data protection practices.
Our data capabilities are fundamental to our business operation. We face risks inherent in collecting and handling large volumes of data and in protecting the security of such data. We could be subject to attacks to our systems by outside parties or fraudulent or inappropriate behaviors by our employees or business partners. Third parties may also gain access to our data using computer malware, viruses, spamming, phishing attacks or other means. Data breaches or any misconduct during the process of collection, storage and use of data, could result in a violation of applicable data privacy and protection laws and regulations in China, and subject us to regulatory actions, investigations or litigations. We could incur significant costs in investigating and defending against them and we could be subject to negative publicity about our privacy and data protection practices that may affect our reputation in the marketplace. Our potential risk related to our collection and use of data could require us to implement measures to reduce our exposure to liability, which may require us to expend substantial resources and limit the attractiveness of our data and other services to clients.
Non-compliance with law on the part of any third parties with which we conduct business could disrupt our business and adversely affect our results of operations and financial condition.
Third parties with which we conduct business, such as third-party content providers and marketing service clients, may be subject to regulatory penalties or punishments because of their regulatory compliance failures or may be infringing upon other parties’ legal rights, which may, directly or indirectly, disrupt our business. Although we conduct review of legal formalities and certifications before entering into contractual relationships with third parties, and use our best efforts to take measures to reduce the risks that we may be exposed to in case of any non-compliance by third parties, we cannot be certain whether such third party has violated any regulatory requirements or infringed or will infringe any other parties’ legal rights. For example, content providers may submit copyrighted content that they have no right to distribute, and we may not be able to identify all instances of copyright infringement. In the event we release content that violates copyrights of a third party on our online platforms, we may be required to pay damages to compensate such third party. Even though we have the contractual right to seek indemnification from the relevant content provider for such payment, there can be no assurance that we will be able to enforce such right. As a result, our business, results of operations and financial condition could be materially and adversely affected. Similarly, advertisement content provided by our clients may also not be in full compliance with applicable laws and regulations.
We cannot rule out the possibility of incurring liabilities or suffering losses due to any non-compliance by third parties. We cannot assure you that we will be able to identify irregularities or non-compliance in the business practices of third parties we conduct business with, or that such irregularities or non-compliance will be corrected in a prompt and proper manner. Any legal liabilities and regulatory actions affecting third parties involved in our business may affect our business activities and reputations, and may in turn affect our business, results of operations and financial condition.
We may be involved in legal proceedings or arbitration claims, and the court rulings or arbitration award may not be favorable to us.
We were not and currently are not involved in any litigation or arbitration proceedings pending or, to our knowledge, threatened against us or any of our directors that could have a material and adverse effect on our reputation, business, financial condition or results of operations. Therefore, no provision was made for legal proceedings or arbitration claims. However, we cannot assure you that there will not be such proceedings or claims in the future or any proceedings or claims during the ordinary course of our business (including but not limited to those in relation to contract disputes between us and our clients). We may also bring legal proceedings against others. We may incur enormous legal costs and, if the outcomes of these legal proceedings or arbitration claims are unfavorable to us, we may be confronted with significant legal liabilities, waste enormous legal costs incurred, and/or suffer financial or reputational damages, which may materially and adversely affect our business, financial condition, and results of operations.
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A severe or prolonged downturn in Chinese or global economy could materially and adversely affect our business, results of operations, financial condition and prospects.
The global macroeconomic environment is facing challenges, including the US-China trade war, the end of quantitative easing and start of interest rate hike by the U.S. Federal Reserve, the economic slowdown in the Eurozone since 2014, uncertainties over the impact of Brexit and the Russian Federation’s invasion of Ukraine. The Chinese economy has shown slower growth since 2012 compared to the previous decade and the trend may continue. There is considerable uncertainty over 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. There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in market volatility. There have also been concerns on the relationship between China and other countries, including the surrounding Asian countries, which may potentially have economic effects. Recent international trade disputes, including tariff actions announced by the United States, China and certain other countries, and the uncertainties created by such disputes may cause disruptions in the international flow of goods and services and may adversely affect the Chinese economy as well as global markets and economic conditions. 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. Any severe or prolonged slowdown in Chinese or the global economy may materially and adversely affect our business, results of operations, financial condition and prospects.
We may need additional capital, and we may be unable to obtain such capital in a timely manner or on acceptable terms, or at all.
We may require additional capital from time to time to grow our business, including to better serve our clients, develop new service offerings, enhance our data collection and analytics capabilities and online platforms, improve our operating and technology infrastructure or conduct acquisition of complementary businesses and technologies. Accordingly, we may need to sell additional equity or debt securities. Future issuances of equity or equity-linked securities could significantly dilute our existing Shareholders, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A Ordinary Shares. The incurrence of debt financing would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations or our ability to pay dividends to our shareholders.
Our ability to obtain additional capital is subject to a variety of uncertainties, including:
| ● | our market position and competitiveness in the equity investment service industry; |
| ● | our future profitability, overall financial condition, results of operations and cash flows; |
| ● | general market conditions for fundraising activities by equity investment service providers in China; and |
| ● | economic, political and other conditions in China and internationally. |
We may be unable to obtain additional capital in a timely manner or on acceptable terms or at all. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to support our business growth could be significantly impaired, and our business and prospects could be materially and adversely affected.
Our insurance coverage may not be adequate, which could expose us to significant costs and business disruption.
We have maintained insurance policies covering damages to certain of our properties. However, insurance companies in China generally do not offer as extensive an array of insurance products as insurance companies do in countries with more developed economies. Consequently, we do not maintain sufficient business interruption insurance, business liability insurance or key man life insurance, which are not mandatory under PRC laws. Any business disruption, litigation or natural disasters, or any significant damages to our equipment or facilities may cause to incur substantial costs and divert our resources, and we may have no insurance to cover such losses. As a result, our business, results of operations and financial condition could be materially and adversely affected.
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A Ordinary Shares less attractive to investors.
We are an “emerging growth company” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our Class A Ordinary Shares less attractive because we may rely on these exemptions. If some investors find our Class A Ordinary Shares less attractive as a result, there may be a less active trading market for our Class A Ordinary Shares and our stock price may be more volatile.
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In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An “emerging growth company” can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to follow the extended transition period, and as a result, we will delay adoption of certain new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
We may undertake mergers, acquisition or investments to diversify or expand our business, which may pose risks to our business and dilute the ownership of our existing shareholders, and we may not realize the anticipated benefits of these mergers, acquisition or investments.
As part of our growth and service diversification strategy, we may evaluate opportunities to acquire or invest in other business in the industry. Mergers, investment or acquisitions that we may enter in the future entail a number of risks that could materially and adversely affect our business, operating and financial results, including, among others:
| ● | problems integrating the acquired operations, technologies or products into our existing business; |
| ● | diversion of management’s time and attention from our core business; |
| ● | adverse effect on our existing business relationships with clients; |
| ● | need for financial resources above our planned investment levels; |
| ● | failures in realizing anticipated synergies; |
| ● | difficulties in retaining business relationships with suppliers and clients of the acquired company; |
| ● | risks associated with entering markets in which we lack experience; |
| ● | potential loss of key employees of the acquired company; and |
| ● | potential write-offs of acquired assets. |
Our failure to address these risks successfully may have a material adverse effect on our financial condition and results of operations. Any such acquisition or investment will likely require a significant amount of capital investment, which would decrease the amount of cash available for working capital or capital expenditures. In addition, if we use our equity securities to pay for acquisitions; the value of your Class A Ordinary Shares may be diluted. If we borrow funds to finance acquisitions, such debt instruments may contain restrictive covenants that can, among other things, restrict us from distributing dividends.
We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.
Significant disruptions to our information technology systems or breaches of information security could adversely affect our business. In the ordinary course of business, we will collect, store and transmit large amounts of confidential information, and it is critical that we do so in a secure manner to maintain the confidentiality and integrity of such information. We have also outsourced significant elements of our information technology infrastructure; as a result, we manage independent vendor relationships with third parties who are responsible for maintaining significant elements of our information technology systems and infrastructure and who may or could have access to our confidential information. The size and complexity of our information technology systems, and those of our third-party vendors, make such systems potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees, partners or vendors. These systems are also vulnerable to attacks by malicious third parties and may be susceptible to intentional or accidental physical damage to the infrastructure maintained by us or by third parties. Maintaining the secrecy of confidential, proprietary and/or trade secret information is important to our competitive business position. While we have taken steps to protect such information and have invested in systems and infrastructures to do so, there can be no guarantee that our efforts will prevent service interruptions or security breaches in our systems or the unauthorized or inadvertent wrongful use or disclosure of confidential information that could adversely affect our business operations or result in the loss, dissemination or misuse of critical or sensitive information. The increasing sophistication and frequency of cybersecurity threats, including targeted data breaches, ransomware attacks designed to encrypt our data for ransom and other malicious cyber activities, pose a significant risk to the integrity and confidentiality of our data systems. A breach our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse of trade secrets, proprietary information or other confidential information, whether as a result of theft, hacking, fraud, trickery or other forms of deception, or for any other cause, could enable others to produce competing products, use our proprietary technology or information, and/or adversely affect our business position. Further, any such interruption, security breach, loss or disclosure of confidential information could result in financial, legal, business and reputational harm to us and could have a material adverse effect on our business, financial position, results of operations and/or cash flow.
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We utilize, and our subsidiaries may utilize, equity incentive plans to attract, retain, and motivate management and employees, which can have a dilutive effect on your investment in us and our interests in our subsidiaries.
We have adopted an equity incentive plan (the “2025 Equity Incentive Plan”) that can be used to attract and retain eligible directors, officers and employees of our Company. We may adopt a similar plan in the future. If we issue additional stock-based awards to eligible participants under an equity incentive plan, the issuance of these stock-based awards may dilute an investment in our Ordinary Shares. The price of Class A Ordinary Shares also may face incremental downward pressure if plan participants sell more shares into the market.
RISK FACTORS RELATED TO OUR IT SOLUTIONS BUSINESS
We have an evolving business model with still untested growth initiatives.
Top KingWin Hi Tech Inc., our U.S. subsidiary, has entered into a sales contract with a certain purchaser, Walker Times International (Hong Kong) Co., Ltd. for sale of an aggregate of 10,000 units of its TK-D2C AI Robots to the Purchaser at a price of $480 per unit for total proceeds of US$4.8 million. We fulfilled 10% of the contracted orders in 2025, and the remaining deliveries are scheduled to be completed by September 2026.
We plan to conduct independent research and development and manufacturing of artificial intelligence robots, which will be conducted by Top KingWin Technology Inc., our U.S. subsidiary.
We have an evolving business model and intend to implement new strategies to grow our business in the future. There can be no assurance that we will be successful in developing new product categories or in entering new specialty markets or in implementing any other growth strategies. Similarly, there can be no assurance that we already have or will be able to obtain or retain any employees, consultants or other resources with any specialized skills or relationships to successfully implement our strategies for our business in the future.
Our business is dependent on our ability to attract and retain highly skilled professionals.
Our success depends on our ability to attract, develop, motivate, retain and effectively utilize highly skilled professionals in Guangdong, China. We believe that there is significant competition for talented personnel with such skills in this geographic region and that such competition is likely to continue for the foreseeable future. We compete for such talented personnel not only with other companies in our industry but also with companies in adjacent industries, such as financial services and technology generally.
Increased hiring and increasing worldwide competition for skilled personnel may lead to a shortage in the availability of suitable personnel in the locations where we operate and hire and, accordingly, we may not be able to retain or hire all of the personnel necessary to meet our ongoing and future business needs. In addition, any reductions in headcount for economic or business reasons, however temporary, could negatively affect our reputation as an employer and our ability to hire engineering personnel to meet our business requirements.
If we fail to attract and retain highly skilled engineering personnel, we may not have the necessary resources to properly staff projects, and the failure to successfully compete for such personnel could materially and adversely affect our ability to provide high quality services to our clients. These factors may, as a result, have a material adverse effect on our business, financial condition and results of operations.
Our business is dependent on our collaboration with our vendors and suppliers and changes or difficulties in our relationships with our vendors and suppliers may harm our business and financial results.
Our business is dependent on our collaboration with our vendors. Our vendors or suppliers may fail to meet timelines or contractual obligations, which may adversely affect our business. There is no guarantee that we may maintain stable and long-term business relationships with any vendors or suppliers. If our vendors or suppliers refuse to have business with us and if we are not able to replace these business partners on commercially reasonable terms in a timely manner or at all, our business and results of operations and financial condition would be materially and adversely affected.
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At this stage, our products portfolio remains limited, and our gross margin and results of operations may be adversely affected in the future by a number of factors, including decreases in our average selling prices of products, shifts in our product mix, or price increases of certain components or third-party services due to inflation, supply chain constraints, or for other reasons.
Currently, we are offering hardware products, such as integrated circuit and motherboard, for sale at narrow margins. Our gross margin could be impacted for example by the following factors: increased costs (including increased costs caused by inflation, higher interest rates, or supply chain constraints); loss of cost savings if parts ordering does not correctly anticipate product demand or if the financial health of either our partners or our suppliers deteriorates; excess inventory, or inventory holding and obsolescence charges. In addition, we are subject to risks from fluctuating market prices of certain components, which may be incorporated into our products or used by our suppliers to manufacture our products. Supplies of these components may from time to time become restricted, or general market factors and conditions such as inflation or supply chain constraints have in the past affected and may in the future affect pricing of such commodities. Any increase in the price of components used in our products will adversely affect our gross margins.
We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
We are looking for attractive strategic acquisition opportunities with companies that have an expertise in AI-powered solutions. We will consider companies outside of our management’s area of expertise if an acquisition opportunity is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our Company. Although our management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure that we will adequately ascertain or assess all of the significant risk factors. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any shareholders who choose to remain shareholders following the proposed acquisition could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value.
We may seek an acquisition with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To the extent we complete an acquisition with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we acquire. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
Our ability to continue to develop and expand our service offerings to address emerging business demands and technological trends, including our ability to sell differentiated services, may impact our future growth. If we are not successful in meeting these business challenges, our business, financial condition and results of operations may be materially and adversely affected.
Our ability to implement solutions for our customers, incorporating new developments and improvements in technology that translate into productivity improvements for our customers, and our ability to develop digital and other new service offerings that meet current and prospective customers’ needs, as well as evolving industry standards, are critical to our success. Our competitors may develop solutions or services that make our offerings obsolete or may force us to decrease prices on our services, which can result in lower margins. Our ability to develop and implement up-to-date solutions utilizing new technologies that meet evolving customer needs in consulting, industry software and solutions, and application services markets, and in areas such as artificial intelligence, in a timely or cost-effective manner, will impact our ability to retain and attract customers and our future revenue growth and earnings.
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However, there can be no assurance that our services can meet prospective customers’ needs and evolving industry standards. If we are unable to continue to execute our strategy and develop and expand our service offerings in a highly competitive and rapidly evolving environment, or if we are unable to commercialize such services and solutions and expand and scale them with sufficient speed and versatility, our growth, productivity objectives and profit margins could be adversely affected.
Technological developments may materially affect the cost and use of technology by our customers. Customers may delay spending under existing contracts and engagements and entering into new contracts while they evaluate new technologies. Such delays can negatively impact our results of operations if the pace and level of spending on new technologies by some of our customers is not sufficient to make up any shortfall from delays from other customers. Our growth strategy focuses on responding to these types of developments by driving innovation that will enable us to expand our services offering. If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our business, financial condition and results of operations, as well as our services and solutions and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be adversely affected.
If we do not succeed in attracting new clients for our technology services, we may not achieve our revenue growth goals.
Obtaining new clients is important for us to achieve rapid revenue growth. Our ability to attract new clients depends on a number of factors, including our ability to offer high quality technology services at competitive prices, the strength of our competitors and the capabilities of our marketing and sales teams to attract new clients and to sell additional services to existing clients. If we fail to attract new clients or to grow our revenues from existing clients in the future, we may not be able to grow our revenues as quickly as we anticipate or at all.
Our investment costs incurred in developing our software products and platforms may not yield the intended results and can adversely impact our results of operations.
Our investments in technology may not yield the intended results, especially from our research and development. Research and development investments and the consequent adoption of new technology solutions, patents, intellectual property and software products on an ongoing basis are essential elements of our business strategy. This helps us to move up the value chain and be a more relevant technology partner to our customers. While we strive to ensure that our research and development expenditure will yield a sustained customer base and increased revenue, customer buy-in for any new investments in research and development carries with it a possibility of not yielding expected investment results, thereby hampering our growth prospects.
Software failures, breakdowns in the operations of our servers and communications systems or the failure to implement system enhancements could harm our business.
Our success depends on the efficient and uninterrupted operation of our servers and communications systems to be built. A failure of our network or data gathering procedures could impede services. Despite any precautions we may take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins, and similar events at our facilities could result in interruptions of our operations. In addition, any failure by our computer environment to provide our required data communications capacity could result in interruptions in our service.
Additionally, significant delays in the planned delivery of system enhancements, improvements and inadequate performance of the systems once they are completed could damage our reputation and harm our business. Long-term disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities and acts of terrorism, particularly involving cities in which we have offices, could adversely affect our business, financial condition and results of operations. To the extent that we suffer loss or damage that is not covered by insurance or that exceeds our insurance coverage, or are required to pay higher insurance premiums, our business, financial condition and results of operations could be materially and adversely affected.
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We plan to use open-source software in providing services to our clients. There are risks associated with the use of open-source software that may have an adverse effect on our results of operations and financial condition.
We plan to use open-source software in providing services to our clients. Some of our clients may also be using open-source software on which some of our products and services may need to operate. There are significant benefits and risks associated with open-source software. If a company were to buy a commercial closed source solution for enterprise use, there is an elaborate procedure followed for finalizing and purchasing a product. This includes requirement analysis, defining acceptance criteria, evaluating the product, security considerations, etc. An open-source product, however, might not undergo this kind of evaluation. This could pose business and security risks and lead to some unanticipated costs and may have an adverse effect on our results of operations and financial condition.
Some open-source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open-source software we use or grant other licenses to our intellectual property. If we combine our software with open-source software in a certain manner, we could, under certain open-source licenses, be required to release or license the source code of our software to the public. From time to time, we may be subject to claims asserting ownership of, or demanding release of, the source code, the open-source software and/or derivative works that were developed using such software, requiring us to provide attributions of any open-source software incorporated into our distributed software, or otherwise seeking to enforce the terms of the applicable open-source license. These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to re-engineer our software or change our products or services, any of which may have an adverse effect on our results of operations and financial condition.
The AI industry faces its own risks and changing and extensive regulations.
As with most emerging technologies, AI comes with its own set of risks and challenges that could affect its adoption and our business. AI algorithms may be flawed, and the data used could be incomplete or biased. Inappropriate or controversial data practices, by us or by others, could limit the acceptance of our AI-enhanced products and content. Certain AI applications could trigger ethical issues. Should our AI-powered product become controversial due to their effects on human rights, privacy, employment, or other social matters, we risk reputational harm or legal repercussions. In addition, uncertainties regarding the development and application of AI technology present a potential risk. There remains the possibility that AI technology may not progress as anticipated or deliver expected benefits, which could limit the acceptance and popularity of our AI-powered product.
The development and adoption of generative AI technologies are still in their early stages, and their commercial viability is uncertain. There is a risk that the demand for connectivity solutions for such technologies may not meet our expectations or that market acceptance may be slower than anticipated. Failure to achieve widespread acceptance and generate significant revenues from generative AI technologies could negatively impact our financial condition and results of operations.
Furthermore, there are uncertainties around the ownership and intellectual property protection of AI generated content (“AIGC”) products. Using AIGC tools could also lead to potential copyright infringement and other legal challenges. If we are unable to secure the needed permissions or licenses for using AI tools—whether because we cannot identify the rights holder or for any other reason—we might infringe on others’ rights which could lead to monetary claims, fines, penalties, or less content for our users.
The regulatory landscape surrounding generative AI technologies is evolving, and there is currently significant uncertainty as to whether governmental authorities, self-regulatory institutions or other regulatory authorities will take additional action to curtail the development or use of generative AI technologies. Moreover, laws, regulations or industry standards that develop in response to generative AI technologies may be burdensome or may prohibit the deployment of generative AI technologies for one or more uses, any of which could result in lower than anticipated demand for our product.
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The AI technologies we are incorporating into certain of our products and processes may present business, legal, and reputational risks.
We plan to use AI technologies in certain of our products and processes. The use of AI has recently become the source of significant media attention and political debate. The introduction of AI technologies, into new or existing offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation, and financial results. For example, AI technologies can lead to unintended consequences, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and business and expose us to liability. We may also not identify inaccurate information, which may expose us to liability. Laws, regulations or industry standards that develop in response to the use of AI may be burdensome or may significantly restrict the deployment of AI, particularly generative AI technologies, in our products or processes.
We may use AI technologies from third parties, which may include open-source software. If we are unable to maintain rights to use these AI technologies on commercially reasonable terms, we may be forced to acquire or develop alternate AI technologies, which may limit or delay our ability to provide competitive offerings and may increase our costs. These AI technologies also may incorporate data from third-party sources, which may expose us to risks associated with data rights and protection and may also lead to the unintended consequences of using AI discussed above. The intellectual property ownership and license rights surrounding AI technologies as well as data protection laws related to the use and development of AI are currently not fully addressed by courts or regulators. The use or adoption of AI technologies into our products may result in exposure to claims by third parties of copyright infringement or other intellectual property misappropriation, which may require us to pay compensation or license fees to third parties. The evolving legal, regulatory and compliance framework for AI technologies may also impact our ability to protect our own data and intellectual property against infringement.
Our inability to protect our systems and data from continually evolving cybersecurity risks or other technological risks could affect our reputation among our clients and their customers and may expose us to liability.
In conducting our business, we may process, and transmit sensitive business information and personal information about our clients, their customers and other parties. We may be a target of malicious third-party attempts to identify and exploit system vulnerabilities and penetrate or bypass our security measures in order to gain unauthorized access to our networks and systems or those of our associated third parties. A successful attempt could lead to the compromise of sensitive, business, personal or confidential information. As a result, we need to proactively employ multiple barriers and controls at different layers of our systems to defend our systems against intrusion and attack and to protect the data we collect. However, we cannot be certain that these measures will continue to successfully counter all current and emerging technology threats that are designed to breach our systems in order to gain access to confidential information.
We also rely on third party vendors for aspects of our cybersecurity strategy, such as to conduct security reviews and penetration tests, and there can be no assurance that the tests conducted by these vendors, or measures we take in response to such tests, will be effective at identifying or preventing any cybersecurity threat.
Our computer systems and the computer systems of our clients could be in the future subject to breach, and our data protection measures may not prevent unauthorized access. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and are often difficult to detect. Threats to our systems and our associated third parties’ systems can derive from human error, fraud or malice on the part of employees or third parties or may result from accidental technological failure. Computer viruses and other malware can be distributed and could infiltrate our systems or those of our associated third parties. In addition, denial of service or other attacks could be launched against us for a variety of purposes, including to interfere with our services or create a diversion for other malicious activities. Our defensive measures may not prevent downtime, unauthorized access or use of sensitive data. Further, while we carefully select third parties with which we associate, we do not control their actions. Any problems experienced by these third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could adversely affect our ability to service our clients or their customers or otherwise conduct our business.
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Furthermore, the costs of systems and procedures associated with any protective measures that we are required to take by our clients may increase and could adversely affect our ability to compete effectively. Any failure to adequately enforce or provide these protective measures could result in liability, protracted and costly litigation, governmental and card network intervention and fines and, with respect to misuse of our clients’ information, lost revenue and reputational harm.
We may be subject to privacy, data protection and information security laws in the jurisdictions in which we operate.
Any potential security breaches and cyber-attacks can lead to shutdowns or system interruptions, and potential unauthorized disclosure of sensitive or confidential information which may result in potentially costly litigation. If any person, including any of our employees, penetrates our network security or otherwise mismanages or misappropriates sensitive or confidential client or customer data, we could be subject to significant fines for violating privacy or data protection and consumer laws or lawsuits, legal liability, loss of clients and damage to our reputation. We may also be liable for damages in the case of such a security or network breach that results in an unauthorized or impermissible disclosure of client or customer data and information.
We also believe that we will be subject to additional such laws and regulations in the future that may be stricter than those currently in force. Although we will take extensive efforts to comply with such applicable laws and regulations, failure or perceived failure by us to comply with rapidly evolving privacy and security laws, policies (including our own policies, which we may update from time to time), legal obligations or industry standards may result in governmental enforcement actions, litigation, fines and penalties or adverse publicity, could require us or our clients to change our or their business practices and could cause our clients to lose trust in us.
RISKS RELATED TO OUR CORPORATE STRUCTURE
The dual-class structure of our ordinary shares has the effect of concentrating voting control with our Chairman and Chief Executive Officer, directors and their affiliates.
Each of our Class B Ordinary Shares has 40 votes per share, and each of our Class A Ordinary Shares has 1 vote per share. Mr. Ruilin Xu, our chairman of the board of directors and our chief executive officer, beneficially owns 768 Class A Ordinary Shares and 58,861 Class B Ordinary Shares, representing 50.62% of our total voting power. Mr. Xu as the controlling shareholder has substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions, such as (i) making amendments to our certificate of incorporation and by-laws, (ii) whether to issue additional Class A Ordinary Shares, including to himself, (iii) employment decisions, including compensation arrangements, and (iv) whether to enter into material transactions with related parties. The interests of Mr. Xu as the controlling shareholder may differ from the interests of our other shareholders. He may take actions that are not in the best interests of us or our other shareholders. These corporate actions may be taken even if they are opposed by our other shareholders. Further, concentration of ownership of our Class B Ordinary Shares may discourage, prevent or delay the consummation of change of control transactions that shareholders may consider favorable, including transactions in which shareholders might otherwise receive a premium for their shares. Future issuances of Class B Ordinary Shares may also be dilutive to the holders of Class A Ordinary Shares. As a result, the market price of our Class A Ordinary Shares could be adversely affected. The concentration in the ownership of our ordinary shares will limit the ability of holders of our Class A Ordinary Shares to influence corporate matters for the foreseeable future and may cause a material decline in the value of our Class A Ordinary Shares.
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You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our amended and restated memorandum of association and articles of association, the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. It may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC may render you unable to enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the Cayman Islands and the PRC. In particular, the Cayman Islands has a different body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.
You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.
Cayman Islands law provides shareholders with only limited rights to convene a general meeting and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our articles of association allow our shareholders holding shares representing in aggregate not less than 10 percent of our voting share capital in issue, to convene a general meeting of our shareholders, in which case our directors are obliged to call such meeting. Advance notice of at least 7 days is required for the convening of our general meetings. A quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing a majority of the paid-up voting share capital in the Company.
Recently introduced economic substance legislation of the Cayman Islands may impact the Company or its operations.
The Cayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic activity. Effective January 1, 2019, the International Tax Co-operation (Economic Substance) Act, 2018 (the “Substance Law”) and issued Regulations and Guidance Notes came into force in the Cayman Islands introducing certain economic substance requirements for “relevant entities” which are engaged in certain “relevant activities,” which in the case of exempted companies incorporated before January 1, 2019, will apply in respect of fiscal years commencing July 1, 2019, onwards. A “relevant entity” includes an exempted company incorporated in the Cayman Islands; however, it does not include an entity that is tax resident outside the Cayman Islands. Accordingly, for so long as the Company is a tax resident outside the Cayman Islands, it is not required to satisfy the economic substance test under the Substance Law. Although it is presently anticipated that the Substance Law will have little material impact on the Company or its operations, as the legislation is new and remains subject to further clarification and interpretation it is not currently possible to ascertain the precise impact of these legislative changes on the Company.
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The Financial Action Task Force’s Increased Monitoring of the Cayman Islands.
In February 2021, the Cayman Islands was added to the Financial Action Task Force (“FATF”) list of jurisdictions whose anti-money laundering practices are under increased monitoring, commonly referred to as the “FATF grey list.” When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring during that timeframe. In its October 2021 plenary, the FATF recognized the progress made by the Cayman Islands to improve its anti-money laundering and counter-terrorist financing regime. Despite this recognition, it is unclear how long this designation will remain in place and what ramifications, if any, the designation will have for the Company.
Cayman Islands was added to the EU AML High-Risk Third Countries List.
On March 13, 2022, the European Commission (“EC”) updated its list of ‘high-risk third countries’ (“EU AML List”) identified as having strategic deficiencies in their anti-money laundering/counter-terrorist financing regimes to add nine countries, including the Cayman Islands. The EC has noted it is committed to there being a greater alignment between the EU AML List and the FATF listing process. The addition of the Cayman Islands to the EU AML List is a direct result of the inclusion of the Cayman Islands on the FATF grey list in February 2021. It is unclear how long this designation will remain in place and what ramifications, if any, the designation will have for the Company.
RISKS RELATED TO DOING BUSINESS IN CHINA
Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business, results of operations and financial condition.
A majority of our revenues were derived in China, and a majority of our operations are conducted in China through our PRC subsidiaries. Additionally, in 2025, our subsidiary in Colorado, USA, sold a batch of robots to a Hong Kong customer, generating some revenue, which accounted for only 6% of the Company’s total revenue. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole. The Chinese economy differs from the economies of most developed countries in many respects, including the degree 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 Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over China’s economic growth through strategically allocating resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.
While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing since 2021. A downturn in the economy could affect the discretionary spending power of customers and, in turn, depress the number of orders for our PRC subsidiaries’ products and services. Any adverse changes in the policies of the Chinese government or in the laws and regulations in China could also have a material adverse effect on the overall economic growth of China, and adversely affect our PRC subsidiaries’ operation. As a result, changes in economic conditions and government policies could adversely affect our business and results of operations, lead to reduction in demand for our services and adversely affect our competitive position.
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A majority of our revenues are generated in the PRC, but an increase of our international presence could expose us to fluctuations in foreign currency exchange rates, or a change in monetary policy may harm our financial results.
Our functional currency and reporting currency are the Renminbi. Additionally, in 2025, our subsidiary in Colorado, USA, sold a batch of robots to a Hong Kong customer, generating some US dollar revenue, which accounted for only 6% of the Company’s total revenue. Currently, a majority of our revenue comes from our operations through our PRC subsidiaries within the PRC. However, if we expand our international presence in the future, we could face exposure to foreign currency exchange rate fluctuations. Nonetheless, any future expansion into international markets may expose us to the impact of exchange rate variations. These fluctuations can be influenced by various factors, including governmental policies and domestic and international economic and political developments. If our non-Chinese revenues increase substantially in the future, any significant change in the value of the currencies of the countries in which we do business against the Renminbi could adversely affect our financial condition and results of operations due to translational and transactional differences in exchange rates.
We cannot predict the effects of exchange rate fluctuations upon our future operating results because of the number of currencies involved, the amount of our revenues that will be generated in other countries, the variability of currency exposures, and the potential volatility of currency exchange rates. We do not take actions to manage our foreign currency exposure, such as entering into hedging transactions.
Uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit the legal protection available to you and us.
The PRC legal system is a civil law system based on written statutes. Prior court decisions are encouraged to be used for reference but it remains unclear to what extent the prior court decisions may impact the current court ruling as the encouragement policy is new and there is limited judicial practice in this regard. In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The legislation over the past three decades has significantly increased the protection afforded to various forms of foreign or private-sector investment in China. Our PRC subsidiaries are subject to various PRC laws and regulations generally applicable to companies in China. Although the PRC legal system is evolving rapidly, its current slate of laws may not be sufficient to cover all aspects of the economic activities in China, including such activities that relate to or have an impact on our business. Implementation and interpretations of laws, regulations and rules are not always undertaken in a uniform matter and enforcement of these laws, regulations and rules involves uncertainties.
From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. Since the PRC legal system is based on written statutes and legal interpretations by the Standing Committee of the National People’s Congress, and the 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 in the PRC legal system than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies, internal rules, and regulations that may have retroactive effect and may change quickly with little advance notice. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property), and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations.
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If we become directly subject to the scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price, and reputation.
U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism, and negative publicity by investors, financial commentators, and regulatory agencies, such as the SEC. Much of the scrutiny, criticism, and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism, and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism, and negative publicity will have on us, our business, and the price of our Class A ordinary shares. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company. This situation will be costly and time consuming and distract our management from developing our business. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our Class A ordinary shares.
Our PRC subsidiaries are not operating in an industry that prohibits or limits foreign investment. According to the opinion of our PRC counsel, other than those requisite for a domestic company in China to engage in the businesses similar to ours and the filing procedures with the CSRC as disclosed in this prospectus, our PRC subsidiaries is not required to obtain any other permission from Chinese authorities including the CSRC, CAC or any other governmental agency that is required to approve our operating entity’s operations. However, the PRC government may take actions to exert more oversight and control over offerings by China-based issuers conducted overseas and/or foreign investment in such companies, if our PRC subsidiaries dos not receive or maintain the approvals, or we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change such that our PRC subsidiaries are required to obtain approval in the future, our PRC subsidiaries may be subject to investigations by competent regulators, fines or penalties, ordered to suspend its 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 PRC subsidiaries’ operations, 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.
Substantial uncertainties exist with respect to the interpretation and implementation of newly enacted PRC Foreign Investment Law and its Implementation Rules and how they may impact the viability of our corporate structure, corporate governance, and operations.
On March 15, 2019, the PRC National People’s Congress approved the PRC Foreign Investment Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Contractual Joint Venture Enterprise Law, and the Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. On December 26, 2019, the State Council of the People’s Republic of China, or the State Council, approved the Implementation Rules of Foreign Investment Law, which came into effect on January 1, 2020. The PRC Foreign Investment Law and its Implementation Rules embody 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 investments. However, since the PRC Foreign Investment Law is relatively new, substantial uncertainties exist with respect to its interpretation and implementation.
The PRC Foreign Investment Law specifies that foreign investments shall be conducted in line with the “negative list” issued by the State Council. Foreign investors would not be allowed to make investments in prohibited industries in the “negative list,” while the foreign investors must satisfy certain conditions stipulated in the “negative list” for investment in restricted industries. It is uncertain whether the business consulting market and the sales and development of computer hardware and software industry, in which our PRC subsidiaries operates, will be subject to the foreign investment restrictions or prohibitions set forth in the “negative list” to be issued in the future. If any business operation of our PRC subsidiaries were to fall in the “negative list,” our PRC subsidiaries would face uncertainties as to whether such clearance can be timely obtained, or at all. There are uncertainties as to how the PRC Foreign Investment Law would be further interpreted and implemented. We cannot assure you that the interpretation and implementation of the PRC Foreign Investment Law made by the relevant governmental authorities in the future will not materially impact the viability of our corporate structure, corporate governance and business operations in any aspect.
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If the U.S. Public Company Accounting Oversight Board, or the PCAOB, is unable to inspect our auditors as required under the Holding Foreign Companies Accountable Act, the SEC will prohibit the trading of our Class A ordinary shares. A trading prohibition for our Class A ordinary shares, or the threat of a trading prohibition, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections of our auditors would deprive our investors of the benefits of such inspections.
On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, 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 a minimum offering size requirement for companies primarily operating in a “Restrictive Market,” (ii) adopt a new requirement relating to the qualification of management or the board of directors 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 auditor. On October 4, 2021, the SEC approved Nasdaq’s revised proposal for the rule changes.
On May 20, 2020, the U.S. Senate passed the HFCA Act 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. Pursuant to the HFCA Act, if the PCAOB is unable to inspect an issuer’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a U.S. stock exchange. The PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. Furthermore, the Determination Report identified the specific registered public accounting firms as PCAOB Identified Firms which are subject to these determinations.
On March 24, 2021, the SEC announced the adoption of interim final amendments to implement the submission and disclosure requirements of the HFCA Act. In the announcement, the SEC clarifies that before any issuer will have to comply with the interim final amendments, the SEC must implement a process for identifying covered issuers. The announcement also states that the SEC staff is actively assessing how best to implement the other requirements of the HFCA Act, including the identification process and the trading prohibition requirements.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the board of directors of a company is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions. The lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause investors and potential investors in our Class A ordinary shares to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
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On August 26, 2022, the PCAOB announced that it had signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the Protocol, the PCAOB conducted inspections on select registered public accounting firms subject to the Determination Report in Hong Kong between September and November 2022.
On December 15, 2022, the PCAOB board announced that it has completed the inspections, determined that it had complete access to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, and voted to vacate the Determination Report.
Notwithstanding the foregoing, the Company’s ability to retain an auditor subject to the PCAOB inspection and investigation, including but not limited to inspection of the audit working papers related to us, may depend on the relevant positions of U.S. and Chinese regulators. Our current auditor working papers related to us are located in the U.S. With respect to audits of companies with operations in China, such as the Company, there are uncertainties about the ability of its auditor to fully cooperate with a request by the PCAOB for audit working papers in China without the approval of Chinese authorities. If the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, or the PCAOB re-evaluates its determination as a result of any obstruction with the implementation of the Statement of Protocol, then such lack of inspection or re-evaluation could cause trading in the Company’s securities to be prohibited under the HFCA Act, and ultimately result in a determination by a securities exchange to delist the Company’s securities. Accordingly, the HFCA Act calls for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.
On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act. On December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. As a result, the risks mentioned above have been heightened.
If our Class A ordinary shares are subject to a trading prohibition under the HFCA Act or the Accelerating Holding Foreign Companies Accountable Act, the price of our Class A ordinary shares may be adversely affected, and the threat of such a trading prohibition would also adversely affect their price. If we are unable to be listed on another securities exchange that provides sufficient liquidity, such a trading prohibition may substantially impair your ability to sell or purchase our Class A ordinary shares when you wish to do so.
The HFCA Act also imposes additional certification and disclosure requirements for companies that are identified by the SEC as having a substantial connection to a foreign jurisdiction that has limitations on U.S. regulatory oversight (the “Commission Identified Issuers”), and these requirements apply to issuers in the year following their listing as Commission Identified Issuers. The additional requirements include a certification that the issuer is not owned or controlled by a governmental entity in the Relevant Jurisdiction, and the additional requirements for annual reports include disclosure that the issuer’s financials were audited by a firm not subject to PCAOB inspection, disclosure on governmental entities in the Relevant Jurisdiction’s ownership in and controlling financial interest in the issuer, the names of Chinese Communist Party, or CCP, members on the board of the issuer or its operating entities, and whether the issuer’s articles include a charter of the CCP, including the text of such charter.
Uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit the legal protection available to you and us.
The PRC legal system is a civil law system based on written statutes. Prior court decisions are encouraged to be used for reference but it remains unclear to what extent the prior court decisions may impact the current court ruling as the encouragement policy is new and there is limited judicial practice in this regard. In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The legislation over the past three decades has significantly increased the protection afforded to various forms of foreign or private-sector investment in China. Our PRC subsidiaries are subject to various PRC laws and regulations generally applicable to companies in China. Although the PRC legal system is evolving rapidly, its current slate of laws may not be sufficient to cover all aspects of the economic activities in China, including such activities that relate to or have an impact on our business. Implementation and interpretations of laws, regulations and rules are not always undertaken in a uniform matter and enforcement of these laws, regulations and rules involves uncertainties.
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From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. Since the PRC legal system is based on written statutes and legal interpretations by the Standing Committee of the National People’s Congress, and the 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 in the PRC legal system than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies, internal rules, and regulations that may have retroactive effect and may change quickly with little advance notice. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property), and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations.
Dividends payable to our foreign investors and gains on the sale of our shares by our foreign investors may become subject to PRC tax.
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, including those registered in the Cayman Islands, which do not have an establishment or place of business in China 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 China. Similarly, any gain realized on the transfer of our Class A 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 China.
If we are deemed a PRC resident enterprise, dividends paid on our Class A ordinary shares, and any gain realized from the transfer of our Class A ordinary shares, would be treated as income derived from sources within China 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 our Class A 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. If we, KingWin BVI, or KingWin HK are considered to be PRC resident enterprises, it is unclear whether holders of our Class A 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 Class A ordinary shares by such investors, are deemed as income derived from sources within China and thus are subject to PRC tax, the value of your investment in our Class A ordinary shares may decline significantly.
We rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct or fund our whole business. To the extent any funds or assets in the business is in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong.
We are a Cayman Islands holding company. We rely principally on dividends and other distributions on equity paid by our PRC subsidiaries, including subsidiaries in Hong Kong and mainland China, for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If these subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us.
The ability of our PRC subsidiaries to distribute dividends is based upon its distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends to its shareholders only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. If our PRC subsidiaries incur debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us. Any limitation on our PRC subsidiaries’ ability to distribute dividends or other payments to its shareholders could materially and adversely limit our ability to make investments or acquisitions that could be beneficial to our whole business, pay dividends or otherwise fund our business.
To the extent cash or assets in our business is in mainland China or Hong Kong or in our PRC subsidiaries or Hong Kong subsidiaries, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong due to interventions in or the imposition of restrictions and limitations by the PRC government on our and our subsidiaries’ ability to transfer cash or assets. Any limitation on the ability of our PRC subsidiaries or Hong Kong subsidiaries to transfer cash or distribute dividends or other payments to their respective shareholders 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. Although currently there are no equivalent or similar restrictions or limitations in Hong Kong on cash transfers in, or out of, Hong Kong or our Hong Kong subsidiaries, if certain restrictions or limitations in mainland China were to become applicable to cash transfers in and out of Hong Kong or our Hong Kong subsidiaries in the future, the funds in Hong Kong or in our Hong Kong subsidiaries, likewise, may not be available to fund operations or for other use outside of Hong Kong. Cash transfers from our Hong Kong subsidiaries to Top KingWin or our other subsidiaries are subject to tax obligations imposed by Hong Kong laws to the extent applicable.
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PRC regulations related to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our operating entity to liability or penalties, limit our ability to inject capital into our operating entity or limit its ability to increase its registered capital or distribute profits.
In July 2014, the State Administration of Foreign Exchange of the PRC, or 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, which replaces the previous SAFE Circular 75. SAFE Circular 37 requires PRC residents, including PRC individuals and PRC corporate entities, to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we may make in the future.
Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, are required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its registration with the local branch of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local branch of SAFE to reflect any material change. If any PRC resident shareholder of such SPV fails to make the required registration or to update the registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiaries in China. In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE. Qualified banks should examine the applications and accept registrations under the supervision of SAFE. We have used our best efforts to notify PRC residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents to complete the foreign exchange registrations. However, we may not be informed of the identities of all the PRC residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements. We cannot assure you that all other shareholders or beneficial owners of ours who are PRC residents or entities have complied with, and will in the future make, obtain or update any applicable registrations or approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our operating entity, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit its ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.
Furthermore, as these foreign exchange and outbound investment related regulations are relatively new and their interpretation and implementation has been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border investments and transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. We cannot assure you that we have complied or will be able to comply with all applicable foreign exchange and outbound investment related regulations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.
PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC Operating Entities.
We are an offshore holding company with all of our operations conducted in China through our PRC subsidiaries. We may make loans to our PRC subsidiaries, subject to the approval, registration, and filing with governmental authorities and limitations of amount, or we may make additional capital contributions to our PRC subsidiaries. Any loans to wholly foreign-owned subsidiaries or operating entities in China are treated as foreign-invested enterprises under PRC law, and are subject to foreign exchange loan registrations with the NDRC, and SAFE or its local branches.
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Any funds we transfer to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in China. According to the relevant PRC regulations on foreign investors in China, capital contributions to wholly foreign-owned subsidiaries or PRC Operating Entities are subject to submission of information to and registration with certain PRC government authorities, including MOFCOM or its local counterparts and the State Administration of Market Regulation (“SAMR”) through its Enterprise Registration System, the National Enterprise Credit Information Publicity System and the local counterpart of SAFE. In addition, any foreign loan procured by those PRC Operating Entities cannot exceed statutory limits and is required to be registered with SAFE or its respective local branches.
On March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19, which took effect on June 1, 2015 and amended in December 2019. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the foreign exchange capitals of foreign investors and allows foreign investors to settle their foreign exchange capital at their discretion, but continues to prohibit foreign investors from using the Renminbi fund converted from their foreign exchange capital for expenditure beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises. The SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, effective in June 2016. Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign debts from foreign currency to Renminbi on a self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in China. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its non-affiliated entities. As this circular is relatively new, there remains uncertainty as to its interpretation and application and any other future foreign exchange related rules. Violations of these Circulars could result in severe monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to use Renminbi converted from the proceeds to be received from this public offering, to invest in or acquire any other PRC companies through our operating entity, which may adversely affect our business, financial condition and results of operations.
On October 23, 2019, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade and Investment, or the SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in China, as long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment. However, since the SAFE Circular 28 is newly promulgated, it is unclear how SAFE and competent banks will carry this out in practice.
In addition, a foreign invested enterprise shall use its capital pursuant to the principle of authenticity and self-use within its business scope. The capital of a foreign invested enterprise shall not be used for the following purposes: (1) directly or indirectly used for payment beyond the business scope of the enterprises or the payment prohibited by relevant laws and regulations; (2) directly or indirectly used for investment in securities or investments other than banks’ principal-secured products unless otherwise provided by relevant laws and regulations; (3) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license; and (4) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises).
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In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals or filings on a timely basis, if at all, with respect to future loans or future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from this offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our whole business.
We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by our offshore subsidiaries.
On February 3, 2015, the State Administration of Taxation, or the SAT, issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or SAT Bulletin 7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer of taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets, as such persons need to determine whether their transactions are subject to these rules and whether any withholding obligation applies.
On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.
Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who pays for the transfer is obligated to withhold the applicable taxes currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. 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.
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 the shares in our offshore subsidiaries and 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 SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in us by investors who are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin 37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that we should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.
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RISKS RELATED TO OUR CLASS A ORDINARY SHARES
We may experience extreme stock price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares.
Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively smaller public floats. As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large- capitalization companies. In particular, our Class A Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares.
In addition, if the trading volumes of our Class A Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Class A Ordinary Shares. This low volume of trades could also cause the price of our Class A Ordinary Shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our Class A Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Class A Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Class A Ordinary Shares. A decline in the market price of our Class A Ordinary Shares also could adversely affect our ability to issue additional Class A Ordinary Shares or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our Class A Ordinary Shares will develop or be sustained. If an active market does not develop, holders of our Class A Ordinary Shares may be unable to readily sell the Class A Ordinary Shares they hold or may not be able to sell their Class A Ordinary Shares at all.
Furthermore, the stock market in general, and the market prices for companies with operations in China in particular, have experienced volatility that often has been unrelated to the operating performance of such companies. The securities of some China-based companies that have listed their securities in the United States have experienced significant volatility since their initial public offerings in recent years, including, in some cases, substantial declines in the trading prices of their securities. The trading performances of these companies’ securities after their offerings may affect the attitudes of investors towards China-based companies listed in the United States in general, which consequently may impact the trading performance of our Class A Ordinary Shares, regardless of our actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or other matters of other China-based companies may also negatively affect the attitudes of investors towards China-based companies in general, including us, regardless of whether we have engaged in any inappropriate activities.
In addition to the above factors, the price and trading volume of the Class A Ordinary Shares may be highly volatile due to multiple factors, including the following:
| ● | regulatory developments affecting us, our clients or our industry; |
| ● | conditions in the financing advisory industry in China; |
| ● | announcements of studies and reports relating to the quality of our service offerings or those of our competitors; |
| ● | investor perceptions about us, our business and in general companies with operations in China; |
| ● | changes in the economic performance or market valuations of other financing advisory companies; |
| ● | general economic and securities market conditions; |
| ● | actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; |
| ● | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
| ● | the absence of cash dividends on our Class A Ordinary Shares; |
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| ● | changes in financial estimates by securities research analysts; |
| ● | announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures or capital commitments; |
| ● | additions to or departures of our senior management; |
| ● | detrimental negative publicity about us, our management or our industry; |
| ● | fluctuations of exchange rates between the Renminbi and the U.S. dollar; |
| ● | release or expiry of lock-up or other transfer restrictions on our outstanding Class A Ordinary Shares; |
| ● | the development and sustainability of an active trading market for our Class A Ordinary Shares; |
| ● | sales or perceived potential sales of additional Class A Ordinary Shares; and |
| ● | The COVID-19 pandemic, the ensuing economic recessions and deterioration in the credit market in many countries. |
Other than the aforementioned potential factors that may affect the price and trading volume of our Class A Ordinary Shares, there are no known factors that may add to this risk.
If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A Ordinary Shares, the market price for the Class A Ordinary Shares and trading volume could decline.
The trading market for our Class A Ordinary Shares will be influenced by research or reports that industry or securities analysts publish about our business. If industry or securities analysts decide to cover us and in the future downgrade our Class A Ordinary Shares, the market price for our Class A Ordinary Shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our Class A Ordinary Shares to decline.
Shares eligible for future sale may adversely affect the market price of our Class A Ordinary Shares, as the future sale of a substantial amount of outstanding Class A Ordinary Shares in the public marketplace could reduce the price of our Class A Ordinary Shares.
The market price of our Class A Ordinary Shares could decline as a result of sales of substantial amounts of our Class A Ordinary Shares in the public market, or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future offerings of our Class A Ordinary Shares.
If our financial condition deteriorates, we may not meet continued listing standards on the Nasdaq Capital Market.
We received a letter from the Nasdaq Stock Market LLC (“Nasdaq”) on August 18, 2025, notifying the Company that the Nasdaq staff has determined to delist the Company’s class A ordinary shares from The Nasdaq Capital Market (the “Delisting Determination”), because the bid price of the Company’s listed securities has closed at less than $1 per share over the previous 30 consecutive business days, and therefore no longer complies with the Nasdaq Listing Rule 5550(a)(2) (the “Rule”). We regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) on October 7, 2025. The Company is now subject to a Mandatory Panel Monitor for one year from October 7, 2025, as stipulated by Nasdaq Listing Rule 5815(d)(4)(B).
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The Nasdaq Capital Market requires companies to fulfill specific requirements in order for their shares to continue to be listed. If our Class A Ordinary Shares are delisted from the Nasdaq Capital Market at some later date, our shareholders could find it difficult to sell our Class A Ordinary Shares. In addition, if our Class A Ordinary Shares are delisted from the Nasdaq Capital Market at some later date, we may apply to have our Class A Ordinary Shares quoted on the Bulletin Board or in the “pink sheets” maintained by the National Quotation Bureau, Inc. The Bulletin Board and the “pink sheets” are generally considered to be less efficient markets than the Nasdaq Capital Market. In addition, if our Class A Ordinary Shares are delisted at some later date, our Class A Ordinary Shares may be subject to the “penny stock” regulations. These rules impose additional sales practice requirements on broker-dealers that sell low- priced securities to persons other than established clients and institutional accredited investors and require the delivery of a disclosure schedule explaining the nature and risks of the penny stock market. As a result, the ability or willingness of broker-dealers to sell or make a market in our Class A Ordinary Shares might decline. If our Class A Ordinary Shares are delisted from the Nasdaq Capital Market at some later date or become subject to the penny stock regulations, it is likely that the price of our Class A Ordinary Shares would decline and that our shareholders would find it difficult to sell their shares.
We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.
We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime.
As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.
We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
The determination of our status as a foreign private issuer is made annually on the last business day of our most recently completed second fiscal quarter. We would lose our foreign private issuer status if (1) a majority of our outstanding voting securities are directly or indirectly held of record by U.S. residents, and (2) a majority of our shareholders or a majority of our directors or management are U.S. citizens or residents, a majority of our assets are located in the United States, or our business is administered principally in the United States. If we were to lose our foreign private issuer status, the regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher. We may also be required to modify certain of our policies to comply with corporate governance practices associated with U.S. domestic issuers, which would involve additional costs.
As an “emerging growth company” under the Jumpstart Our Business Startups Act, or JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. We are an emerging growth company until the earliest of:
| ● | the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion or more; |
| ● | the last day of the fiscal year following the fifth anniversary of our initial public offering; |
| ● | the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or |
| ● | the date on which we are deemed a “large accelerated issuer” as defined under the federal securities laws. |
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For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act for up to five fiscal years after the date of our initial public offering. We cannot predict if investors will find our Class A Ordinary Shares less attractive because we may rely on these exemptions. If some investors find our Class A Ordinary Shares less attractive as a result, there may be a less active trading market for our Class A Ordinary Shares and the trading price of our Class A Ordinary Shares may be more volatile. In addition, our costs of operating as a public company may increase when we cease to be an emerging growth company.
We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our Class A Ordinary Shares.
We do not expect to be treated as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for the current taxable year or in the foreseeable future. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you the U.S. Internal Revenue Service will not take a contrary position. Furthermore, this is a factual determination that must be made annually after the close of each taxable year. If we are a PFIC for any taxable year during which a U.S. holder holds our Class A Ordinary Shares, certain adverse U.S. federal income tax consequences could apply to such U.S. holder, including increased U.S. federal income tax liability and additional reporting requirements. Our status as a PFIC is a fact-intensive determination made on an annual basis. Accordingly, our U.S. counsel expresses no opinion with respect to our PFIC status and also expresses no opinion with regard to our expectations regarding our PFIC status.
Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of the Class A Ordinary Shares for return on your investment.
We currently intend to retain most, if not all, of our available funds and any future earnings in the future to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A Ordinary Shares as a source for any future dividend income.
Our board of directors has discretion as to whether to distribute dividends, subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium; provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Class A Ordinary Shares will likely depend entirely upon any future price appreciation of our Class A Ordinary Shares. There is no guarantee that our Class A Ordinary Shares will appreciate in value in the future or even maintain the price at which you purchased the Class A Ordinary Shares. You may not realize a return on your investment in our Class A Ordinary Shares and you may even lose your entire investment in our Class A Ordinary Shares.
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We may need additional capital and may sell additional Class A Ordinary Shares or other equity securities or incur indebtedness, which could result in additional dilution to our shareholders or increase our debt service obligations.
We may require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If our cash resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities. The sale of additional equity securities or equity- linked debt securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or terms acceptable to us, if at all.
We will incur increased costs as a result of being a public company.
As a new public company, we expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as rules subsequently implemented by the SEC and the Nasdaq Capital Market, impose various requirements on the corporate governance practices of public companies. As a company with less than $1.235 billion in net revenues for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting.
We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. We expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.
In the past, shareholders of a public company often brought securities class action suits against the company following periods of instability in the market price of that company’s securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.
Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud which may affect the market for and price of our Class A Ordinary Shares.
Prior to our initial public offering, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. We recently became a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report from management on our internal control over financial reporting in our annual report on Form 20-F. In addition, once we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firms must attest to and report on the effectiveness of our internal control over financial reporting. In connection with the audits of our consolidated financial statements as of December 31, 2023 and 2022, we and our independent registered public accounting firms identified material weaknesses and significant deficiencies in our internal control over financial reporting. As defined in the standards established by the PCAOB, 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. The material weaknesses identified are: (i) inadequate segregation of duties for certain key functions due to limited staff and resources; (ii) lack of documented policies and controls (including IT controls and cybersecurity framework) which enable management and other personnel to understand and carry out their internal control responsibilities; (iii) lack of audit committee and internal audit function to establish formal risk assessment process and internal control framework; and (iv) lack of accounting staff and resources with appropriate knowledge of generally accepted accounting principles in the United States (“U.S. GAAP”) and SEC reporting and compliance requirements.
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We intend to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses, including (i) hiring more qualified staff to fill up the key roles in the operations; (ii) setting up a financial and system control framework with formal documentation of polices and controls in place; and (iii) hiring additional qualified financial professionals such as corporate controller familiar with U.S. GAAP to increase the number of qualified financial reporting personnel and monitor daily transaction recording and general ledger work. We will not be able to fully remediate these material weaknesses until these steps have been completed and have been operating effectively for a sufficient period of time. There can be no assurance that we will be successful in pursuing these measures, or that these measures will significantly improve or remediate the material weaknesses described above.
In addition, in the course of preparing our financial statements for the years ended December 31, 2023 and 2022, we and our independent registered public accounting firms identified two significant deficiencies: (i) lack of evidence or track to show management’s review performance; and (ii) lack of documentary evidence of proper review or approval process to ensure the list of related parties is complete. To address these significant deficiencies, we plan to adopt a remediation plan to set up a management’s review system with requirements to leave accounting supervisor /manager or management’s signature after reviewing financial statements and the list of related parties. There can be no assurance that we will be successful in pursuing the measures, or that the measures will significantly improve or remediate the significant deficiencies described above.
We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to the material weaknesses and significant deficiencies in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses or significant deficiencies. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, material weaknesses or significant deficiencies in internal control over financial reporting may be discovered in the future. If we fail to remediate our current or future material weaknesses or significant deficiencies or to meet the demands that will be placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to accurately report our financial results, or report them within the timeframes required by law, our consolidated financial statements may be restated, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our Class A Ordinary Shares could be materially and adversely affected, the Class A Ordinary Shares may be suspended or delisted from Nasdaq, and our reputation, results of operations and financial condition may be adversely affected. Failure to comply with Section 404 could also potentially subject us to sanctions or investigations by the SEC or other regulatory authorities.
Item 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
Our Corporate History and Structure
Top KingWin Ltd was incorporated under the laws of Cayman Islands on February 16, 2022 as an exempted company and structured as a holding company. Tiancheng Jinhui, our PRC operating subsidiary, was incorporated in the PRC on October 25, 2018.
Our principal executive offices are located at Room 1304, Building No. 25, Tian’an Headquarters Center, No. 555, North Panyu Avenue, Donghuan Street, Panyu District, Guangzhou, Guangdong Province, PRC. Our telephone number at this address is +86 400 661 3113. Our registered office in the Cayman Islands is currently located at the office of 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9009, Cayman Islands, which may be changed from time to time at the discretion of our directors. Our agent for service of process in the United States is Cogency Global Inc.
On March 15, 2022, KingWin BVI was incorporated under the laws of the British Virgin Islands as the Company’s wholly-owned subsidiary and its intermediate holding company to facilitate financing. KingWin HK was incorporated on April 19, 2022 as KingWin BVI’s wholly-owned subsidiary in Hong Kong.
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On July 1, 2022, KingWin HK entered into a share transfer agreement with each of the four then shareholders of Tiancheng Jinhui, acquiring 100% equity interests in Tiancheng Jinhui by cash consideration. Following the share transfers, the Company owns 100% equity interests of KingWin BVI, KingWin HK and Tiancheng Jinhui.
On July 23, 2022, the Company and its shareholders undertook a series of corporate actions, including amending the Company’s authorized share capital, re-designating its ordinary shares into Class A Ordinary Shares and Class B Ordinary Shares, and issuing a total of 68,442 of Class A Ordinary Shares and 31,558 of Class B Ordinary Shares to 23 shareholders. Each Class A Ordinary Share of our Company is entitled to one (1) vote per share; each Class B Ordinary Share of our Company is entitled to twenty (20) votes per share. Following the reorganization, the controlling shareholder of the Company is the same as that of Tiancheng Jinhui prior to the reorganization.
On January 10, 2023, the Company issued a total of 8,213,040 Class A Ordinary Shares and 3,786,960 Class B ordinary shares to its existing shareholders, which increased pro rata the number of shares each shareholder owns and did not change their respective percentage of ownership in the Company. Ordinary shares outstanding after this issuance is 12,000,000 ordinary shares, including (i) 8,213,040 Class A ordinary shares and (ii) 3,786,960 Class B ordinary shares.
On April 20, 2023, the Company completed its initial public offering of 2,750,000 Class A Ordinary Shares, $0.0001 par value per share (the “IPO”). The Class A Ordinary Shares were sold at an offering price of $4.00 per share, generating gross proceeds of approximately $11.0 million, before deducting underwriting discounts and other related expenses payable by the Company. Our Class A Ordinary Shares began trading on the Nasdaq Capital Market on April 18, 2023 under the ticker symbol “TCJH”.
In December 2023, Sky KingWin Ltd (referred to as “Buyer”) entered into an agreement with FutureScope Advisors LTD, Visionary Strategies LTD, Mr. Zhiliang Hu and Ms. Li Qian. This agreement allowed the Buyer to acquire 100% equity interest in Industrial Insights Consulting., Ltd (referred to as “Target Company”). And on December 20, 2023, Sky KingWin Ltd. through the agreement with Industry Insights Consulting., Ltd obtained 100% equity interests of Industrial Insights Consulting., Ltd.
Recent Developments
Nasdaq Compliance
On June 7, 2024, the Company received a notice from the Nasdaq Stock Market LLC (“Nasdaq”) that the Company was not in full compliance with the minimum bid price requirement set forth in Nasdaq Listing Rules for continued listing on the Nasdaq Capital Market.
On May 19, 2025, the Company received a formal notification from Nasdaq that the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires the Company’s Class A Ordinary Shares to maintain a minimum bid price of $1.00 per share.
On August 18, 2025, the Company was informed that the Nasdaq staff has determined to delist the Company’s class A ordinary shares from Nasdaq (the “Delisting Determination”), because the bid price of the Company’s listed securities has closed at less than $1 per share over the previous 30 consecutive business days, and therefore no longer complies with the Nasdaq Listing Rule 5550(a)(2). Normally, a company would be afforded a 180-calendar day period to demonstrate compliance with that rule. However, pursuant to the Nasdaq Listing Rule 5810(c)(3)(A)(iv), the Company is not eligible for any compliance period specified in Nasdaq Listing Rule 5810(c)(3)(A) due to the fact that the Company effected a reverse stock split in May 2025, or within the prior one-year period. The Company requested an appeal of the Delisting Determination to the hearing panel and attended such appeal on September 23, 2025.
On October 7, 2025, the Company received a notification letter from Nasdaq which confirmed the Company has demonstrated compliance with the bid price requirement in the Nasdaq Listing Rule 5550(a)(2). In addition, in application of Nasdaq Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the notification letter. If, within that one-year monitoring period, the Company again falls out of compliance with the bid price rule, notwithstanding Rule 5810(c)(2), the Company will not be permitted to provide a plan of compliance with respect to that deficiency and will not be granted additional time for the Company to regain compliance with respect to that deficiency, nor will the Company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, the Company will receive a delist determination letter and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable. The Company will have the opportunity to respond/present to the Hearings Panel as provided by Listing Rule 5815(d)(4)(C). The Company’s securities may be at that time delisted from Nasdaq.
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New Subsidiaries
In February 2025, the Company created a wholly owned subsidiary, Top KingWin Technology Inc., incorporated in the State of California, U.S.A.
In March 2025, the Company created a wholly owned subsidiary, Top KingWin Hi Tech Inc.. Top KingWin Hi Tech Inc. was incorporated in the State of Colorado, U.S.A. On September 22, 2025, Top KingWin Hi Tech Inc. entered into a sales contract with a certain purchaser, Walker Times International (Hong Kong) Co., Ltd. for sale of an aggregate of 10,000 units of its TK-D2C AI Robots to the Purchaser at a price of $480 per unit for total proceeds of US$4.8 million. The robots are to be delivered in batches through October 2025 to September 2026.
Incentive Plan and Incentive Shares
On August 12, 2025, the Company filed a registration statement on Form S-8 (File No. 333- 289521) to register the Company’s 2025 Equity Incentive Plan and to re-offer up to 284,481 class A ordinary shares, par value of $0.0025 per share, granted to certain employees of the Company and its affiliates as compensation for the period from October 1, 2024 to March 31, 2025.
On January 23, 2026, the Company filed a registration statement on Form S-8 (File No. 333- 292913) to re-offer up to 364,101 Class A Ordinary Shares, granted to certain employees of the Company and its affiliates for the period from April 1, 2025 to September 30, 2025.
Other Developments
In August 2024, the Company created a wholly owned subsidiary, Shenzhen Tomorrow Innovation Core Technology Co., Ltd. (“Shenzhen Tomorrow Innovation”). Shenzhen Tomorrow Innovation later acquired Guji Technology (Shenzhen) Co., Ltd. to explore the market of artificial intelligence (“AI”) hardware supply chain and AI-assisted information technology solutions. Shenzhen Tomorrow Innovation’s company name was later changed to Shenzhen Tiancheng Chuangxin Technology Co., Ltd. (“Tiancheng Chuangxin”) on October 16, 2024.
On September 5, 2024, the Company entered into a certain securities purchase agreement with 25 investors, pursuant to which the Company agreed to sell up to $38,000,000 of Class A Ordinary Shares at a per share purchase price of $0.23. The parties to the agreement have each made customary representations, warranties and covenants. This offering was consummated on September 10, 2024, upon satisfaction of all closing conditions. The issuance of the Class A Ordinary Shares was in reliance on the exemption from registration provided by the Regulation S.
On October 21, 2024, the Company’s Class A Ordinary Shares began trading under a new ticker symbol “WAI” on the Nasdaq Capital Market, replacing the previous symbol “TCJH”.
On November 6, 2024, the Company filed a registration statement on Form F-3 (File No. 333-283030) to register up to $200,000,000 Class A Ordinary Shares, debt securities, warrants, rights and units of the Company, which registration statement was declared effective by the SEC on February 11, 2025.
On November 25, 2024, the Company entered into certain securities purchase agreement with an affiliate of ATW Partners, LLC, an accredited investor as such term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended, pursuant to which the Company agreed to issue to the investor a new series of convertible notes in the original principal amount up to $2,500,000, which note shall be convertible into Class A Ordinary Shares of the Company, in accordance with the terms of the note, for $2,250,000 in gross proceeds. The proceeds are used for general corporate and working capital purposes at the discretion of the Company. The conversion shares issuable upon this convertible note were registered through the registration statement on Form F-3, as amended (File No. 333-283030), initially filed with the SEC on November 6, 2024.
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On December 30, 2024, Sky KingWin entered into an agreement with Bosera Asset Management Co., Ltd., a New York company (“Bosera”) (the “December 30 Agreement”), pursuant to which agreement Bosera agreed to purchase 100% equity interest in the Target Company in exchange for cash consideration (the “Purchase Price”) from Sky KingWin. On January 14, 2025, Sky KingWin and Bosera entered into a supplemental agreement, stipulating that the payment date for the Purchase Price is extended from January 15, 2025 to March 31, 2025 (the “Extended Payment Date”). If the Purchase Price is not fully paid by the Extended Payment Date, a penalty of 1% will be applied to the remaining unpaid balance for each day the Purchase Price is delayed. All other terms of the December 30 Agreement remain unchanged.
On February 18, 2025, the Company entered into certain securities purchase agreement with an affiliate of ATW Partners, LLC, an accredited investor as such term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended, pursuant to which the Company agreed to issue to the investor a new series of convertible notes in the original principal amount up to $1,000,000, which note shall be convertible into Class A Ordinary Shares of the Company, in accordance with the terms of the note, for $900,000 in gross proceeds. The proceeds are used for general corporate and working capital purposes at the discretion of the Company. The issuance of the convertible notes was made pursuant to the shelf registration statement on Form F-3, as amended (File No. 333-283030), initially filed with the SEC on November 6, 2024.
On June 23, 2025, the Company entered into certain securities purchase agreement with certain non-U.S. investors (the “Purchasers”) pursuant to which the Company agreed to sell 3,500,000 of its class A ordinary shares in a registered direct offering at a price of $0.4343 per share, for gross proceeds of approximately $1.5 million (the “June 2025 Offering”). The Company intended to use the net proceeds for working capital and general corporate purposes. The offering closed on June 26, 2025.
On July 7, 2025, the Company and the Purchasers entered into a Termination Agreement and Release (the “Termination Agreement”), pursuant to which the parties agreed to unwind the June 2025 Offering and terminate the corresponding securities purchase agreement in its entirety. Under the terms of the Termination Agreement, (1) all of the shares of the Company issued to the Purchasers shall be returned to the Company by way of the Company repurchasing such Shares in accordance with its articles of association and holding such purchased shares as treasury shares and canceled in accordance with applicable law; and (2) the Company will pay to each Purchaser the full amount of the purchase price paid by such Purchaser under the SPA following the repurchase of such shares. The Termination Agreement includes mutual releases and provides that neither party admits any liability or wrongdoing.
On August 1, 2025, the Company entered into certain securities purchase agreement with certain non-U.S. investors pursuant to which the Company agreed to sell 26,136,363 of its class A ordinary shares, par value of $0.0025 each, for gross proceeds of approximately $11.5 million, at a price of $0.44 per share. The Company intended to use the net proceeds for working capital and general corporate purposes. This offering closed on August 5, 2025.
The following diagram illustrates our corporate structure as of the date of this annual report:
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The SEC maintains an internet site that contains reports and other information regarding issuers, including the Company, that file electronically with the SEC. The address of the SEC’s website is www.sec.gov.
B. Business Overview
Overview
We are not a Chinese operating company, but an offshore holding company incorporated in the Cayman Islands conducting our business through our wholly-owned subsidiary in China. We provide a number of business services in China to young and emerging companies including (i) corporate business training services, which mainly focus on advanced knowledge and new perspectives on the capital markets, (ii) corporate consulting services, which mainly focus on various aspects of fundraising, (iii) advisory and transaction services, (iv) sales of devices to support data collection and analysis and (v) sales of robots. Our main clients are entrepreneurs and executives in small and medium enterprises (“SMEs”) in China. Additionally, in 2025, our new subsidiary in Colorado, USA, commenced the business of selling robots and made sales to a Hong Kong company during the year, generating some revenue.
Corporate business training, corporate consulting, advisory and transaction services, sales of devices to support AI data collection and analysis, sales of robots, and other revenue constituted approximately 5%, 2%, 2%, 83%, 6% and 2%, respectively, of our continuing operations during the year ended December 31, 2025.
Supported by the rapid economic growth and friendly business policies in China, the number of SMEs in China has significantly increased from 2016 to 2024. Frost & Sullivan expects the number of SMEs in China will steadily increase at 9.8% CAGR from 2021 to 2026. We believe that the increasing number of SMEs provides a solid foundation for the future development of our business.
With the increase in number of companies entering the China market, most industries in China are becoming more competitive. Therefore founders, senior management teams and key employees of companies have an increasing awareness for professional business education in order to enhance their professional knowledge, boost their company’s strategic growth and allow the company to stay competitive in today’s economy.
China’s economy is transitioning from traditional sectors like real estate and manufacturing to technology-driven industries, with the new economy, particularly AI, becoming a key driver of growth. Since 2022, China’s AI sector has surged, fueled by government support, technological advancements, and increased investments. AI is increasingly integrated into fields like healthcare, finance, and manufacturing, with progress in domestic AI chips, autonomous systems, and industrial automation. Stricter regulations on AI ethics and data security are shaping the industry, while Chinese AI firms expand globally, boosting international competitiveness.
China’s economy is shifting from traditional sectors like real estate and manufacturing to technology-driven industries, with AI emerging as a key growth driver. Since 2022, China’s AI sector has grown rapidly, fueled by government support, technological breakthroughs, and rising investments. AI is increasingly integrated into healthcare, finance, and manufacturing, supported by advancements in domestic AI chips and automation, while stricter regulations on ethics and data security shape the industry’s development. Chinese AI firms are also expanding globally, enhancing their competitiveness.
We are capitalizing on this trend by transitioning to AI support hardware and services, aligning with the rapid growth of new economy industries. Our mission is to deliver comprehensive services to meet clients’ needs across all stages of their development. In mid-2024, we began selling computing and data collection and analysis equipment, targeting small and medium enterprises (SMEs). These devices enable efficient data processing and optimization. This business has achieved remarkable success, contributing 83% of our total revenue in 2025. Additionally, we launched a new business segment selling AI robots in 2025, which enabled our AI business development to keep pace with customer needs.
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Our Services
Key Values and Drivers of Our Business
1. Client-centric
We have centered our business model on forming long-standing relationships with our clients, who are mainly entrepreneurs and executives of SMEs in China. Our services focus on catalyzing and providing guidance on every stage of our clients’ business life cycle, as illustrated in the following section – Business Model.
We are dedicated to developing in-depth knowledge about our clients. In order to provide valuable business intelligence to the clients, our corporate trainers and experts take effort to learn about the clients, their industry and the competition they are facing. We believe that when we understand what our clients are trying to achieve in their businesses, we are better equipped to find ways to assist them in the areas that matter most to them. Furthermore, we help our clients track the progress they make through the whole process of employing our services. We strive to ensure that our clients will have a positive experience using our services. We also focus on the client feedback, which drives us to continuously improve our services. The continuous interactions with our clients create a positive cycle – on the one hand it constantly demonstrates to our clients our advanced knowledge of their operations and the business sectors they operate in, while on the other hand it continues to help us gain deeper knowledge of our clients and their industries which further enhances our ability to help them succeed throughout their entire business life cycle.
We believe that successful entrepreneurs will continue to play a transformative role in China’s economy, and our long- term relationships with them allow us to develop critical insights into a wide range of industries. Enhancing our knowledge and insights of different sectors of the economy in turn enables us to better service and advise our clients as a whole.
Client centricity is one of our key values, which we believe increases client satisfaction and loyalty and results in stronger client relationships. We believe this approach promotes our brand recognition and increases client stickiness that brings recurring revenue from the same clients. Such loyalty of clients also provides an opportunity for us to serve businesses at multiple stages in their lifecycle.
In addition, this client-centric approach yields powerful network effects. Over time, we continue to build a growing network of established entrepreneurs, investors, service professionals, and influencers, each of which potentially could serve as an effective referral source. We believe that our network increases the value of services we can deliver to our clients, and therefore is critical to our long-term success.
With the rise of AI, starting from 2024, we have expanded our offering by leveraging our deep understanding of our clients and their actual needs. We provide computing power, data collection, and data analysis equipment to our clients. This helps our clients with their transformation or achieving a leading market position.
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2. Value-maximizing and value-driven
Our model involves identifying and engaging entrepreneurs and the businesses they create and serving them throughout various stages of their growth. Our principal business lines are methodically arranged to service our clients according to their aptitude/suitability and needs/goals. From informative seminars to specific and tailored guidance and advice, we maintain a high professional standard and ensure that our services add meaningful value for clients in certain phases of their development.
Business Model for Our Traditional Business
Our traditional business model is to lay out a roadmap to guide our clients in every stage of their business life-cycle, as illustrated below. We seek to understand what our clients are thinking and doing at each stage of their business growth. These insights allow us to offer the most relevant services during each stage and turn more prospective clients into paying clients.
Business Model for Our Hardware Sales Business
We seek business opportunities through our client relationship network. By understanding and analyzing the needs of existing clients or new clients introduced by them, we provide advice and offer products. The following is the roadmap for our hardware sales business.
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I. Corporate Business Training Services
Approximately 5% of our total revenues for the fiscal year ended December 31, 2025 was generated from our corporate business training service.
We offer diverse seminars, mainly focusing on basic knowledge and new perspectives on the capital markets. The seminars are mainly designed for entrepreneurs and executives of SMEs at the start-up stage of their business. Our goal is to help our clients at this stage to develop a general understanding of the capital markets and prepare them to embark on their financial journey.
We are specialized in providing professional seminars related to capital markets such as an initial understanding of the capital markets, guidance for business planning, preparation, financial guidance, and fundraising, as well as of an introduction of being a publicly listed company, such as the advantages and disadvantages of being a public company, the listing requirements, and basic knowledge of laws and regulations of different capital markets.
The trainings are typically delivered on-site. There are three different levels of trainings. We start to prepare all levels of seminars from the last quarter of the previous year, including scheduling and budgeting. First, we select topics focusing on the knowledge and skills that we consider the attendees may need to know in the capital markets and entrepreneurship based on past feedback or recent trends. Upon selecting the specific topics, together with a selected group of professionals in the industry, we design the syllabus for the seminars for the upcoming year. After we finish designing the seminars, we start to formulate specific plans for each seminar. The plans include: (1) inviting experts and celebrities in the industry to speak at our seminars, coordinating with them regarding their availability and confirming their attendance, (2) coordinating with venue owners to secure the event venue, and (3) engaging event set-up and other service providers. After the schedules and budgets are determined, we formulate, review and adjust the specific plan for each seminar. Sometimes we hire outside experts and celebrities in the industry or service personnel to conduct seminars on our behalf. In order to ensure the quality of the seminars, such third-party experts and celebrities follow our instructions and deliver the content as designed by us.
After the design of seminars we begin to solicit clients to our courses. The first-level seminars are free and serve the purposes of attracting more potential clients for courses in the subsequent stages. For clients who finish our first-level seminars and would like to further their study, they will purchase the second and third level of courses.
Growth of Corporate Business Training Services
We started providing corporate business training services in the PRC in 2020. In order to promote our business and establish a strong market presence, we held these seminars frequently to attract new clients and retain existing clients. In 2024 and 2023, we held more than one hundred seminars in the cities of Guangzhou, Shenzhen, Chengdu, Chongqing, Jinan, etc., in China. The seminars are usually held in company conference rooms or hotel ball rooms. If the seminars are held in a hotel ball room, we will pay a fee. Sometimes local governments invite us to offer corporate business training to the enterprises in their municipalities, which we consider is a good opportunity for us to approach more potential enterprises and promote our services. As of the date of this Annual Report, all of our clients are based in the PRC.
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Levels of Seminars
We have developed a portfolio of private offline seminars for entrepreneurs, business managers, and equity investors, which include three levels: (1) first-level seminar, Opportunities of Capital Markets; (2) second-level seminar, System of Capital Markets and Model of Capital Markets; (3) third-level seminar, Project Incubation Camp. For the year ended December 31, 2025, we have held 15 first-level seminars, 15 second-level seminars, and 6 third-level seminars. This offline seminar program also offers good opportunities for us to market our corporate consulting services.
In the first and second levels, the seminars are mostly provided by our own experts. In the third-level seminars, we hired third-party experts, including certified public accountants and attorneys. We have employment agreements or service agreements with these experts.
First Level: Opportunities of Capital Markets
Our first level of the courses, Opportunities of Capital Markets, is a collection of large-scale seminars that are offered free to attendees. Each seminar usually has 100-150 attendees. The purpose of the first-level courses is to attract more potential clients by sharing business intelligence with entrepreneurs and executive management of SMEs, and potential equity investors. The seminars introduce basic knowledge of capital markets, discuss newly published government policies, and share industry opportunities and perspectives on corporate growth and transformation.
Second Level: System of Capital Markets and Model of Capital Markets
Our second-level seminar, System of Capital Markets and Model of Capital Markets, provides more detailed knowledge of capital markets and provides training on real-world business skills (e.g., leadership training, corporate governance) for entrepreneurs and executive management of SMEs. The seminars last one to two days and usually have more than 100 attendees per seminars.
Third Level: Project Incubation Camp
Our third-level program, Project Incubation Camp, provides attendees with the opportunity to discuss and share insights on topics relating to capital markets in mainland China. The experts would also teach the attendees how to design their business and fundraising plans. This program is a small-group seminar launched in 2021 as requested by our clients. Each seminar has less than 10 attendees.
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II. Corporate Consulting Services
Approximately 2% of our total revenues for the fiscal year ended December 31, 2025 was generated from corporate consulting service. As of the end of 2025, we have 11 corporate consulting services clients.
Starting from the second quarter of 2021, we have been providing corporate consulting services to SMEs that have the intention to raise funds or to go public in domestic or overseas markets, who are typically in the growth stage of their business. Our goal is to become a well-known corporate consulting services provider with clients and offices throughout the PRC. Leveraging our position as a hub in China’s relevant industry and our data collection, analytics, and presentation capabilities, we believe that we are well-positioned to provide our clients with relevant corporate consulting services.
We provide a combination of corporate consulting services that are bundled and customized to fulfill each client’s unique financial needs. After an initial due diligence study, if a client determines to go forward with our corporate consulting services for its fundraising or going public, we will enter into a service agreement with the client, where client can decide to contract a single modular service or a combination of services from the following clusters.
We charge a fixed price for our services and revenue is recognized when we complete the services agreed upon the contract. Each of the specific services is considered as one performance obligation. Each performance obligation is independent to each other with specific price identified in the contract.
Since the clients can cancel each specific service before it is delivered without any penalty, the Company does not have an enforceable right to payment from the client, and thus the services and prices are excluded from the contract until the individual specific service starts or advance payment is received. Before the full and complete delivery of the services, the clients cannot benefit from the performance and cannot control the work in progress. We control the rights to our customized services, and the services can easily be redirected to another client without incurring significant costs. As a result, the revenues do not meet the criteria of recognizing revenue over time, and such services shall only be useful to the client after delivered in full. The revenue is therefore recognized at the point in time when the deliverables, in the form of reports are delivered based on the specific terms of the contract.
Cluster I
| Due Diligence | We deliver a due diligence report to the client by conducting a due diligence investigation, to provide a comprehensive exploration and explanation of the business and financial position of the client, including their business model, business outlook, management assets and liabilities, etc.; |
| Business Model | We deliver a business plan, assisting the clients to streamline and standardize their business model and organization structure in order to achieve more efficiently their desired results for fundraising or future listing plan; and |
| Resource Planning | We deliver a resource planning report, helping clients to identify, acquire, and allocate internal and external resources necessary to optimize their supply chain management, client service, capacity management and service competition, and ultimately achieve their plan of fundraising or future listing. |
Cluster II
| Reorganization | We assist the clients in preparation for investor presentations, due diligence materials required for interested investors or investment banks in financing the clients during the process of fundraising; |
| Pre-IPO | We connect clients with capital needs to venture capital funds, banks, or other financial institutions that can provide potential assistance for their financing needs; and |
| Regulation education | We help clients become familiar with regulations of the capital markets and assist them in meeting the standards for going public. |
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III. Advisory and Transaction Services
Approximately 2% of our total revenues for the fiscal year ended December 31, 2025 was generated from advisory and transaction services. Because the nature of our advisory and transaction services requires us to dedicate a large amount of time and resources to each client, we were able to generate relatively large revenue from a small number of clients. As of the end of 2025, we have 8 advisory and transaction services clients.
Our advisory and transaction services aim to connect entrepreneurs and businesses with diversified sources of capital. As their business grows, our clients may seek the capital required to fund the business’ ongoing operations and growth objectives at the expansion stage. However, SMEs often have limited access to resources and capital, in part due to their lack of a sound financial plan and exposure to established, robust fundraising networks. Revenues from advisory and transaction services represent service fees we charge associated with our tailored advisory services, which can cover a broad range of activities from helping to design a financial plan, build up and maintain the corporate image of our clients and plan to close the fundraising transactions. Revenues from providing advisory and transaction services to clients are recognized at a point in time when the fundraising transaction and the advisory services performance is completed under the terms of the respective contract.
The service fees were charged based on a certain percentage of the fund raised by our clients, which were only payable upon the completion of fundraising. Starting from the second half of 2022, as the bargaining power increased as our business developed, we plan to charge the service fee at an agreed-upon amount, which is determined on a case-by- case basis with reference to the scope of services to be provided and the size of the transactions, payable by installments upon the occurrence of the milestone events defined in the contracts.
We may introduce investors to our clients for their fundraising needs, but such activities would be limited to: 1) identifying, screening, and contacting potential investors; 2) distributing relevant requested materials of clients to investors; 3) discussing information included in any materials furnished to investors, provided that we do not provide advice to the valuation or advisability of the investment; and 4) arranging or participating in meeting with clients and investors.
Our PRC counsel advised us that based on their understanding of current PRC laws and consultation with relevant PRC administrative authority, the advisory and transaction services we provide do not require special/broker-dealer licenses in mainland China as they do not involve brokerage, securities dealings, asset management services, or other regulated activities under PRC law.
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Ⅳ. Revenues from Sales of Devices to Support Data Collection and Analysis
For the fiscal year ended December 31, 2025, approximately 83% of our total revenues, amounting to $6,676,427, was generated from our IT-solution related device sales business. This segment focuses on providing hardware to small and medium-sized enterprises (SMEs).
Our device sales business is designed to empower SMEs by offering access to computing power, data collection tools, and data analytics equipment. Many SMEs face challenges in leveraging information technologies due to limited resources, technical expertise, or access to cost-effective solutions. Our services bridge this gap by providing hardware infrastructure and analytics capabilities that align with their operational and growth objectives.
Ⅴ. Revenues from Sales of Robots
For the fiscal year ended December 31, 2025, approximately 6% of our total revenues, amounting to $ 480,000, was generated from our robots sales business. This segment focuses on multi-scenario perceptual interaction AI robots.
Industry Development and Product Introduction
With the large-scale commercial adoption of artificial intelligence robots in the global market, we are seizing market opportunities to develop new growth drivers for its profitability. Our business in this field is still in the initial exploratory stage. Currently, we are engaged in the procurement and resale of a desktop robot with multi-scenario perception and interactive capabilities.
Current Progress & Future Development
Top KingWin Hi Tech Inc., our U.S. subsidiary, has entered into a sales contract with a certain purchaser, Walker Times International (Hong Kong) Co., Ltd. for sale of an aggregate of 10,000 units of its TK-D2C AI Robots to the Purchaser at a price of $480 per unit for total proceeds of US$4.8 million. We fulfilled 10% of the contracted orders in 2025, and the remaining deliveries are scheduled to be completed by September 2026.
We are preparing plans for the independent research and development and manufacturing of artificial intelligence robots, which will be conducted by Top KingWin Technology Inc., our U.S. subsidiary. Going forward, we will further expand our AI-related businesses. We plan to provide customized software development, technology solutions, and peripheral hardware to clients in China, focusing on fields such as intelligent manufacturing, urban construction, and healthcare industry.
Relevance to Existing Operations
We have built transferable competitive advantages through our existing business, including industry-wide channels and networks, corporate consulting experience, market research expertise, financing experience, and mergers and acquisitions experience. These advantages effectively support the Company’s entry into the artificial intelligence robot industry.
In 2025, we launched a new business segment selling AI robots. As of December 31, 2025, it recognized $480,000 in revenue from the sale of AI robots. This revenue stemmed from a contract signed on September 22, 2025, by the subsidiary, Top Kingwin Hi Tech Inc., with Walker Times International (Hong Kong) Co., Ltd., covering 10,000 units at $480 each, for total proceeds of $4.8 million. Deliveries began in October 2025. By year-end, 1,000 units had been delivered, representing 10% of the total contracted quantity. Remaining revenue will be recognized upon future delivery.
Our marketing-focused service package
During the course of providing corporate business training services and corporate consulting services, we have built a network of entrepreneurs and start-up projects, many of whom are willing to commit their personal wealth to attractive investment opportunities. Therefore, we are able to provide our advisory and transaction services to connect growth enterprises and entrepreneurs with potential investors.
Our advisory and transaction services include the following to provide necessary support to our clients in the whole fundraising process:
| ● | Corporate positioning (help the client understand the nature of their business, what benefits are available to them in their industry, what are their core products, who are their consumers, where they are in the competition); |
| ● | Design and production of business plan and financing plan; |
| ● | Design and production of corporate marketing materials; |
| ● | Assess client to prepare for the business plan, financial plan and equity structure design; |
| ● | Development and maintenance of investor/potential investor relations; |
| ● | Event coordination services; and |
| ● | Roadshow services: including logistic arrangement and online roadshow arrangement. |
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Our engagement approach
Our advisory and transaction service model begins with discovering and engaging a broad range of fast growing early- stage businesses and selectively guiding them through various stages of their fundraising.
Identification. The first step in engagement is identifying opportunities. We identify potential clients, both entrepreneurs and businesses, through a number of channels:
| ● | Inbound entrepreneur and business inquiries by our existing or past clients of corporate business training and corporate consulting services, which we believe are largely due to the trust on our brand built upon our track record of serving them; |
| ● | Formal and informal networking led by our executive management team and over 10 professionals; and |
| ● | Industry conferences, including those hosted by us, as of December 31, 2025, more than 2,000 attendees have attended our seminars. |
Screening. Upon identifying potential opportunities, we conduct preliminary due diligence and feasibility study on the potential client based on information we gather and our understanding of the industry and capital markets. In this screening stage, we will consider the basic information about the potential client’s business, as well as our potential ability to match the potential client with appropriate investors.
Due diligence. If we consider a potential client worth further consideration, our designated teams, comprised of legal and financial experts with extensive knowledge and expertise in the industry and the market, perform due diligence on the potential client, including their assets and liabilities, share structure, management, development prospect, and business model.
Engagement. If we determine the new opportunity with advisory and capital needs is likely to have success in achieving its goals of fundraising, we will engage them as a client. Once they are engaged, we offer them our comprehensive package of services tailored to address their strategic financial needs, ranging from assistance in the design of business and financial plan, preparation of presentation and documents to deal execution support to chaperone clients throughout the fundraising process.
Our Sales Engagement Approach
Our hardware sales model begins with identifying and engaging SMEs with high potential for AI-driven transformation. We start with the identification process to identify opportunities. We source potential clients through multiple channels:
| - | Inbound inquiries from existing or past clients of our financial consulting and corporate training services, driven by trust in our brand and proven track record. |
| - | Networking efforts led by our executive team and a dedicated group of over 10 professionals, fostering connections with SMEs seeking technological advancements. |
| - | Industry events and seminars, including those hosted by us. |
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Our financing cycle coverage
Our typical financing cycle coverage is illustrated below:
We aim to deliver in-depth corporate information of our clients to their investors/shareholders and to provide our clients with investors’ views and suggestions collected through a series of corporate activities, by way of providing services such as maintenance and development of Public Relations (“PR”) and Investor Relations (“IR”), assist client to arrange for conferences and roadshow meetings.
Our fundraising roadshow services include coordinating and managing the overall logistics of investor presentations to ensure that the investor presentations run smoothly, which allows our clients to concentrate on the marketing aspects of their roadshows. Our roadshow services can be categorized into (i) project management; (ii) logistics arrangements; and (iii) roadshow desk supporting functions.
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Seasonality
The nature of our business does not appear to be affected by seasonal variations.
Intellectual Property
We regard our trademarks, copyrights, patents, domain names, know-how, proprietary technologies, and similar intellectual property as critical to our success, and we rely on copyright, trademark and patent law in PRC, as well as confidentiality procedures and contractual provisions with our employees, contractors and others to protect our proprietary rights.
We develop our curriculum and content with the aim of growing our clients’ capital markets knowledge. To achieve this, we have established a systematic course development and update process that forms a virtuous cycle in producing high-quality seminar course offerings. Our content employs a large number of carefully selected topics. Our own experts designed and produced the content and we have full rights to use and distribute the content in our seminars.
The Company has registered eight (8) copyrights. The following is a list of our approved copyrights materially essential to our business:
| No. | Registration Number | Copyright Name | Copyright Type | Copyright Owner | Country of Registration | Publication Date | Registration Date | |||||||
| 1 | Guozuodengzi- 2021-L-00154580 |
Investment and Financing in a Good Way | Other copyrights | Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. | China | 2019.09.01 | 2021.07.09 | |||||||
| 2 | Guozuodengzi - 2021-L- 00154579 |
Systemic Investment Class of Capital System | Other copyrights | Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. | China | 2019.09.01 | 2021.07.09 | |||||||
| 3 | Guozuodengzi - 2021-L- 00154577 |
The Closed Loop of Premium | Other copyrights | Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. | China | 2019.09.01 | 2021.07.09 | |||||||
| 4 | Guozuodengzi - 2021-F- 00100238 |
Tiancheng Capital Logo | Artwork | Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. | China | 2019.11.01 | 2021.05.08 | |||||||
| 5 | Guozuodengzi - 2021-F- 00100239 |
Tiancheng Capital Logo | Artwork | Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. | China | 2019.11.01 | 2021.05.08 | |||||||
| 6 | Guozuodengzi - 2022-L- 10105498 |
Invitation to Capital Systems Course | Other copyrights | Guangdong Tiancheng Jinhui
Enterprise Development Co., Ltd. |
China | 2022.04.07 | 2022.05.25 | |||||||
| 7 | Guozuodengzi - 2022-F- 10161401 |
Graphics | Artwork | Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. | China | 2022.04.02 | 2022.08.09 | |||||||
| 8 | Guozuodengzi - 2022-F- 10212214 |
Six disciplines for future unicorns | Artwork | Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. | China | 2022.07.22 | 2022.10.24 |
In
addition, the Company has registered 123 trademarks with the following trademark names: 
, 
,
, 
and 
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Competitive Advantages
We believe that the following competitive strengths have contributed to our success and differentiated us from our competitors:
| ● | Highly qualified professional service team with extensive experience in services of corporate training and corporate consulting. |
We launched our corporate consulting services in 2020. Our aim was to assist these Chinese enterprises by filling the gaps and forming a bridge between SMEs in China and potential investors. We have a team of third-party qualified and experienced personnel with legal, regulatory, and financial expertise. Our services are designed to help SMEs in China achieve their goal of becoming public companies. We create a fundraising and/or going public strategy for each client based on many factors, including our assessment of the client’s financial and operational situations, market conditions, and the client’s business and financial requirements. We rely heavily on the expertise of our service providers, including corporate trainers and experts to maintain our core competence. Our experts are professionals in their specialized fields. Our team of consultants consists of professional with an average of five years of industrial experiences.
| ● | Our management team possesses a wide personal and business network, which provides us a valuable source of potential clients. |
Our management team has been selected based on values emphasizing the importance of standardized operations, cohesiveness, continuous learning and performance excellence and places stringent quality control on our services. They strive to keep abreast of the equity market laws and regulations in the PRC. In addition to daily management, our CEO Mr. Xu have also participated in seminars provided by our internal corporate trainers and external experts. Their professional knowledge and views on the trending topics in the PRC helped promote our “Tiancheng” brand.
| ● | Corporate culture committed to client success. |
Named for our primary brand, our corporate culture reflects our employees’ energy, passion and focus on client success. Our culture is widely regarded as one of our greatest assets and is consistently cited as a key differentiator by clients, prospective clients and employees.
| ● | We develop a comprehensive range of services designed to meet the evolving demands of our clients. |
We incorporate our self-developed corporate business training services in the corporate consulting projects carried out by our team, in order to enhance and expand our service offerings to meet the evolving demands from the clients and to capture different market opportunities. For example, we regularly conduct research and studies on the trending topics and commonly raised client enquiries in the capital finance sectors, including but not limited to questions concerning the issuance of new related laws and regulations by the PRC government, in order to provide timely updates to our clients.
| ● | We are able to offer services to clients from a diversified range of industry sectors. |
By keeping abreast of the relevant PRC laws and regulations as well as economic development of the PRC, we are able to assist our clients to react and adapt to the changes through our corporate consulting and advisory and transaction service projects. In addition, in the course of providing services to our clients, we attempt to gain insights as to the actual needs and difficulties that our clients are facing, which would in turn provide us with first-hand experience in our services. We believe that our ability to keep up with the fast-changing business environment in the PRC and our effects to offer updated and timely advice to our clients may provide us with a competitive advantage in capturing growth opportunities in our business.
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| ● | Powerful network effect. |
Our highly complementary organizational structure and diverse service offerings create multiple revenue opportunities. We benefit from an extensive network of client relationships, which not only allows us to deeply understand the diverse needs of SMEs but also provides significant advantages in both procurement and sales. Through close collaboration with clients, we can precisely match high-quality computing power, data collection, and analytics equipment while delivering solutions at competitive prices, thereby enhancing client satisfaction and market competitiveness. Concurrently, the continued growth in attendance at our events drives increased engagement with our corporate consulting and advisory and transaction services. This expanding audience generates a powerful network effect, making our platform increasingly valuable by driving more registrations for participant activities while simultaneously offering participants a broader range of relevant activities to choose from. Furthermore, the growth in our participant base attracts incremental clients who view our resources as an effective medium for marketing their activities and events to a targeted demographic of participants.
| ● | Established long-term cooperative relationships with local chambers of commerce. |
We offer corporate training and seminar tailored for local business needs, helping them to capture the recent equity investment trend and facilitate their decision-making process regarding equity investment opportunity. With the rise of government support funds in China in recent years, we also helped the local business community to cut through the complexities of the funding procedure to unlock substantial financial government benefits and incentives.
Government Regulation
We operate our business in the PRC under a legal regime consisting of the National People’s Congress, which is the country’s highest legislative body, the State Council, which is the highest authority of the executive branch of the PRC central government, and several ministries and agencies under its authority, including the State Administration of Foreign Exchange (“SAFE”), the Ministry of Commerce (“MOFCOM”), the National Development and Reform Commission (“NDRC”), the State Administration for Market Regulation (“SAMR”), formerly known as the State Administration for Industry and Commerce (“SAIC”), the Ministry of Civil Affairs (“MCA”), and their respective authorized local counterparts.
This section sets forth a summary of the most significant rules and regulations that affect our business activities in the PRC.
Regulation Relating to Foreign Investment
All limited liability companies incorporated and operating in the PRC are governed by the Company Law of the People’s Republic of China, or the Company Law, which was amended and promulgated by the Standing Committee of the National People’s Congress on October 26, 2018. However, on December 24, 2021, the Standing Committee of the National People’s Congress issued the Company Law of the People’s Republic of China (Draft for Comments) (the “Draft Revised Company Law”), which was open for public comments until January 22, 2022. The Draft Revised Company Law further stipulates the establishment and withdrawal of the company, the organizational structure and the capital system of the company, and strengthens the responsibilities of shareholders and management personnel and Corporate Social Responsibility. As of the date of this Annual Report, the Draft Revised Company Law has not been promulgated. Foreign invested projects must also comply with the Company Law, with exceptions as specified in foreign investment laws.
With respect to the establishment and operation of wholly foreign-owned projects, or WFOE, the MOFCOM and NDRC, promulgated the Special Administrative Measures for the Access of Foreign Investment (Negative List) (2021 Version) (the “2021 Negative List”) on December 27, 2021, which became effective on January 1, 2022. The 2021 Negative List will replace the Special Administrative Measures for the Access of Foreign Investment (2020 Version) (the “2020 Negative List”) and serve as the main basis for management and guidance for the MOFCOM to manage and supervise foreign investments. Those industries not set out on the 2021 Negative List shall be classified as industries permitted for foreign investment. The negative List is subject to review and update by the PRC government from time to time. None of our businesses are on the 2021 Negative List. Therefore, the Company is able to conduct its business through its wholly owned PRC subsidiary without being subject to restrictions imposed by the foreign investment laws and regulations of the PRC.
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The Foreign Investment Law of the People’s Republic of China (the “Foreign Investment Law”) was adopted by the second meeting of the 13th National People’s Congress on March 15, 2019, which became effective on January 1, 2020. On December 26,2019, the State Council promulgated Regulation for Implementing the Foreign Investment Law of the People’s Republic of China (the “Regulation”), which became effective on January 1, 2020.
The Foreign Investment Law and the Regulation apply the administrative system of pre-establishment national treatment plus negative list to foreign investment and clarify the state shall develop a catalogue of industries for encouraging foreign investment to specify the industries, fields, and regions where foreign investors are encouraged and directed to invest, which refers to the Catalogue of Industries for Guiding Foreign Investment Industries (amended in 2020) (the “Catalogue”). Specifically, the special administrative measures to be implemented are the restricted and prohibited industry categories as well as encouraged industry categories having shareholding and executive management requirements prescribed in the Catalogue (the Special Administrative Measures for the Access of Foreign Investment specified in the Catalogue was replaced by the 2020 Negative List, and the Catalogue of Industries for Encouraged Foreign Investment specified in the Catalogue was replaced by the Catalogue of Industries for Encouraged Foreign Investment (2020 Version).
Regulation Relating to Wholly Foreign-owned Enterprises
The abovementioned Company Law of the People’s Republic of China provides that companies established in the PRC may take the form of company of limited liability or company limited by shares. Each company has the status of a legal person and owns its assets itself. Assets of a company may be used in full for the company’s liability. The Company Law applies to foreign-invested companies unless relevant laws provide otherwise.
The Foreign Investment Law replaced Law of the People’s Republic of China on Wholly Foreign-owned Enterprises. It stipulates that the PRC implements a system of pre-establishment national treatment plus negative list for the administration of foreign investment. Foreign investors are not allowed to invest in fields or sectors prohibited in the market access negative list for foreign investment. Foreign investors that intend to invest in the fields subject to access restrictions stipulated in market access negative list for foreign investment shall satisfy the conditions stipulated in such negative list. The PRC policies supporting enterprise development are equally applicable to foreign-invested enterprises. The PRC does not impose expropriation on foreign investment. Under special circumstances, if it requires imposing expropriation on foreign investment due to the need of public interest, expropriation shall be imposed according to legal procedures, and the foreign-invested enterprises concerned shall receive fair and reasonable compensation. Foreign-invested enterprises can raise funds through public issuance of stocks, corporate bonds and other securities in accordance with the law. Overall, The Foreign Investment Law establishes the clear principle of applying national treatment to FIEs except those engaged in industries on the negative List. Since our current and planned business is not on the 2021 Negative List, to the best of our knowledge, it will not create any material adverse effect to our Company’s business.
Regulations on Offshore Parent Holding Companies’ Direct Investment in and Loans to Their PRC Subsidiary
An offshore company may invest equity in a PRC company, which will become the PRC subsidiary of the offshore holding company after investment. Such equity investment is subject to a series of laws and regulations generally applicable to any foreign-invested enterprise in China, all as amended from time to time, and their respective implementing rules; the Administrative Provisions on Foreign Exchange in Domestic Direct Investment by Foreign Investors; and the Notice of the State Administration on Foreign Exchange on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment. Under the aforesaid laws and regulations, the increase of the registered capital of a foreign-invested enterprise is subject to submission of information to and registration with certain PRC government authorities, including MOFCOM, SAMR, SAFE or their local counterparts. Shareholder loans made by offshore parent holding companies to their PRC subsidiaries are regarded as foreign debts in China for regulatory purpose, which is subject to a number of PRC laws and regulations, including the PRC Foreign Exchange Administration Regulations, the Interim Measures on Administration on Foreign Debts, the Tentative Provisions on the Statistics Monitoring of Foreign Debts and its implementation rules, and the Administration Rules on the Settlement, Sale and Payment of Foreign Exchange. Under these regulations, the shareholder loans made by offshore parent holding companies to their PRC subsidiaries shall be registered with SAFE, or its local counterparts.
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Regulations Relating to Intellectual Property
Copyright
China has adopted comprehensive legislation governing intellectual property rights, including trademarks and copyrights. China is a signatory to the primary international conventions on intellectual property rights and has been a member of the Agreement on Trade Related Aspects of Intellectual Property Rights since its accession to the WTO in December 2001.
In September 1990, the SCNPC promulgated the Copyright Law of the People’s Republic of China, effective in June 1991 and amended in 2001, 2010 and 2020 respectively. The amended Copyright Law extends copyright protection to internet activities, products disseminated over the internet and software products. In addition, there is a voluntary registration system administered by the Copyright Protection Centre of China.
In order to further implement the Computer Software Protection Regulations, promulgated by the State Council in December 2001 and amended in 2011 and 2013 respectively, the National Copyright Administration issued Measures for the Registration of Computer Software Copyright in February 2002, which specify detailed procedures and requirements with respect to the registration of software copyrights.
Trademark
According to the Trademark Law of the People’s Republic of China, promulgated by the SCNPC in August 1982, and amended in 1993, 2001, 2013 and 2019 respectively, the Trademark Office of China National Intellectual Property Administration is responsible for the registration and administration of trademarks and is also responsible for resolving trademark disputes in China. Registered trademarks are valid for ten years from the date the registration is approved. A registrant may apply to renew a registration within twelve months before the expiration date of the registration. If the registrant fails to apply in a timely manner, a grace period of six additional months may be granted. If the registrant fails to apply before the grace period expires, the registered trademark shall be deregistered. Renewed registrations are valid for ten years. In April 2014, the State Council issued the revised Implementing Regulations of the Trademark Law, which specified the requirements of applying for trademark registration and review.
Patent
According to the Patent Law of the People’s Republic of China promulgated by the SCNPC in 1984 and amended in 1992, 2000, 2008 and 2020, respectively, a patentable invention or a utility model must meet three criteria: novelty, inventiveness and practicability. A patent is valid for a twenty-year term for an invention and a ten-year term for a utility model or design, starting from the application date.
Domain Names
In August 2017, the MIIT promulgated the Administrative Measures on Internet Domain Names, or the Domain Name Measures. The Domain Name Measures regulate the registration of domain names, such as the top-level domain name “.cn”. The MIIT is in charge of the administration of PRC internet domain names and the domain name services follow a “first come, first file” principle.
Regulations Relating to Foreign Exchange
Pursuant to the Foreign Exchange Administration Regulations, as amended in August 2008, the RMB is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service- related foreign exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities outside the PRC, unless SAFE’s prior approval is obtained and prior registration with SAFE is made. In May 2013 SAFE promulgated the Circular of the SAFE on Printing and Distributing the Administrative Provision on Foreign Exchange in Domestic Direct Investment by Foreign Investors and Relevant Supporting Documents which provides for and simplifies the operational steps and regulations on foreign exchange matters related to direct investment by foreign investors, including foreign exchange registration, account opening and use, receipt and payment of funds, and settlement and sales of foreign exchange.
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Pursuant to the Circular on Relevant Issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Return Investments Conducted by Domestic Residents through Overseas Special Purpose Vehicles or the SAFE Circular 37, promulgated by SAFE and which became effective on July 4, 2014, (a) a PRC resident shall register with the local SAFE branch before he or she contributes assets or equity interests in an overseas SPV, that is directly established or controlled by the PRC Resident for the purpose of conducting investment or financing; and (b) following the initial registration, the PRC Resident is also required to register with the local SAFE branch for any major change, in respect of the Overseas SPV, including, among other things, a change of the Overseas SPV’s PRC Resident shareholder(s), name of the Overseas SPV, term of operation, or any increase or reduction of the Overseas SPV’s registered capital, share transfer or swap, and merger or division. Pursuant to SAFE Circular 37, failure to comply with these registration procedures may result in penalties.
Pursuant to the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, or the SAFE Notice 13, which was promulgated on February 13, 2015 and with effect from June 1, 2015, the foreign exchange registration under domestic direct investment and the foreign exchange registration under overseas direct investment is directly reviewed and handled by banks in accordance with the SAFE Notice 13, and the SAFE and its branches shall perform indirect regulation over the foreign exchange registration via banks.
Regulation on Foreign Debt
A loan made by a foreign entity as direct or indirect shareholder in a FIE is considered to be foreign debt in China and is regulated by various laws and regulations, including the PRC Foreign Exchange Administration Regulations, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions, and the Administrative Measures for Registration of Foreign Debts. Under these rules and regulations, a shareholder loan in the form of foreign debt made to a PRC entity does not require the prior approval of SAFE. However, such foreign debt must be registered with and recorded by SAFE or its local branches within fifteen (15) business days after entering into the foreign debt contract. Pursuant to these rules and regulations, the maximum amount of the aggregate of (i) the outstanding balance of foreign debts with a term not longer than one year, and (ii) the accumulated amount of foreign debts with a term longer than one year, of a FIE shall not exceed the difference between its registered total investment and its registered capital, or Total Investment and Registered Capital Balance.
On January 12, 2017, the People’s Bank of China, or PBOC, promulgated the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or PBOC Circular 9, which sets forth an upper limit for PRC entities, including FIEs and domestic enterprises, regarding their foreign debts. Pursuant to PBOC Circular 9, the outstanding cross-border financing of an enterprise (the outstanding balance drawn, here and below) shall be calculated using a risk-weighted approach, or Risk-Weighted Approach, and shall not exceed the specified upper limit, namely: risk-weighted outstanding cross-border financing £ the upper limit of risk- weighted outstanding cross-border financing. Risk-weighted outstanding cross-border financing =∑ outstanding amount of RMB and foreign currency denominated cross-border financing * maturity risk conversion factor * type risk conversion factor +∑ outstanding foreign currency denominated cross-border financing * exchange rate risk conversion factor. Maturity risk conversion factor shall be 1 for medium- and long-term cross-border financing with a term of more than one year and 1.5 for short-term cross-border financing with a term of one year or less than one year. Type risk conversion factor shall be 1 for on-balance-sheet financing and 1 for off-balance-sheet financing (contingent liabilities) for the time being. Exchange rate risk conversion factor shall be 0.5. The PBOC Circular 9 further provides that the upper limit of risk-weighted outstanding cross-border financing for enterprises, or Net Asset Limits, shall be 200% of its net assets. The PBOC Circular 9 does not supersede the Interim Provisions on the Management of Foreign Debts, but rather serves as a supplement to it. PBOC Circular 9 provided for a one-year transitional period, or the Transitional Period, from its promulgation date for FIEs, during which period FIEs could choose to calculate their maximum amount of foreign debt based on either (i) the Total Investment and Registered Capital Balance, or (ii) the Risk-Weighted Approach and the Net Asset Limits. Under the PBOC Circular 9, after the Transitional Period ends on January 11, 2018, the PBOC and SAFE will determine the cross-border financing administration mechanism for the foreign-invested enterprises after evaluating the overall implementation of PBOC Circular 9. In addition, according to PBOC Circular 9, a foreign loan must be filed with SAFE through the online filing system of SAFE after the loan agreement is signed and at least three business days prior to the borrower withdraws any amount from such foreign loan.
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Regulations Relating to Dividend Distributions
According to the PRC Company Law and Foreign Investment Law, our PRC subsidiary, as a foreign invested enterprise, or FIE, is required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50% of its registered capital. These reserves are not distributable as cash dividends. Furthermore, under the EIT Law, which became effective in January 2008, the maximum tax rate for the withholding tax imposed on dividend payments from PRC foreign invested companies to their overseas investors that are not regarded as “resident” for tax purposes is 20%. The rate was reduced to 10% under the Implementing Regulations for the EIT Law issued by the State Council. However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding companies, such as tax rate of 5% in the case of Hong Kong companies that holds at least 25% of the equity interests in the foreign-invested enterprise, and certain requirements specified by PRC tax authorities are satisfied.
Regulations Relating to Overseas Listings
On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Administrative Measures”) and relevant supporting guidelines (collectively, the “New Administrative Rules Regarding Overseas Listings”), which came into force since March 31, 2023. The New Administrative Rules Regarding Overseas Listings refine the regulatory system for domestic company’s overseas offering and listing by subjecting both direct and indirect overseas offering and listing activities to the filing-based administration, and clearly defines the circumstances where provisions for direct and indirect overseas offering and listing apply and relevant regulatory requirements.
Under the New Administrative Rules Regarding Overseas Listings, a domestic company is prohibited from overseas offering and listing if any of the following circumstances is involved: (1) where such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (2) where the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (3) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (4) where the domestic company intending to make the securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; and (5) where there are material ownership disputes over equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller. Moreover, a domestic company that seeks to offer and list securities in overseas markets shall abide by certain other regulatory requirements as set out in the New Administrative Rules Regarding Overseas Listings, including without limitation to, compliance with national secrecy, foreign investment, cybersecurity, data security, cross-border investment and financing, foreign exchange, and other laws and relevant provisions.
On February 24, 2023, the CSRC promulgated the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (the “Confidentiality and Archives Administration Provisions”), which also became effective on March 31, 2023. According to the Confidentiality and Archives Administration Provisions, domestic companies that carry out overseas offering and listing (either in direct or indirect means) and the securities companies and securities service providers (either incorporated domestically or overseas) that undertake relevant businesses shall institute a sound confidentiality and archives administration system, and take necessary measures to fulfill confidentiality and archives administration obligations. They shall not leak any state secret and working secret of government agencies, or harm national security and public interest. Therefore, a domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level. Moreover, if documents and materials that, if leaked, will be detrimental to national security or public interest, are involved, the domestic company shall strictly fulfill relevant procedures stipulated by applicable regulations.
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Furthermore, the Confidentiality and Archives Administration Provisions stipulates that a domestic company that provides accounting archives or copies of accounting archives to any entities including securities companies, securities service providers and overseas regulators and individuals shall fulfill due procedures in compliance with applicable regulations. Working papers produced in the Chinese mainland by securities companies and securities service providers in the process of undertaking businesses related to overseas offering and listing by domestic companies shall be retained in the Chinese mainland. Where such documents need to be transferred or transmitted to outside the Chinese mainland, relevant approval procedures stipulated by regulations shall be followed.
In August 2006, six PRC regulatory authorities, including the CSRC, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, amended in June 2009. The M&A Rules, among other things, require that if an overseas company established or controlled by PRC companies or individuals, or PRC Citizens, intends to acquire equity interests or assets of any other PRC domestic company affiliated with the PRC Citizens, such acquisition must be submitted to the MOFCOM for approval. The M&A Rules also require that an Overseas SPV that is controlled by PRC companies or individuals and that has acquired PRC domestic companies’ equities with the SPV’s shares shall obtain CSRC approval prior to publicly listing their securities on an overseas stock exchange.
We believe that our corporate structure and arrangements are not subject to the approval of the CSRC or the MOFCOM under the M&A Rules. However, our PRC legal counsel has further advised us that there are substantial uncertainties as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.
Regulations Relating to Employment
The Labor Law of the People’s Republic of China, or the Labor Law, which became effective in January 1995 and was amended in 2018, and the Employment Contract Law of the People’s Republic of China, or the Employment Contract Law, effective in January 2008 and amended in 2012, require employers to provide written contracts to their employees, restrict the use of temporary workers and aim to give employees long-term job security. Employers must pay their employees’ wages equal to or above local minimum wage standards, establish labor safety and workplace sanitation systems, comply with state labor rules and standards and provide employees with appropriate training on workplace safety. In September 2008, the State Council promulgated the Implementing Regulations for the PRC Employment Contract Law which became effective immediately and interprets and supplements the provisions of the Employment Contract Law.
Under the Labor Contract Law, an employer shall limit the number of dispatched workers so that they do not exceed a certain percentage of its total number of workers. In January 2014, the MOHRSS issued the Interim Provisions on Labor Dispatching, which became effective in March 2014, pursuant to which it provides that the number of dispatched workers used by an employer shall not exceed 10% of the total number of its employees.
The PRC governmental authorities have passed a variety of laws and regulations regarding social insurance and housing funds from time to time, including, among others, the Social Insurance Law of the People’s Republic of China, the Regulation of Insurance for Labor Injury, the Regulations of Insurance for Unemployment, the Provisional Insurance Measures for Maternal Employees, the Interim Regulations Concerning the Collection and Payment of Social Insurance Premiums and the Administrative Regulations on the Housing Provident Fund.
According to the Social Insurance Law of PRC, which issued by the SCNPC on October 28, 2010 and came into effect on July 1, 2011 and was latest revised on December 29, 2018, enterprises and institutions in the PRC shall provide their employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and other welfare plans. The employer shall apply to the local social insurance agency for social insurance registration within 30 days from the date of its formation. And it shall, within 30 days from the date of employment, apply to the social insurance agency for social insurance registration for the employee. Any employer who violates the regulations above shall be ordered to make correction within a prescribed time limit; if the employer fails to rectify within the time limit, the employer and its directly liable person will be fined.
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According to the Administrative Regulations on the Housing Provident Fund, implemented since April 3, 1999 and latest amended on March 24, 2019, any newly established entity shall make deposit registration at the housing accumulation fund management center within 30 days as of its establishment. After that, the entity shall open a housing accumulation fund account for its employees in an entrusted bank. Within 30 days as of the date an employee is recruited, the entity shall make deposit registration at the housing accumulation fund management center and seal up the employee’s housing accumulation fund account in the bank mentioned above within 30 days from termination of the employment relationship. Any entity that fails to make deposit registration of the housing accumulation fund or fails to open a housing accumulation fund account for its employees shall be ordered to complete the relevant procedures within a prescribed time limit. Any entity failing to complete the relevant procedure within the time limit will be fined RMB10,000 to RMB50,000. Any entity fails to make payment of housing provident fund within the time limit or has shortfall in payment of housing provident fund will be ordered to make the payment or make up the shortfall within the prescribed time limit, otherwise, the housing provident management center is entitled to apply for compulsory enforcement with the People’s Court.
Regulations Relating to Consumer Rights Protection
The PRC consumer Rights and Interests Protection Law, or consumer Protection Law, as amended on October 25, 2013 and effective on March 15, 2014, sets out the obligations of business operators and the rights and interests of the consumers. Pursuant to this law, business operators must guarantee that the commodities they sell satisfy the requirements for personal or property safety, provide consumers with authentic information about the commodities, and guarantee the quality, function, usage and term of validity of the commodities. Failure to comply with the consumer Protection Law may subject business operators to civil liabilities such as refunding purchase prices, exchange of commodities, repairing, ceasing damages, compensation, and restoring reputation, and even subject the business operators or the responsible individuals to criminal penalties if business operators commit crimes by infringing the legitimate rights and interests of consumers.
Regulations Relating to Tax in the PRC
Income Tax
The PRC Enterprise Income Tax Law was promulgated in March 2007 and was most recently amended in December 2018. The PRC Enterprise Income Tax Law applies a uniform 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except where tax incentives are granted to special industries and projects. Under the PRC Enterprise Income Tax Law, an enterprise established outside China with “de facto management bodies” within China is considered a “resident enterprise” for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation regulations to the PRC Enterprise Income Tax Law, a “de facto management body” is defined as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise.
In April 2009, the Ministry of Finance and SAT jointly issued the Notice on Issues Concerning Process of Enterprise Income Tax in Enterprise Restructuring Business, or the Circular 59. In December 2009, SAT issued the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises, or the Circular 698. Both Circular 59 and Circular 698 became effective retroactively as of January 2008. In March 2011, SAT issued the Notice on Several Issues Regarding the Income Tax of Non-PRC Resident Enterprises, or the SAT Circular 24, effective in April 2011. By promulgating and implementing these circulars, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident enterprise by a non- resident enterprise.
In February 2015, SAT issued the Notice on Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-PRC Resident Enterprises, or the SAT Circular 7, to supersede existing provisions in relation to the indirect transfer as set forth in Circular 698, while the other provisions of Circular 698 remain in force. SAT Circular 7 introduces a new tax regime that is significantly different from that under Circular 698. SAT Circular 7 extends its tax jurisdiction to capture not only indirect transfers as set forth under Circular 698 but also transactions involving transfer of immovable property in China and assets held under the establishment, and placement in China, of a foreign company through the offshore transfer of a foreign intermediate holding company. SAT Circular 7 also addresses transfer of the equity interest in a foreign intermediate holding company broadly. In addition, SAT Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and introduces safe harbor scenarios applicable to internal group restructurings. However, it also brings challenges to both the foreign transferor and transferee of the indirect transfer as they have to determine whether the transaction should be subject to PRC tax and to file or withhold the PRC tax accordingly. In October 2017, SAT issued the Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or the SAT Circular 37, amended in June 2018. The SAT Circular 37 superseded the Non-resident Enterprises Measures and SAT Circular 698 as a whole and partially amended some provisions in SAT Circular 24 and SAT Circular 7. SAT Circular 37 purports to clarify certain issues in the implementation of the above regime, by providing, among others, the definition of equity transfer income and tax basis, the foreign exchange rate to be used in the calculation of withholding amount, and the date of occurrence of the withholding obligation. Specifically, SAT Circular 37 provides that where the transfer income subject to withholding at source is derived by a non-PRC resident enterprise in installments, the installments may first be treated as recovery of costs of previous investments. Upon recovery of all costs, the tax amount to be withheld must then be computed and withheld.
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Value Added Tax
The PRC Provisional Regulations on Value Added Tax were promulgated by the State Council on December 13, 1993, which became effective on January 1, 1994 and were subsequently amended from time to time. The Detailed Rules for the Implementation of the PRC Provisional Regulations on Value Added Tax (2011 Revision) was promulgated by the Ministry of Finance on December 25, 1993 and subsequently amended on December 15, 2008 and October 28, 2011. On November 19, 2017, the State Council promulgated the Decisions on Abolishing the PRC Provisional Regulations on Business Tax and Amending the PRC Provisional Regulations on Value Added Tax. Pursuant to these regulations, rules and decisions, all enterprises and individuals engaged in sale of goods, provision of processing, repair, and replacement services, sales of services, intangible assets, real property, and the importation of goods within the PRC territory are VAT taxpayers. On March 20, 2019, the Ministry of Finance, the SAT, and the General Administration of Customs jointly issued the Announcement on Relevant Policies on Deepen the Reform of Value Added Tax, according to which for general VAT payers’ sales activities or imports that are subject to VAT at a current applicable rate of 16% or 10%, the applicable VAT rate is adjusted to 13% or 9%, respectively, from April 1, 2019. And according to the Announcement No. 19 of 2023 issued by the Ministry of Finance and State Administration of Taxation, for small-scale VAT taxpayers, the taxable sales revenue subject to a 3% collection rate will be levied at a reduced rate of 1% until December 31, 2027.
Regulations Relating to Leasing Property
Pursuant to the Law of the People’s Republic of China on the Administration of the Urban Real Estate, promulgated by the SCNPC on July 5, 1994 and last amended on August 26, 2019 and effective on January 1, 2020, in the lease of a house, the leaser and the lessee shall conclude a written lease contract defining such matters as the term, purpose and price of the lease, liability for repair, as well as other rights and obligations of both parties. They shall register the lease contract with the department of housing administration for the record. Pursuant to the Administrative Measures on Commodity Housing Leasing, issued by Ministry of Housing and Urban-Rural Development on December 1, 2010 and became effective on February 1, 2011, without the mentioned registration above, the leaser and the lessee may be imposed a fine by the development (real estate) department.
C. Organizational Structure
The following diagram illustrates our corporate structure, including our subsidiaries:
D. Property, Plants and Equipment
Our headquarters and executive offices were located in Guangzhou, China and consist of approximately 1,131.44 square meters (approximately 12,178.72 square feet) of office space under a leases contract with Guangzhou Panyu Energy Saving Science Park Development Co., Ltd, and the lease expired in October 2025.
Our Company has now leased for its office facility, located at 15N, Block B, Zhongzhou Holding Financial Center, Intersection of Houhai Avenue and Haide 1st Road, Shenzhen, China, which consists of approximately 136.65 square meters. Our current lease expires on June 15, 2026.
We lease our facility and do not own any real property.
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Item 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this Annual Report on Form 20-F.
A. Operating results
Overview
We provide a number of business services in China to young and emerging companies including (i) corporate business training services, which mainly focus on advanced knowledge and new perspectives on the capital markets, (ii) corporate consulting services, which mainly focus on various aspects of fundraising, and (iii) advisory and transaction services. Our main clients are entrepreneurs and executives in SMEs in China.
In 2024, we officially launched our IT-solution related device sales business, focusing on providing enterprises with advanced hardware solutions for data collection and analysis.
In 2025, we launched our new business segment offering sales of AI robots with multi-scenario perception and interactive capabilities.
Industry Development and Product Introduction
With the large-scale commercial adoption of artificial intelligence robots in the global market, we are seizing market opportunities to develop new growth drivers for its profitability. Our business in this field is still in the initial exploratory stage. Currently, we are engaged in the procurement and resale of a desktop robot with multi-scenario perception and interactive capabilities.
Current Progress & Future Development
Top KingWin Hi Tech Inc., our U.S. subsidiary, has entered into a sales contract with a certain purchaser, Walker Times International (Hong Kong) Co., Ltd. for sale of an aggregate of 10,000 units of its TK-D2C AI Robots to the Purchaser at a price of $480 per unit for total proceeds of US$4.8 million. We fulfilled 10% of the contracted orders in 2025, and the remaining deliveries are scheduled to be completed by September 2026.
We are preparing plans for the independent research and development and manufacturing of artificial intelligence robots, which will be conducted by Top KingWin Technology Inc., our U.S. subsidiary. Going forward, we will further expand our AI-related businesses. We plan to provide customized software development, technology solutions, and peripheral hardware to clients in China, focusing on fields such as intelligent manufacturing, urban construction, and healthcare industry.
Relevance to Existing Operations
We have built transferable competitive advantages through our existing business, including industry-wide channels and networks, corporate consulting experience, market research expertise, financing experience, and mergers and acquisitions experience. These advantages effectively support the Company’s entry into the artificial intelligence robot industry.
Key Factors that Affect Continuing Operating Results
We believe the following key factors may affect our financial condition and results of continuing operations:
Ability to acquire clients effectively
For our existing business:
Our business success depends on our ability to acquire new clients and retain existing clients. In order to effectively acquire more new clients, we plan to provide more free or low-priced seminars, which we consider an efficient and effective marketing tool for promoting our brand and services to prospective clients due to the large number of attendees in each seminar. After the prospective clients gain some basic knowledge about capital markets and entrepreneurship through our seminars, some of them may be interested in signing up for our higher margin services, such as business consulting services or advisory and transaction services. Due to the ability of promoting our brand and services to a large number of prospective clients through our free or low-priced seminars, we generally do not need to incur significant expenses on other promoting channels. Furthermore, in order to retain existing clients through providing high-quality services, we intend to continue to develop and improve the quality of our courses, especially the fee-paying ones, recruit and retain industry experts, and maintain a strong management team.
In addition to the two above-mentioned strategies to acquire and retain clients, we also rely on the influence of our management team and existing client referrals. Early in our business, in order to acquire new clients, we mainly marketed our services through the influence of our management team, who collectively has a wide personal and business network and provides us a valuable source of potential new clients. In addition, we build our brand over time through high-quality services, and our reputation in the industry has been enhanced through referrals and word of mouth of existing clients. We believe that our services consistently meet or exceed our clients’ expectations, which promotes client acquisition and retention.
If any of the current client acquisition channels becomes less effective, it may affect our cost-effective manner of attracting new clients, converting potential clients to active clients or even lose our existing clients to our competitors. To the extent that our current client acquisition and retention efforts become less effective, our service revenues may be significantly impacted, which would have a significant adverse effect on our revenues, financial condition and results of operations.
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For our sales of devices to support AI data collection and analysis:
As AI applications deepen across various industries, the demand for AI devices and data collection solutions from enterprises is growing. We can leverage this trend to expand our customer base.
Ability to attract and retain our key personnel
For our existing business:
Due to the nature of our business, we heavily rely on the leadership of our directors, officers and our expertise team to maintain our core competence. Our team has remained stable since we started our business in 2019. Under their leadership, our business has achieved rapid expansion and growth since 2019. As our business scope increases, we expect to continue to invest significant resources in hiring and retaining a talent pool of financial consultancy professionals. Our ability to sustain our growth depends on our ability to attract qualified personnel and retain our current staff.
For our sales of devices to support AI data collection and analysis:
Utilize data-driven market analysis to customize exclusive AI solutions for different enterprise clients, thereby increasing customer conversion rates. Enhance potential customer awareness through online content marketing (such as case studies, technical blogs, and AI application guides), and facilitate deal closures through pilot projects or product demonstrations.
Transition to public company status
After our initial public offering, our general and administrative expenses have increased materially in connection with meeting our public company reporting obligations and corporate governance requirements. The increased expenses will include legal, accounting and other professional service fees, insurance premiums, auditing fees, investor relations, shareholders’ meetings, printing and filing fees, share-based compensation expense, as well as employee-related expenses for regulatory compliance and other costs. We are a relatively early- stage company, and therefore our operating costs as a public company are expected to constitute a bigger proportion of revenues and net profit as compared to a larger or more mature company.
A severe or prolonged slowdown in the global or Chinese economy
The demand for advisory and transaction services and corporate consulting services is dependent on the overall economic conditions in China as well as globally. A slowdown in the economy, such as deterioration of overall economic conditions may decrease corporate clients’ desire to expand their business, which in turn may decrease their need for corporate services and therefore affects our operating business performance.
Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024
The following table summarizes the results of our continuing operations during the years ended December 31, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or decrease during such periods.
| Years ended December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| $ | % of Revenues | $ | % of Revenues | |||||||||||||
| REVENUES | 8,038,370 | 100 | % | 3,750,352 | 100 | % | ||||||||||
| COST OF REVENUES | (7,337,991 | ) | (91 | )% | (2,420,802 | ) | (65 | )% | ||||||||
| GROSS PROFIT | 700,379 | 9 | % | 1,329,550 | 35 | % | ||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Selling expenses | (599,741 | ) | (7 | )% | (853,476 | ) | (23 | )% | ||||||||
| General and administrative expenses | (24,344,305 | ) | (303 | )% | (7,606,065 | ) | (203 | )% | ||||||||
| Total operating expenses | (24,944,046 | ) | (310 | )% | (8,459,541 | ) | (226 | )% | ||||||||
| LOSS FROM OPERATIONS | (24,243,667 | ) | (302 | )% | (7,129,991 | ) | (190 | )% | ||||||||
| OTHER INCOME, NET | ||||||||||||||||
| Other income | 1,576,795 | 20 | % | 92,308 | 2 | % | ||||||||||
| Other expense | (1,353,845 | ) | (17 | )% | (1,054,377 | ) | (28 | )% | ||||||||
| Total other (expense) income, net | 222,950 | 3 | % | (962,069 | ) | (26 | )% | |||||||||
| NET LOSS BEFORE INCOME TAXES | (24,020,717 | ) | (299 | )% | (8,092,060 | ) | (216 | )% | ||||||||
| Income tax expenses | - | - | % | (54,531 | ) | (1 | )% | |||||||||
| NET LOSS FROM CONTINUING OPERATIONS | (24,020,717 | ) | (299 | )% | (8,146,591 | ) | (218 | )% | ||||||||
| NET LOSS FROM DISCONTINUED OPERATIONS | - | - | % | (532,698 | ) | (14 | )% | |||||||||
| OTHER COMPREHENSIVE LOSS | ||||||||||||||||
| Foreign currency translation loss | 32,724 | - | (48,655 | ) | (1 | )% | ||||||||||
| TOTAL COMPREHENSIVE LOSS | (23,987,993 | ) | (298 | )% | (8,727,944 | ) | (233 | )% | ||||||||
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Revenues
The following table presents revenues by service categories for the year ended December 31, 2025 and 2024, respectively:
| Years ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||
| Service Category | $ | % of revenues | $ | % of revenues | $ | % | ||||||||||||||||||
| Advisory and transaction services | 122,990 | 2 | % | 405,308 | 9 | % | (282,318 | ) | (70 | )% | ||||||||||||||
| Corporate business training services | 419,788 | 5 | % | 1,051,870 | 23 | % | (632,082 | ) | (60 | )% | ||||||||||||||
| Corporate consulting services from continued operations | 123,800 | 2 | % | 484,563 | 11 | % | (360,763 | ) | (74 | )% | ||||||||||||||
| Revenues from sales of devices to support AI data collection and analysis | 6,676,426 | 83 | % | 1,561,467 | 35 | % | 5,114,959 | 328 | % | |||||||||||||||
| Revenue from sales of robots | 480,000 | 6 | % | - | - | 480,000 | - | |||||||||||||||||
| Others | 215,366 | 2 | % | 247,144 | 6 | % | (31,778 | ) | (13 | )% | ||||||||||||||
| Total revenues from continuing operations | 8,038,370 | 100 | % | 3,750,352 | 84 | % | 4,288,018 | 114 | % | |||||||||||||||
| Total revenues from discontinued operations | - | - | % | 724,338 | 16 | % | (724,338 | ) | (100 | )% | ||||||||||||||
| Total revenues | 8,038,370 | 100 | % | 4,474,690 | 100 | % | 3,563,680 | 80 | % | |||||||||||||||
Our revenues increased by 80%, or $3,563,680, from $4,474,690 in 2024 to $8,038,370 in 2025. This growth was primarily driven by a significant increase in sales of artificial intelligence, which grew by 358% compared to the prior year.
Revenues from advisory and transaction services
Revenues from advisory and transaction services declined from $405,308, or 9% of total revenues, in 2024 to $122,990, or 2% of total revenues, in 2025. This decrease was primarily attributable to the downturn in the real estate market, which has contributed to a broader economic slowdown in China. As a result, weakened market dynamics have led to a decline in demand for our advisory and transaction services.
Revenues from corporate business training services
Revenues from corporate business training services accounted for $419,788 or 5% of total revenues for the year ended December 31, 2025, compared to $1,051,870 or 23% of total revenues for the year ended December 31, 2024. This year, due to the economic downturn, businesses and individuals have become more cautious with their spending on professional training. Additionally, the rise of social media platforms such as TikTok and Xiaohongshu has accelerated knowledge sharing and facilitated the emergence of numerous personal brands. These individual influencers have created a highly competitive environment by offering online training programs at lower prices, while our business remains primarily offline, with higher operational costs and, consequently, higher pricing. These factors have contributed to a significant decline in revenue from our business training services.
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Revenues from corporate consulting services
We provide consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate governance, leadership training, share structure consulting services, and more. The consulting services are adapted to each client’s specific needs.
Revenues from corporate consulting services from continuing operations decreased by $360,763, or 74%, from $484,563 for the year ended December 31, 2024, to $123,800 for the year ended December 31, 2025. The primary reasons are the contraction of traditional businesses. For instance, strategy, management, and operations consulting have experienced the most significant declines. On the other hand, emerging demand has failed to fill the resulting gap. Although AI consulting, data governance, and compliance consulting have achieved growth, their scale is insufficient to offset the declines in traditional businesses.
Revenues from sales of devices to support AI data collection and analysis
Revenues from sales of devices to support AI data collection and analysis accounted for $ 6,676,426 or 83% of total revenues for the year ended December 31, 2025, compared to $1,561,467 or 35% of total revenues for the year ended December 31, 2024. This year, due to the surging market demand for artificial intelligence infrastructure and data-driven decision-making, enterprises across industries have significantly increased their investment in AI-enabling hardware, data collection tools, and analytical devices. Many organizations accelerated their digital transformation and AI adoption strategies in 2025, driving robust growth in purchases of devices dedicated to AI data acquisition and analysis. Meanwhile, the Company optimized its product portfolio and strengthened its go-to-market strategy for AI-related hardware solutions, which further boosted sales volumes and corresponding revenue from this product line.
Revenues from Sales of Robots
For the fiscal year ended December 31, 2025, approximately 6% of our total revenues, amounting to $480,000, was generated from our robots sales business. This segment focuses on multi-scenario perceptual interaction AI robots.
In 2025, we launched a new business segment selling AI robots. As of December 31, 2025, it recognized $480,000 in revenue from the sale of AI robots. This revenue stemmed from a contract signed on September 22, 2025, by the subsidiary, Top Kingwin Hi Tech Inc., with Walker Times International (Hong Kong) Co., Ltd., covering 10,000 units at $480 each, for total proceeds of $4.8 million. Deliveries began in October 2025. By year-end, 1,000 units had been delivered, representing 10% of the total contracted quantity. Remaining revenue will be recognized upon future delivery.
Revenues from others
Revenue from others is mainly derived from some incidental revenue. Others decreased by $31,778 or 13% from $247,144 for the year ended December 31, 2024 to $215,366 for the year ended December 31, 2025.
Cost of revenues
The following table presents cost of revenue by service categories for the years ended December 31, 2025 and 2024, respectively:
| Years ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||
| Service Category | $ | % of cost | $ | % of cost | $ | % | ||||||||||||||||||
| Advisory and transaction services * | - | 0 | % | - | - | % | - | N/A | % | |||||||||||||||
| Corporate business training services | 234,609 | 3 | % | 500,140 | 16 | % | (265,531 | ) | (53 | )% | ||||||||||||||
| Corporate consulting services | 37,707 | 1 | % | 303,700 | 10 | % | (265,993 | ) | (88 | )% | ||||||||||||||
| Cost of goods sold from sales of devices to support AI data collection and analysis | 6,651,963 | 91 | % | 1,555,730 | 48 | % | 5,096,233 | 328 | % | |||||||||||||||
| Cost of goods sold from sales of robots | 380,000 | 5 | % | - | - | 380,000 | - | |||||||||||||||||
| Others * | 33,712 | - | % | 61,232 | 2 | % | (27,520 | ) | (45 | )% | ||||||||||||||
| Total costs from continuing operations | 7,337,991 | 100 | % | 2,420,802 | 76 | % | 4,917,189 | 203 | % | |||||||||||||||
| Total costs from discontinuing operations | - | - | % | 752,831 | 24 | % | (752,831 | ) | (100 | )% | ||||||||||||||
| Total cost | 7,337,991 | 100 | % | 3,173,633 | 100 | % | 4,164,358 | 131 | % | |||||||||||||||
| * | Revenues from advisory and transaction and other services are recognized on net basis. |
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Our service costs primarily include (1) referral fees paid to referral and marketing service companies for the recommendation of potential clients, (2) service fees paid to service providers for report editing, due diligence and, (3) commission fees of service personnel paid to third parties and the Company’s staff.
Cost of revenues for the year ended December 31, 2025 was $7,337,991, an increase of $4,164,358, or 131%, from $3,173,633 for the year ended December 31, 2024. The increase in cost of revenue was in line with the increase in cost of revenues from sales of AI related devices.
The following table shows different categories of services we provided for the year ended December 31, 2025 in USD:
| Service category | Advisory and transaction services | Corporate business training services | Corporate consulting services | sales of devices to support AI data collection and analysis | Revenue from sales of robots | Others | Total | |||||||||||||||||||||
| Revenue | 122,990 | 419,788 | 123,800 | 6,676,426 | 480,000 | 215,366 | 8,038,370 | |||||||||||||||||||||
| % of revenue | 2 | % | 5 | % | 2 | % | 83 | % | 6 | % | 2 | % | 100 | % | ||||||||||||||
| Cost of revenue | - | 234,609 | 37,707 | 6,651,963 | 380,000 | 33,712 | 7,337,991 | |||||||||||||||||||||
| % of cost | - | % | 3 | % | 1 | % | 91 | % | 5 | % | - | % | 100 | % | ||||||||||||||
| Gross profit | 122,990 | 185,179 | 86,093 | 24,463 | 100,000 | 181,654 | 700,379 | |||||||||||||||||||||
| Gross margin | 100 | % | 44 | % | 70 | % | - | % | 21 | % | 84 | % | 9 | % | ||||||||||||||
The following table shows different categories of services we provided for the year ended December 31, 2024 in USD, including continuing and discontinued operations:
| Service category | Advisory and transaction services | Corporate business training services | Corporate consulting services | sales of devices to support AI data collection and analysis | Revenue from sales of robots | Others | Total | |||||||||||||||||||||
| Revenue | 405,308 | 1,051,870 | 1,208,901 | 1,561,467 | - | 247,144 | 4,474,690 | |||||||||||||||||||||
| % of revenue | 9 | % | 23 | % | 27 | % | 35 | % | - | 6 | % | 100 | % | |||||||||||||||
| Cost of revenue | - | 500,140 | 1,056,531 | 1,555,730 | - | 61,232 | 3,173,633 | |||||||||||||||||||||
| % of cost | - | % | 16 | % | 34 | % | 48 | % | - | 2 | % | 100 | % | |||||||||||||||
| Gross profit | 405,308 | 551,730 | 152,370 | 5,737 | - | 185,912 | 1,301,057 | |||||||||||||||||||||
| Gross margin | 100 | % | 52 | % | 13 | % | - | % | - | 75 | % | 29 | % | |||||||||||||||
Our gross profit from continuing operations was $700,379, with gross margins of 9% and 29% for the years ended December 31, 2025 and 2024, respectively. The overall gross profit margin decreased by 20 percentage points, which was driven the reduction in revenue generated from corporate business training services and advisory and transaction services.
Operating expenses
The following table sets forth the breakdown of our operating expenses for the years ended December 31, 2025 and 2024:
| Years ended December 31, | Change | |||||||||||||||||||||||
| 2025 | % | 2024 | % | Amount | % | |||||||||||||||||||
| Selling expenses | $ | 599,741 | 2 | % | $ | 853,476 | 9 | % | $ | (253,735 | ) | (30 | )% | |||||||||||
| General and administrative expenses | 24,344,305 | 98 | % | 7,606,065 | 87 | % | 16,738,240 | 220 | % | |||||||||||||||
| Total operating expenses from continuing operations | 24,944,046 | 100 | % | 8,459,541 | 96 | % | 16,484,505 | 195 | % | |||||||||||||||
| Total operating expenses from discontinued operations | - | - | % | 326,716 | 4 | % | (326,716 | ) | (100 | )% | ||||||||||||||
| Total operating expenses | $ | 24,944,046 | 100 | % | $ | 8,786,257 | 100 | % | $ | 16,157,789 | 184 | % | ||||||||||||
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Selling expenses
| Years ended December 31, | ||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||
| $ | $ | $ | % | |||||||||||||
| Salary and welfare | 177,327 | 455,891 | (278,564 | ) | (61 | )% | ||||||||||
| Conference fee | 381,027 | 283,132 | 97,895 | 35 | % | |||||||||||
| Travel and transportation | 34,540 | 17,030 | 17,510 | 103 | % | |||||||||||
| Entertainment | 5,686 | 18,273 | (12,587 | ) | (69 | )% | ||||||||||
| Others | 1,161 | 79,150 | (77,989 | ) | (99 | )% | ||||||||||
| Total selling expenses from continuing operations | 599,741 | 853,476 | (253,735 | ) | (30 | )% | ||||||||||
| Total selling expenses from discontinued operations | - | 61,243 | (61,243 | ) | (100 | )% | ||||||||||
| Total selling expenses | 599,741 | 914,719 | (314,978 | ) | (34 | )% | ||||||||||
Our selling expenses decreased by $314,978, or 34%, from $914,719 for the year ended December 31, 2024, to $599,741 for the year ended December 31, 2025. This decline was primarily driven by strategic adjustments to our personnel structure, including the implementation of a workforce reduction plan. As a result, total salaries related to sales personnel decreased from $455,891 in 2024 to $177,327 in 2025, representing a reduction of $278,564 or 61%. Moving forward, we will continue to optimize selling expenses to improve overall efficiency.
General and administrative expenses
| Years ended December 31, | ||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||
| $ | $ | $ | % | |||||||||||||
| Salary and welfare | 710,831 | 1,188,399 | (477,568 | ) | (40 | )% | ||||||||||
| Rental and property management fee | 379,837 | 281,565 | 98,272 | 35 | % | |||||||||||
| Legal and professional fees | 1,161,875 | 1,169,413 | (7,538 | ) | (1 | )% | ||||||||||
| Office expense | 16,169 | 49,029 | (32,860 | ) | (67 | )% | ||||||||||
| Depreciation and amortization | 84,241 | 90,629 | (6,388 | ) | (7 | )% | ||||||||||
| Loss from impairment of Goodwill | - | 2,973,850 | (2,973,850 | ) | (100 | )% | ||||||||||
| Share-based compensation expenses | 3,381,800 | 1,773,300 | 1,608,500 | 91 | % | |||||||||||
| Provision for doubtful accounts | 18,579,941 | 55,966 | 18,523,975 | 33,099 | % | |||||||||||
| Others | 29,611 | 23,914 | 5,697 | 24 | % | |||||||||||
| Total general and administrative expenses from continuing operations | 24,344,305 | 7,606,065 | 16,738,240 | 220 | % | |||||||||||
| Total general and administrative expenses from discontinued operations | - | 265,473 | (265,473 | ) | (100 | )% | ||||||||||
| Total general and administrative expenses | 24,344,305 | 7,871,538 | 16,472,767 | 209 | % | |||||||||||
Our general and administrative expenses increased by $16,472,767, or 209%, from $7,871,538 for the year ended December 31, 2024, to $24,344,305 for the year ended December 31, 2025. This significant increase was primarily driven by several key factors.
First, we recorded a substantial provision for advances to suppliers of $18,579,941 in 2025, which was not accrued in the prior year. This provision was recognized to address rising credit risk and delayed deliveries by suppliers amid ongoing industry headwinds and macroeconomic uncertainty. Concurrently, we strengthened our management of advances to suppliers and performed a comprehensive impairment assessment on outstanding balances.
Second, our share-based compensation expenses rose sharply by $1,608,500, or 91%, from $1,773,300 in 2024 to $3,381,800 in 2025. This increase was mainly due to the expansion of our equity incentive plan, including the grant of new stock options and restricted stock units to core employees and management, to retain key talent and align their interests with long-term shareholder value creation.
Third, our rental and property management fee increased by $98,272, or 35%, from $281,565 in 2024 to $379,837 in 2025, primarily attributable to the expansion of our office space to support business growth and the renewal of lease agreements at adjusted market rates.
Partially offsetting these increases were significant cost reduction initiatives across multiple operating expense categories. Our salary and welfare expenses decreased by $477,568, or 40%, from $1,188,399 in 2024 to $710,831 in 2025, driven by workforce optimization and operational efficiency improvements. Office expenses fell by $32,860, or 67%, from $49,029 to $16,169. Additionally, the 2024 goodwill impairment loss of $2,973,850 and discontinued operations expenses of $265,473 were not incurred in 2025, further mitigating the overall expense growth.
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Overall, while certain strategic and regulatory costs led to a substantial increase in general and administrative expenses, we remain committed to optimizing our cost structure and improving operational efficiency to support long-term business growth.
Other income and expenses
Total net other income were $222,950 for the year ended December 31, 2025, compared to net other expenses of $962,069 for the year ended December 31, 2024. This change was primarily due to foreign exchange gain of $1,569,106.
Income tax expense
BVI
We are not subject to any income tax in the BVI.
Hong Kong
We are not subject to any income tax in Hong Kong.
PRC
We are not subject to any income tax in PRC for the year ended December 31, 2025. Our income tax expense including those from continuing and discontinued operations, were $54,531 for the year ended December 31, 2024.
Net Loss
As a result of the foregoing, we reported a net loss of $24,020,717 for the year ended December 31, 2025, compared to a net loss of $8,679,289 in 2024.
B. Liquidity and Capital Resources
As of December 31, 2025, our cash and restricted cash amounted to $13,085,466, compared to $2,814,010 as of December 31, 2024.
We believe that our working capital is at a positive position and sufficient to meet our operation requirement in the next 12 months from the financial statements’ issuance date. It is mainly contributed from (1) our current position of cash, (2) cash flows provided by financial activities.
A majority of our revenues were derived in China, and a majority of our operations are conducted in China through our PRC subsidiaries. As of December 31, 2025, 2% of our cash was held in China to meet the needs of our daily operations, and the remaining 98% of our cash was held overseas.
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Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023
The following table summarizes the results of our continuing operations during the years ended December 31, 2024 and 2023, respectively, and provides information regarding the dollar and percentage increase or decrease during such periods.
| Years ended December 31, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| $ | % of Revenues | $ | % of Revenues | |||||||||||||
| REVENUES | 3,750,352 | 100 | % | 5,447,879 | 100 | % | ||||||||||
| COST OF REVENUES | (2,420,802 | ) | (65 | )% | (1,858,523 | ) | (34 | )% | ||||||||
| GROSS PROFIT | 1,329,550 | 35 | % | 3,589,356 | 66 | % | ||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Selling expenses | (853,476 | ) | (23 | )% | (2,480,974 | ) | (46 | )% | ||||||||
| General and administrative expenses | (7,606,065 | ) | (203 | )% | (3,595,701 | ) | (66 | )% | ||||||||
| Total operating expenses | (8,459,541 | ) | (226 | )% | (6,076,675 | ) | (112 | )% | ||||||||
| LOSS FROM OPERATIONS | (7,129,991 | ) | (190 | )% | (2,487,319 | ) | (46 | )% | ||||||||
| OTHER INCOME, NET | ||||||||||||||||
| Other income | 92,308 | 2 | % | 68,905 | 1 | % | ||||||||||
| Other expense | (1,054,377 | ) | (28 | )% | (18,791 | ) | - | |||||||||
| Total other (expense) income, net | (962,069 | ) | (26 | )% | 50,114 | 1 | % | |||||||||
| NET LOSS BEFORE INCOME TAXES | (8,092,060 | ) | (216 | )% | (2,437,205 | ) | (45 | )% | ||||||||
| Income tax expenses | (54,531 | ) | (1 | )% | (115,094 | ) | (2 | )% | ||||||||
| NET LOSS FROM CONTINUING OPERATIONS | (8,146,591 | ) | (218 | )% | (2,552,299 | ) | (47 | )% | ||||||||
| NET LOSS FROM DISCONTINUED OPERATIONS | (532,698 | ) | (14 | )% | 4,631 | - | ||||||||||
| OTHER COMPREHENSIVE LOSS | ||||||||||||||||
| Foreign currency translation loss | (48,655 | ) | (1 | )% | (86,942 | ) | (2 | )% | ||||||||
| TOTAL COMPREHENSIVE LOSS | (8,727,944 | ) | (233 | )% | (2,634,610 | ) | (48 | )% | ||||||||
Revenues
The following table presents revenues by service categories for the year ended December 31, 2024 and 2023, respectively:
| Years ended December 31, | ||||||||||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||||||||||
| Service Category | $ | % of revenues | $ | % of revenues | $ | % | ||||||||||||||||||
| Advisory and transaction services | 405,308 | 9 | % | 1,890,814 | 35 | % | (1,485,506 | ) | (79 | )% | ||||||||||||||
| Corporate business training services | 1,051,870 | 23 | % | 3,232,486 | 59 | % | (2,180,616 | ) | (67 | )% | ||||||||||||||
| Corporate consulting services from continued operations | 484,563 | 11 | % | 320,930 | 6 | % | 163,633 | 51 | % | |||||||||||||||
| Revenues from sales of devices to support AI data collection and analysis | 1,561,467 | 35 | % | - | - | % | 1,561,467 | - | ||||||||||||||||
| Others | 247,144 | 6 | % | 3,649 | - | % | 243,495 | 6,673 | % | |||||||||||||||
| Total revenues from continuing operations | 3,750,352 | 84 | % | 5,447,879 | 100 | % | (1,697,527 | ) | (31 | )% | ||||||||||||||
| Total revenues from discontinued operations | 724,338 | 16 | % | 5,362 | - | 718,976 | 13,409 | % | ||||||||||||||||
| Total revenues | 4,474,690 | 100 | % | 5,453,241 | 100 | % | (978,551 | ) | (18 | )% | ||||||||||||||
Our revenues decreased by 18%, or $978,551, from $5,453,241 in 2023 to $4,474,690 in 2024. This decline was primarily driven by a significant reduction in revenue from corporate business training services and advisory and transaction services, which contracted by 67%, and 79%, compared to the prior year. However, this decline was primarily offset by strong growth in sales of artificial intelligence and corporate consulting services.
Revenues from advisory and transaction services
Revenues from advisory and transaction services declined from $1,890,814, or 35% of total revenues, in 2023 to $405,308, or 9% of total revenues, in 2024. This decrease was primarily attributable to the downturn in the real estate market, which has contributed to a broader economic slowdown in China. As a result, weakened market dynamics have led to a decline in demand for our advisory and transaction services.
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Revenues from corporate business training services
Revenues from corporate business training services accounted for $3,232,486 or 59% of total revenues for the year ended December 31, 2023, compared to $1,051,870 or 23% of total revenues for the year ended December 31, 2024. This year, due to the economic downturn, businesses and individuals have become more cautious with their spending on professional training. Additionally, the rise of social media platforms such as TikTok and Xiaohongshu has accelerated knowledge sharing and facilitated the emergence of numerous personal brands. These individual influencers have created a highly competitive environment by offering online training programs at lower prices, while our business remains primarily offline, with higher operational costs and, consequently, higher pricing. These factors have contributed to a significant decline in revenue from our business training services.
Revenues from corporate consulting services
We provide consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate governance, leadership training, share structure consulting services, and more. The consulting services are adapted to each client’s specific needs.
Revenues from corporate consulting services from continuing operations increased by $163,633, or 51%, from $320,930 for the year ended December 31, 2023, to $484,563 for the year ended December 31, 2024. This growth was primarily driven by the booming AI industry, which has generated strong market demand. As AI-related technologies rapidly evolve and attract increasing investment, many small and medium-sized enterprises have sought professional guidance on integrating AI into their business models, optimizing corporate structures, and navigating regulatory challenges. The market’s enthusiastic response to AI innovation has led to a significant increase in consulting engagements, driving our revenue growth in this sector.
Total revenues from discontinued operations created $724,338, or 16% of total revenues for the year ended December 31, 2024. The discontinued operations provide consulting services to small and medium-sized enterprises or government authorities to develop strategies and solutions for the following: corporate governance, leadership and risk control. The discontinued operations were acquired on December 21, 2023—less than one month before the 2023 year-end. As a result, revenue and related costs increased sharply in the twelve months ended December 31, 2024, compared to the prior period.
Revenues from sales of devices to support AI data collection and analysis
This year, we expanded into the AI equipment sales sector and achieved significant progress. Revenue from AI equipment sales reached $1,561,467, accounting for 35% of total revenues. We anticipate that, with the continued momentum of the AI industry, our AI-related revenue will maintain steady growth in the future.
Revenues from others
Revenue from others is mainly derived from some incidental revenue. Others increased by $243,495 or 6,673% from $3,649 for the year ended December 31, 2023 to $247,144 for the year ended December 31, 2024.
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Cost of revenues
The following table presents cost of revenue by service categories for the years ended December 31, 2024 and 2023, respectively:
| Years ended December 31, | ||||||||||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||||||||||
| Service Category | $ | % of cost | $ | % of cost | $ | % | ||||||||||||||||||
| Advisory and transaction services * | - | - | % | - | - | % | - | - | % | |||||||||||||||
| Corporate business training services | 500,140 | 16 | % | 1,626,238 | 87 | % | (1,126,098 | ) | (69 | )% | ||||||||||||||
| Corporate consulting services | 303,700 | 10 | % | 232,229 | 13 | % | 71,471 | 31 | % | |||||||||||||||
| Cost of goods sold from sales of devices to support AI data collection and analysis | 1,555,730 | 48 | % | - | - | % | 1,555,730 | - | % | |||||||||||||||
| Others * | 61,232 | 2 | % | 56 | - | % | 61,176 | 109,243 | % | |||||||||||||||
| Total costs from continuing operations | 2,420,802 | 76 | % | 1,858,523 | 100 | % | 562,279 | 30 | % | |||||||||||||||
| Total costs from discontinuing operations | 752,831 | 24 | % | 9,177 | - | % | 743,654 | 8,103 | % | |||||||||||||||
| Total cost | 3,173,633 | 100 | % | 1,867,700 | 100 | % | 1,305,933 | 70 | % | |||||||||||||||
| * | Revenues from advisory and transaction and other services are recognized on net basis. |
Our service costs primarily include (1) referral fees paid to referral and marketing service companies for the recommendation of potential clients, (2) service fees paid to service providers for report editing, due diligence and, (3) commission fees of service personnel paid to third parties and the Company’s staff.
Cost of revenues for the year ended December 31, 2024 was $3,173,633, an increase of $1,305,933, or 70%, from $1,867,700 for the year ended December 31, 2023. The increase in cost of revenue was in line with the increase in cost of revenues from sales of AI related devices.
The following table shows different categories of services we provided for the year ended December 31, 2024 in USD, including continuing and discontinued operations:
| Service category | Advisory and transaction services | Corporate business training services | Corporate consulting services | sales of devices to support AI data collection and analysis | Others | Total | ||||||||||||||||||
| Revenue | 405,308 | 1,051,870 | 1,208,901 | 1,561,467 | 247,144 | 4,474,690 | ||||||||||||||||||
| % of revenue | 9 | % | 23 | % | 27 | % | 35 | % | 6 | % | 100 | % | ||||||||||||
| Cost of revenue | - | 500,140 | 1,056,531 | 1,555,730 | 61,232 | 3,173,633 | ||||||||||||||||||
| % of cost | - | % | 16 | % | 34 | % | 48 | % | 2 | % | 100 | % | ||||||||||||
| Gross profit | 405,308 | 551,730 | 152,370 | 5,737 | 185,912 | 1,301,057 | ||||||||||||||||||
| Gross margin | 100 | % | 52 | % | 13 | % | - | % | 75 | % | 29 | % | ||||||||||||
The following table shows different categories of services we provided for the year ended December 31, 2023 in USD, including continuing and discontinued operations:
| Service category | Advisory and transaction services | Corporate business training services | Corporate consulting services | Others | Total | |||||||||||||||
| Revenue | 1,890,814 | 3,232,486 | 326,292 | 3,649 | 5,453,241 | |||||||||||||||
| % of revenue | 35 | % | 59 | % | 6 | % | - | % | 100 | % | ||||||||||
| Cost of revenue | - | 1,626,238 | 241,406 | 56 | 1,867,700 | |||||||||||||||
| % of cost | - | % | 87 | % | 13 | % | - | % | 100 | % | ||||||||||
| Gross profit | 1,890,814 | 1,606,248 | 84,886 | 3,593 | 3,585,541 | |||||||||||||||
| Gross margin | 100 | % | 50 | % | 26 | % | 98 | % | 66 | % | ||||||||||
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We had gross profit from continuing and discontinued operations were $1,301,057 and $3,585,541 with gross margins of 29% and 66% for the years ended December 31, 2024 and 2023, respectively. The overall gross profit margin decreased by 37%, which was driven the reduction of revenue generated from corporate business training services and advisory and transaction services, offset by the increase of revenue generated from corporate business consulting services.
Operating expenses
The following table sets forth the breakdown of our operating expenses for the years ended December 31, 2024 and 2023:
| Years ended December 31, | Change | |||||||||||||||||||||||
| 2024 | % | 2023 | % | Amount | % | |||||||||||||||||||
| Selling expenses | $ | 853,476 | 9 | % | $ | 2,480,974 | 41 | % | $ | (1,627,498 | ) | (66 | )% | |||||||||||
| General and administrative expenses | 7,606,065 | 87 | % | 3,595,701 | 59 | % | 4,010,364 | 112 | % | |||||||||||||||
| Total operating expenses from continuing operations | 8,459,541 | 96 | % | 6,076,675 | 100 | % | 2,382,866 | 39 | % | |||||||||||||||
| Total operating expenses from discontinued operations | 326,716 | 4 | % | 223 | - | 326,493 | 146,409 | % | ||||||||||||||||
| Total operating expenses | $ | 8,786,257 | 100 | % | $ | 6,076,898 | 100 | % | $ | 2,709,359 | 45 | % | ||||||||||||
Selling expenses
| Years ended December 31, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| $ | $ | $ | % | |||||||||||||
| Salary and welfare | 455,891 | 1,250,291 | (794,400 | ) | (64 | )% | ||||||||||
| Conference fee | 283,132 | 1,021,668 | (738,536 | ) | (72 | )% | ||||||||||
| Travel and transportation | 17,030 | 163,298 | (146,268 | ) | (90 | )% | ||||||||||
| Entertainment | 18,273 | 33,812 | (15,539 | ) | (46 | )% | ||||||||||
| Others | 79,150 | 11,905 | 67,245 | 565 | % | |||||||||||
| Total selling expenses from continuing operations | 853,476 | 2,480,974 | (1,627,498 | ) | (66 | )% | ||||||||||
| Total selling expenses from discontinued operations | 61,243 | 156 | 61,087 | 39,158 | % | |||||||||||
| Total selling expenses | 914,719 | 2,481,130 | (1,566,411 | ) | (63 | )% | ||||||||||
Our selling expenses decreased by $1,566,411, or 63%, from $2,481,130 for the year ended December 31, 2023, to $914,719 for the year ended December 31, 2024. This decline was primarily driven by strategic adjustments to our personnel structure, including the implementation of a workforce reduction plan. As a result, total salaries related to sales personnel decreased from $1,250,291 in 2023 to $455,891 in 2024, representing a reduction of $794,400 or 64%. Additionally, due to the increasing shift towards online education and training, which has impacted the demand for offline training programs, our conference expenses associated with in-person training events declined from $1,021,668 in 2023 to $283,132 in 2024, representing a decrease of $738,536 or 72%. Moving forward, we will continue to optimize selling expenses to improve overall efficiency.
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General and administrative expenses
| Years ended December 31, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| $ | $ | $ | % | |||||||||||||
| Salary and welfare | 1,188,399 | 1,594,505 | (406,106 | ) | (25 | )% | ||||||||||
| Rental and property management fee | 281,565 | 231,036 | 50,529 | 22 | % | |||||||||||
| Legal and professional fees | 1,169,413 | 119,336 | 1,050,077 | 880 | % | |||||||||||
| Office expense | 49,029 | 113,262 | (64,233 | ) | (57 | )% | ||||||||||
| Depreciation and amortization | 90,629 | 79,388 | 11,241 | 14 | % | |||||||||||
| Loss from impairment of Goodwill | 2,973,850 | - | 2,973,850 | - | % | |||||||||||
| Share-based compensation expenses | 1,773,300 | - | 1,773,300 | - | % | |||||||||||
| Others | 79,880 | 1,458,174 | (1,378,294 | ) | (95 | )% | ||||||||||
| Total general and administrative expenses from continuing operations | 7,606,065 | 3,595,701 | 4,010,364 | 112 | % | |||||||||||
| Total general and administrative expenses from discontinued operations | 265,473 | 67 | 265,406 | 395,721 | % | |||||||||||
| Total general and administrative expenses | 7,871,538 | 3,595,768 | 4,275,770 | 119 | % | |||||||||||
Our general and administrative expenses increased by $4,275,770, or 119%, from $3,595,768 for the year ended December 31, 2023, to $7,871,538 for the year ended December 31, 2024. This significant increase was primarily driven by several key factors. Our legal and professional fees rose sharply by $1,050,077, or 880%, from $119,336 in 2023 to $1,169,413 in 2024. This increase was mainly due to various corporate financing and compliance activities undertaken during the year, including the issuance of convertible notes, additional public offerings, employee incentive plans, and the replacement of our accounting and legal firms. Furthermore, we conducted extensive due diligence efforts in connection with these activities, further contributing to the rise in legal and professional expenses. Another major factor contributing to the increase was the recognition of a $2,973,850 impairment loss on goodwill and $1,773,300 in share-based compensation expenses, both of which were not accrued in the previous year.
However, some cost reductions partially offset the overall increase. Salaries and welfare expenses decreased by $406,106, or 25%, reflecting workforce adjustments. Office expenses also declined by $64,233, or 57%, due to improved cost control measures. Additionally, other administrative expenses decreased significantly by $1,378,294, or 95%, contributing to partial cost optimization.
Overall, while certain strategic and regulatory costs led to a substantial increase in general and administrative expenses, we remain committed to optimizing our cost structure and improving operational efficiency to support long-term business growth.
Other income and expenses
Total net other expenses, including those from continuing and discontinued operations, were $963,058 for the year ended December 31, 2024, compared to net other income of $58,720 for the year ended December 31, 2023. This change was primarily due to foreign exchange loss of $917,691.
Income tax expense
BVI
We are not subject to any income tax in the BVI.
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Hong Kong
We are not subject to any income tax in Hong Kong.
PRC
Our income tax expense including those from continuing and discontinued operations, were $54,531 for the year ended December 31, 2024 and our income tax expenses were $115,031 for the year ended December 31, 2023.
Net Loss
As a result of the foregoing, we reported a net loss of $8,679,289 from our continuing and discontinued operations for the year ended December 31, 2024, compared to a net loss of $2,547,668 in 2023.
Cash Flows for the Years Ended December 31, 2025, compared to the Year Ended December 31, 2024
The following table summarizes our cash flows for the years ended December 31, 2025 and 2024:
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities from continuing operations | $ | (1,296,079 | ) | $ | (39,442,217 | ) | ||
| Net cash provided by operating activities from discontinued operations | - | 61,004 | ||||||
| Net cash used in operating activities from discontinued operations | (1,296,079 | ) | (39,381,213 | ) | ||||
| Net cash provided by investing activities from continuing operations | 469,913 | 335,120 | ||||||
| Net cash provided by investing activities | 469,913 | 335,120 | ||||||
| Net cash provided by financing activities from continuing operations | 11,970,851 | 37,272,453 | ||||||
| Net cash provided by financing activities | 11,970,851 | 37,272,453 | ||||||
| Effect of exchange rate change on cash and cash equivalents, and restricted cash from continuing operations | (873,229 | ) | (61,330 | ) | ||||
| Effect of exchange rate change on cash and cash equivalents, and restricted cash | (873,229 | ) | (61,330 | ) | ||||
| Net increase (decrease) in cash and restricted cash | $ | 10,271,456 | $ | (1,834,970 | ) | |||
Operating Activities
Continuing operations
Net cash used in operating activities from continuing operations was $1,296,079 for the year ended December 31, 2025, compared to $39,442,217 for the year ended December 31, 2024. The decrease in net cash outflow for 2025 was primarily attributable to the fact that no significant prepayments were disbursed in the current year.
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Investing Activities
Net cash provided by investing activities was $469,913 for the year ended December 31, 2025, compared to $335,120 used in investing activities for the year ended December 31, 2024. The net cash provided in 2025 was primarily attributable to the collection of $479,965 in proceeds related to the disposal of a subsidiary in 2024.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2025, was $11,970,851, compared to $37,272,453 provided by financing activities for the year ended December 31, 2024. The net cash provided in 2025 was primarily due to the successful additional offerings amounting to $11,500,000 and net proceeds from the issuance of convertible notes totaling $797,460.
Cash Flows for the Years Ended December 31, 2024, compared to the Year Ended December 31, 2023
The following table summarizes our cash flows for the years ended December 31, 2024 and 2023:
| Years ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net cash used in operating activities from continuing operations | $ | (39,442,217 | ) | $ | (1,649,526 | ) | ||
| Net cash used in (provided by) operating activities from discontinued operations | 61,004 | 3,171 | ||||||
| Net cash used in operating activities from discontinued operations | (39,381,213 | ) | (1,646,355 | ) | ||||
| Net cash provided by (used in) investing activities from continuing operations | 335,120 | (4,062,943 | ) | |||||
| Net cash provided by (used in) investing activities from discontinued operations | - | - | ||||||
| Net cash provided by (used in) used in investing activities | 335,120 | (4,062,943 | ) | |||||
| Net cash provided by financing activities from continuing operations | 37,272,453 | 7,772,884 | ||||||
| Net cash provided by financing activities from discontinued operations | - | - | ||||||
| Net cash provided by financing activities | 37,272,453 | 7,772,884 | ||||||
| Effect of exchange rate change on cash and cash equivalents, and restricted cash from continuing operations | (61,330 | ) | (68,791 | ) | ||||
| Effect of exchange rate change on cash and cash equivalents, and restricted cash from discontinued operations | - | - | ||||||
| Effect of exchange rate change on cash and cash equivalents, and restricted cash | (61,330 | ) | (68,791 | ) | ||||
| Net increase (decrease) in cash and restricted cash | $ | (1,834,970 | ) | $ | 1,994,795 | |||
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Operating Activities
Continuing operations
Net cash used in operating activities from continuing operations was $39,442,217 for the year ended December 31, 2024, compared to $1,649,526 for the year ended December 31, 2023. The increase in net cash outflow for 2024 was primarily attributable to a net loss of $8,146,591 from our continued operations and prepayments to suppliers totaling $36,643,771 during the year ended 2024.
Discontinued operations
Net cash used in operating activities from discontinued operations was $61,004 for the year ended December 31, 2024, compared to a net cash flow in of $3,171 for the year ended December 31, 2023. The increase in net cash outflow for 2024 was primarily attributable to a net loss of $532,698 from our discontinued operations and increased in accounts receivables and accounts receivables-related parties for $148,996 and $131,992 respectively.
Investing Activities
Net cash provided by investing activities was $335,120 for the year ended December 31, 2024, compared to $4,062,943 used in investing activities for the year ended December 31, 2023. The net cash provided in 2024 was primarily attributable to proceeds from the disposal of subsidiaries amounting to $389,083.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2024, was $37,272,453, compared to $7,772,884 provided by financing activities for the year ended December 31, 2023. The net cash provided in 2024 was primarily due to the successful additional offerings amounting to $35,251,717 and net proceeds from the issuance of convertible notes totaling $1,951,250.
Future Financings
We may sell our common stock in order to fund our business growth. Issuances of additional shares will result in dilution to existing shareholders. There is no assurance that we will achieve sales of the equity securities or arrange for debt or other financing to fund our growth in case it is necessary, or if we are able to do so, there is no guarantee that existing shareholders will not be substantially diluted.
Critical Accounting Estimates
We regularly evaluate the accounting policies and estimates that we use to make budgetary and financial statement assumptions. A complete summary of these policies is included in the notes on our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management. The discussion of our critical accounting policies contained in Note 2 to our consolidated financial statements, “Summary of Significant Accounting Policies”, is incorporated herein by reference.
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Recent Accounting Pronouncements
The discussion of the recent accounting pronouncements contained in Note 2 to our consolidated financial statements, “Summary of Significant Accounting Policies”, is incorporated herein by reference.
Recent Developments
Entry into a sales agreement
On September 22, 2025, Top Kingwin Hi Tech Inc., a subsidiary of the Company entered into a sales contract with Walker Times International (Hong Kong) Co., Ltd. for sale of an aggregate of 10,000 units of its TK-D2C AI Robots to the Purchaser at a price of S480 per unit for a total proceeds of US$4.8 million. The robots are to be delivered in batches through October 2025 to September 2026. As of December 31, 2025, delivery of 100 robots has been completed, accounting for 10% of the total contracted quantity.
Reverse Share Splits
The Company effected a reverse share split of its Class A ordinary shares at a ratio of 1-for-25, which became effective on May 5, 2025, following shareholder approval on April 22, 2025. As a result of this reverse share split, the number of issued and outstanding shares was reduced from approximately 180 million to approximately 7.2 million. In connection with the reverse share split, the par value of the Company’s Class A ordinary shares was proportionately increased from US$0.0001 per share to US$0.0025 per share.
The Company effected a second reverse share split of its Class A ordinary shares at a ratio of 1-for-25, which became effective on September 8, 2025, following shareholder approval on August 14, 2025. As a result of this reverse share split, the number of issued and outstanding shares was reduced from approximately 47 million to approximately 1.9 million. In connection with the reverse share split, the par value of the Company’s Class A ordinary shares was proportionately increased from US$0.0025 per share to US$0.0625 per share.
Nasdaq Compliance
In November 2024, the Company received a notification letter from Nasdaq indicating that it was not in compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2), as the closing bid price of its Class A ordinary shares had remained below $1.00 per share for 30 consecutive business days. The Company was provided a 180-day compliance period to regain compliance and subsequently regained compliance with the minimum bid price requirement in May 2025 following the effectiveness of a reverse share split in May 2025.
On August 18, 2025, the Company received a notification from Nasdaq that it was again not in compliance with the minimum bid price requirement. Due to the Company’s prior reverse share split within the preceding one-year period, the Company was not eligible for an additional compliance period, and Nasdaq issued a delisting determination. The Company timely requested a hearing before the Nasdaq Hearings Panel to appeal the delisting determination, which stayed the suspension of trading of its Class A ordinary shares pending the outcome of the hearing. The Company subsequently effected a reverse share split in September 2025, and on October 7, 2025, Nasdaq notified the Company that it had regained compliance with the minimum bid price requirement and determined to subject the Company to a one-year Mandatory Panel Monitor pursuant to Listing Rule 5815(d)(4)(B). During this monitoring period, any subsequent failure to comply with the minimum bid price requirement may result in the issuance of a delisting determination without an additional compliance period.
Registered Direct Offering
On June 23, 2025, the Company entered into a securities purchase agreement with certain non-U.S. investors pursuant to which it agreed to sell an aggregate of 3,500,000 Class A ordinary shares, par value US$0.0025 per share, at a purchase price of US$0.4343 per share, for gross proceeds of approximately US$1.5 million. The offering closed on June 26, 2025. The Company intended to use the net proceeds for working capital and general corporate purposes.
On July 7, 2025, the Company and the investors entered into a termination agreement pursuant to which the parties agreed to unwind the transaction and terminate the securities purchase agreement in its entirety. In connection with the termination, all shares issued to the investors were repurchased by the Company and cancelled, and the Company refunded the full purchase price to the investors. The termination agreement included mutual releases and provided that neither party admitted any liability or wrongdoing.
Private Placement
On August 1, 2025, the Company entered into a securities purchase agreement with certain non-U.S. investors pursuant to which it agreed to sell an aggregate of 26,136,363 Class A ordinary shares, par value US$0.0025 per share, at a purchase price of US$0.44 per share, for gross proceeds of approximately US$11.5 million. The offering closed on August 5, 2025. The Company intends to use the net proceeds for working capital and general corporate purposes.
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Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
Below is a list of our directors, senior management and any employees upon whose work we are dependent as of the date of this Annual Report, and a brief account of the business experience of each of them. The business address for our directors and officers is Room 1304, Building No. 25, Tian’an Headquarters Center, No. 555 North Panyu Avenue, Donghuan Street, Panyu District, Guangzhou, Guangdong Province, PRC, 511400.
| Name | Age | Position(s) | ||
| Ruilin Xu | 35 | Chief Executive Officer, Chairman of the Board of Directors, and Director | ||
| Jie Yang | 43 | Chief Financial Officer | ||
| Dongliang Mao | 46 | Director | ||
| Zhanlin Liao (1)(4) | 38 | Independent Director | ||
| Yibing Li (2) | 44 | Independent Director | ||
| Yanna Li (3) | 39 | Independent Director |
| (1) | Chair of the Audit Committee. |
| (2) | Chair of the Compensation Committee. |
| (3) | Chair of the Nominating and Corporate Governance Committee. |
| (4) | Audit Committee financial expert. |
Ruilin Xu has been serving as our Director since February 16, 2022, and Chief Executive Officer and Chairman of the board of directors since August 22, 2022. He has approximately ten years of experience in training, consulting and advisory industry. Mr. Xu founded and has been serving as Chief Executive Officer for our operating subsidiary, Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd., since October 2018. From August 2020, he has been serving as a Director of Chengdu Red Eagle Equity Investment Fund Management Co., Ltd., focusing on private placement, mergers and acquisitions and investment in National Equities Exchange and Quotations and Beijing Stock Exchange. Mr. Xu founded and has been serving as Deputy General Manager of Guangzhou Tiancheng Capital Management Group Co., Ltd., a company specialized in venture capital financing, in July 2019, and served as Deputy General Manager until September 30, 2021. From December 2012 to February 2019, Mr. Xu served as the Chief Executive Officer and Chief Instructor of Chengdu Chengbang Enterprise Management Consulting Co., Ltd., the main business of which is enterprise management consulting and it has provided consulting services for hundreds of small and medium-sized enterprises in China. Mr. Xu holds a bachelor’s degree with a major in business administration from Apollos University, USA and a master’s degree in international business from EU Business School, Switzerland.
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Jie Yang has served as our director since August 19, 2024. Ms. Yang was the co-founder and general manager of the delivery center of Huachuang Industry Research (Guangzhou) Co., Ltd. From August 2021 to December 2021, she was the director of consulting department of Shangkuai Public Accounting Firm (special general partnership) Guangdong Branch. From December 2018 to July 2021, she was the director of consulting department of Zhongtao Huayi Accountants Co., Ltd. Ms. Yang obtained a bachelor’s degree in accounting from Sun Yat-Sen University in July 2014. She achieved her Certified Tax Agent (CTA) certification in China in 2017.She further achieved her Certified Public Accountant (CPA) certification in China in 2019.
Dongliang Mao has served as our director since August 19, 2024. Mr. Mao has been the general manager of Guangdong Tiancheng Jinhui Enterprise Management Consulting Co., Ltd. from October 2023. From June 2020 to now, Mr. Mao has been the executive Director of Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. Mr. Mao obtained a Certificate of Completion in Business Administration from Sun Yat-Sen University in July 2023.
Zhanlin Liao, has served as our director since August 19, 2024. Mr. Liao has been the financial director of Fenglian International Co., Ltd. Digital Technology from June 2019. From January 2014 to January 2019, Mr. Liao was the financial manager of BYD Co., Ltd. New Energy Vehicles. From October 2009 to December 2013, Mr. Liao was the assistant manager of KPMG Huazhen LLP Accounting Firm. Mr. Liao earned his bachelor’s degree in financial applied computing from Nanyang Technological University in September 2009.
Yibing Li, has served as our director since October 11, 2024. Mr. Li has been the chairman and general manager of Shenzhen Qianhai Shanjian Capital Management Co., Ltd. since January 2020, in charge of leading the company’s artificial intelligence (“AI”) hardware design investment projects. Mr. Li was the AI hardware product manager in Shenzhen Hanyu Technology Co. from January 2016 to December 2019. Mr. Li was also the product manager in Shenzhen Boyingtong Technology Co., Ltd. from March 2014 to December 2019. Mr. Li has a bachelor’s degree from Massey University of New Zealand.
Yanna Li has served as our director since October 11, 2024. Ms. Li has been the general manager of Guangzhou Chanfa Enterprise Development Co., Ltd. since July 2021, in charge of the overall marketing and operations management. Ms. Li was the assistant general manager of Shenzhen Bode Century Enterprise Management Consulting Co., Ltd. from February 2010 to June 2021. Ms. Li graduated from Guangzhou Nanyang Ligong College in 2005, majored in Chinese/English bilingual secretary service. Ms. Li also studied in Guangzhou University, majored in business management, from 2012 to 2015.
B. Compensation
Executive Compensation
For the fiscal years ended December 31, 2024 and 2025, we paid an aggregate of USD 123,434 and USD80,248 , respectively, which is the total amount of base salary plus bonus, in cash to our CEO and CFO. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Our PRC subsidiary is required by law to make contributions equal to certain percentages of each employee’s salary for his or her medical insurance, maternity insurance, workplace injury insurance unemployment insurance, pension benefits and housing provident fund.
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Employment Agreements
We entered into one-year employment agreements with Ruilin Xu as CEO on August 22, 2022, and Jie Yang as CFO on August 19, 2024. On June 17, 2025, we amended their respective employment agreements, pursuant to which we agreed to pay to our CEO and CFO a monthly remuneration of $30,000 payable in the Company’s Class B Ordinary Shares and $10,000 payable in the Company’s Class A Ordinary Shares respectively, retroactively effective from October 2024. Each of the employment agreement will be renewed automatically for additional one (1) year terms if neither the Company nor the executive officer provides a notice of termination of the employment to the other party within thirty (30) days prior to the expiration of the applicable term. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including but not limited to the convictions or pleads guilty to certain criminal offenses, gross negligence, dishonesty, willful misconducts or willful disobedience of a lawful directive of the board. We may also terminate the employment without cause, at any time, upon thirty (30) days’ prior written notice to the executive officers. An executive officer may terminate his or her employment at any time with a thirty (30) days’ written notice for certain good reasons. Each executive has agreed at all times during the term of the employment and after its termination, to hold in the strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, corporation or other entity without written consent of the Company, any confidential information. In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her employment and for twelve (12) months following termination of the employment. In addition, the executive officers are also eligible for cash bonus and equity incentives, as determined by the board.
Director Compensation
Mr. Dongliang Mao receives a monthly compensation of $5,000 in equivalent stock for his services as a director of the Board, retroactively effective from October 2024. Mr. Zhanlin Liao receives a monthly compensation of $10,000 in equivalent stock for his services as a director of the Board, retroactively effective from October 2024. Ms. Yanna Li will receive a monthly compensation of $8,000 or equivalent stock for her services as a director of the Board, pursuant to the offer letter between Ms. Li and the Company, and Mr. Yibing Li will receive a monthly compensation of $10,000 or equivalent stock for his services as a director of the Board, pursuant to the offer letter between Mr. Li and the Company.
Clawback Policy
On November 29, 2023, the Board adopted a Clawback Policy (the “Clawback Policy”) providing for the recovery of certain incentive-based compensation from current and former executive officers of the Company in the event the Company is required to restate any of its financial statements filed with the SEC under the Exchange Act in order to correct an error that is material to the previously-issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Adoption of the Clawback Policy was mandated by new Nasdaq listing standards introduced pursuant to Exchange Act Rule 10D-1. The Clawback Policy is in addition to Section 304 of the Sarbanes-Oxley Act of 2002 which permits the SEC to order the disgorgement of bonuses and incentive-based compensation earned by a registrant issuer’s chief executive officer and chief financial officer in the year following the filing of any financial statement that the issuer is required to restate because of misconduct, and the reimbursement of those funds to the issuer.
C. Board Practices
Composition of Board
Our Board of Directors consists of five (5) directors as of this Annual Report. Pursuant to our Amended and Restated Memorandum and Articles of Association, each of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director is eligible for reelection. All of our executive officers are appointed by and serve at the discretion of our board of directors.
There is no formal requirement under the Company’s Amended and Restated Memorandum and Articles of Association mandating that we hold an annual meeting of our shareholders. However, notwithstanding the foregoing, we intend to hold such meetings on our annual meeting to, among other things, elect our directors.
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Director Independence
Our board has reviewed the independence of our directors, applying the Nasdaq independence standards. Based on this review, the board determined that each of Zhanlin Liao, Yibing Li, Yanna Li is “independent” within the meaning of the Nasdaq rules. In making this determination, our board considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our board deemed relevant in determining their independence. As required under applicable Nasdaq rules, we anticipate that our independent directors will meet on a regular basis as often as necessary to fulfill their responsibilities, including at least annually in executive session without the presence of non-independent directors and management.
Board Committees
Currently, three committees have been established under the board: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee.
Audit Committee
Our Audit Committee consists of Zhanlin Liao, Yibing Li, Yanna Li, with Zhanlin Liao serving as chair of the Audit Committee. Our board has affirmatively determined that each of the members of the Audit Committee meets the definition of “independent director” for purposes of serving on an Audit Committee under Rule 10A-3 of the Exchange Act and Nasdaq rules. In addition, our board has determined that Zhanlin Liao qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the Nasdaq rules.
The Audit Committee is responsible for, among other matters:
| ● | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
| ● | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
| ● | discussing the annual audited financial statements with management and the independent auditors; |
| ● | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
| ● | reviewing and approving all proposed related party transactions; |
| ● | meeting separately and periodically with management and the independent auditors; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
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Compensation Committee
Our Compensation Committee consists of Zhanlin Liao, Yibing Li, Yanna Li, with Yibing Li serving as chair of the Compensation Committee. Our board has affirmatively determined that each of the members of the Compensation Committee meets the definition of “independent director” for purposes of serving on Compensation Committee under Nasdaq rules.
The Compensation Committee is responsible for, among other matters:
| ● | reviewing and approving to the board with respect to the total compensation package for our most senior executive officers; |
| ● | approving reviewing and recommending to the board with respect to the compensation of our directors; and overseeing the total compensation package for our executives other than the most senior executive officers; |
| ● | selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and |
| ● | programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. |
| ● | supervises the administration of our employee benefit plans, including our 2024 Equity Incentive Plan (as defined herein) |
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Zhanlin Liao, Yibing Li, Yanna Li, with Yanna Li serving as chair of the Nominating and Corporate Governance Committee. Our board has affirmatively determined that each of the members of the Nominating and Corporate Governance Committee meets the definition of “independent director” for purposes of serving on a Nominating and Corporate Governance Committee under Nasdaq rules.
The Nominating and Corporate Governance Committee is responsible for, among other matters:
| ● | identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy; |
| ● | reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; |
| ● | identifying and recommending to our board the directors to serve as members of committees; |
| ● | advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Duties of Directors
Under Cayman Islands law, all of our directors owe fiduciary duties to the Company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended from time to time. The Company has the right to seek damages if a duty owed by any of our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.
Interested Party Transactions
A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested. A director must disclose the nature of his interest to all other directors at a meeting of the board after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into. A general notice given to the board by any director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made.
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Remuneration and Borrowing
The directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid for all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors. Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings, property, assets (present and future) and uncalled capital or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party.
Top Kingwin Ltd 2024 & 2025 Equity Incentive Plan
The Top Kingwin Ltd 2024 Equity Incentive Plan (the “2024 Plan”) was approved and adopted by the Company on February 22, 2024. The Company’s 2025 Equity Incentive Plan (the “2025 Plan”, together with the 2024 Plan, the “Equity Incentive Plans”) was approved by the Company on April 22, 2025. The purpose of the Equity Incentive Plans is to promote the long-term success of the Company and the creation of shareholder value by (a) encouraging Employees, Directors and Consultants to focus on the Company’s performance, (b) encouraging the attraction and retention of Employees, Directors and Consultants with exceptional qualifications, and (c) providing incentives that align the interests of Employees, Directors and Consultants with those of the shareholder of the Company. The Equity Incentive Plans permit the grant of Incentive Share Options, Nonstatutory Share Options, Restricted Shares, Restricted Share Units, Share Appreciation Rights, Performance Units, and Performance Shares as the Administrator may determine. Capitalized terms used but not defined herein have the meanings ascribed to them in the Equity Incentive Plans.
In April 2024, the Company issued an aggregate of 3,000,000 class A ordinary shares, par value of $0.0001 per share, to its 11 employees under the 2024 Plan.
In August 2025, the Company issued an aggregate of 1,081,267 class A ordinary shares, par value of $0.0025 per share, and an aggregate of 22,721 class B ordinary shares, par value of $0.0025 per share, to its employees under the 2025 Plan.
Plan Administration
The Compensation Committee has full power and authority, in its sole discretion, to administer, implement and carry out the Equity Incentive Plans, including, without limitation, (i) selecting grantees from the individuals eligible to receive Awards, the time when Awards will be granted, the number of Awards and the number of Ordinary Shares by each Award; (ii) determining the terms and conditions of each Award grant; (iii) approving the forms of agreement for use under the Equity Incentive Plans; (iv) establishing, adopting, or revising any rules and regulations to administer the Equity Incentive Plan; and (v) taking any and all other action as it deems necessary or advisable for the operation or administration of the Equity Incentive Plan and the Awards thereunder.
Eligibility
Subject to the conditions set forth in the Equity Incentive Plans, any person, including employees, directors or consultants employed by the Company or any of its subsidiaries who are in positions of substantial responsibility and whose contributions are important to the successful conduct of the Company’s business are eligible to be granted Awards.
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Options
The grant of share options is to be at an exercise price not less than Fair Market Valie of the Ordinary Share subject to the option on the date the option is granted and the par value of the Ordinary Share. However, the exercise price of any share option granted to any individual who, at the date of grant, owns Shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company or any Parent or Subsidiary of the Company may not be less than 110% of Fair Market Value on the date of grant and such Option may not be exercisable for more than five years from the date of grant. The options may vest based on performance or other criteria and, at any time after the grant of an option, the Compensation Committee may, in its sole discretion, accelerate the vesting of such option. Repricing of share options is prohibited without the approval of shareholders. As the date of this Annual Report, no shares option was granted under the Equity Incentive Plans.
Restricted Share
The Compensation Committee is authorized to grant shares subject to various restrictions, including restrictions concerning voting rights and transferability, and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Compensation Committee. Subject to the conditions set forth in the Equity Incentive Plan, upon issuance of restricted stock, the holder shall have, unless otherwise provided by the Compensation Committee, all the rights of a shareholder with respect to said shares, subject to the restrictions in each individual award agreement, including the right to receive all dividends and other distributions paid or made with respect to the shares; provided, however, that, in the sole discretion of the Compensation Committee, any extraordinary or special dividends or distributions with respect to the shares shall be subject to the restrictions set forth in the Equity Incentive Plans.
Non-transferability
Awards granted under our Share Incentive Plan are generally not transferable during the lifetime of the award holder.
Amendment and Termination of the Equity Incentive Plans
The Compensation Committee or the Board of Directors of the Company may, at any time terminate, and from time to time may amend or modify the Equity Incentive Plan; provided, however, that no amendment or modification may become effective without approval of the amendment or modification by the shareholders of the Company if (a) shareholder approval is required to enable the Equity Incentive Plan to satisfy any applicable statutory or regulatory requirements. No amendment, modification or termination of the Equity Incentive Plans shall in any manner adversely affect any Awards theretofore granted under the Equity Incentive Plan without the consent of the holders or the permitted transferee(s) of such Awards, subject always to applicable laws. No Awards may be granted or awarded during any period of suspension or after termination of the Equity Incentive Plans.
Board Diversity Matrix
| Board Diversity Matrix (As of Dec 31, 2025) | ||||
| Country of Principal Executive Offices | People’s Republic of China | |||
| Foreign Private Issuer | Yes | |||
| Disclosure Prohibited Under Home Country Law | No | |||
| Total Number of Directors | 5 | |||
| Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender |
| Directors | 2 | 3 | 0 | 0 |
| Part II: Demographic Background | ||||
| Underrepresented Individual in Home Country Jurisdiction | 0 | |||
| LGBTQ+ | 0 | |||
| Did Not Disclose Demographic Background | 0 | |||
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D. Employees
As of the date of this Annual Report, we have a total of 21 full-time employees, of which four are in sales and marketing, two in client services, three in procurement, four in the finance department, one in IT engineering and seven in general administration.
We have standard employment, comprehensive confidentiality with our management and standard confidentiality and non-compete terms with all other employees. As required by laws and regulations in China, we participate in various social security plans that are organized by municipal and provincial governments, including pension insurance, medical insurance, unemployment insurance, maternity insurance, job-related injury insurance and housing fund. We are required by PRC laws to make contributions to employee social security 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 believe that we maintain a good working relationship with our employees, and we have not experienced any labor disputes. None of our employees is represented by a labor union or covered by collective bargaining agreements. We have not experienced any work stoppages.
E. Share Ownership
See Item 7 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 tables set forth certain information with respect to the beneficial ownership of our Class A Ordinary Shares (including Class A Ordinary Shares issuable upon the conversion of outstanding Class B Ordinary Shares) for:
| ● | each shareholder known by us to be the beneficial owner of more than 5% of our outstanding Class A Ordinary Shares or Class B Ordinary Shares; |
| ● | each of our directors; |
| ● | each of our named executive officers; and |
| ● | all of our directors and executive officers as a group. |
The beneficial ownership of our Class A Ordinary Shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, and includes the Class A Ordinary Shares issuable upon the conversion of the outstanding Class B Ordinary Shares and the Class A Ordinary Shares issuable pursuant to share options that are exercisable within 60 days of the date of this Annual Report. Class A Ordinary Shares issuable pursuant to share options are deemed outstanding for computing the percentage of the person holding such options but are not outstanding for computing the percentage of any other person. As of the date of this Annual Report, there were no Class A Ordinary Shares issuable pursuant to share options exercisable within 60 days thereof.
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The percentage of beneficial ownership owned is based on 2,298,365 Class A Ordinary Shares and 58,861 Class B Ordinary Shares as of the date of this report.
| Class A Ordinary Shares | Class B Ordinary shares | |||||||||||||||
| Name and Address of Beneficial Owner | Shares | % of Total Voting Power* | Shares | % of Total Voting Power* | ||||||||||||
| Directors and Executive Officers | ||||||||||||||||
| Ruilin Xu (1) | 768 | 0.02 | % | 58,861 | 50.60 | % | ||||||||||
| Jie Yang | 17,601 | 0.38 | % | - | - | % | ||||||||||
| Dongliang Mao (2) | 8,955 | 0.19 | % | - | - | % | ||||||||||
| Zhanlin Liao | 17,601 | 0.38 | % | - | - | % | ||||||||||
| Yibing Li | 17,601 | 0.38 | % | - | - | % | ||||||||||
| Yanna Li | 14,080 | 0.30 | % | - | - | % | ||||||||||
| All directors and executive officers as a group (three persons) | 49,282 | 0.02 | % | 58,861 | 50.60 | % | ||||||||||
| 5% Beneficial Owners | ||||||||||||||||
| Ruilin Xu | 768 | 0.02 | % | 58,861 | 50.60 | % | ||||||||||
| * | Represents the voting power with respect to all of our Class A Ordinary Shares and Class B Ordinary Shares, voting as a single class. According to our charter, each Class A Ordinary Shares entitles to 1 vote and each Class B Ordinary Share entitles to 40 votes. |
| (1) | Includes 768 Class A Ordinary Shares and 6,060 Class B Ordinary Shares held by Xu Ruilin Capital CO., Ltd (“Xu Ruilin Capital”), which is a limited liability company incorporated under the British Virgin Islands laws and wholly owned by Mr. Ruilin Xu. The address of Xu Ruilin Capital is Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands. The person having voting, dispositive or investment powers over Xu Ruilin Capital is Mr. Xu. |
| (2) | Includes 154 Class A Ordinary Shares held by Mao Dongliang Holding CO., Ltd (“Mao Dongliang Holding”), which is a limited liability company incorporated under the British Virgin Islands laws and wholly owned by Mr. Mao Dongliang. The address of Mao Dongliang Holding is Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands. The person having voting, dispositive or investment powers over Mao Dongliang Holding is Mr. Mao. |
As of the date of this Annual Report, there were 42 holders of record entered in our Class A ordinary share register and 1 holder of record entered in our Class B ordinary share register. The number of individual holders of record is based exclusively upon our share register and does not address whether a share or shares may be held by the holder of record on behalf of more than one person or institution who may be deemed to be the beneficial owner of a share or shares in our company.
B. Related Party Transactions
A related party is defined as any person who is or was (since the beginning of the last fiscal year, even if such person does not presently serve in that role) (a) an enterprise that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Company; (b) an associate, which is an unconsolidated enterprise in which the Company has a significant influence or which has significant influence over the Company; (c) an individual owning, directly or indirectly, more than 10% of any class of the Company’s voting securities, and immediate family members of such individual; (d) an executive officer, director or nominee for director of the Company and immediate family members of such individual; and (e) an enterprise in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence (which includes enterprises owned by directors or major shareholders of the Company and enterprises that have a member of key management in common with the Company).
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Set forth below are the related party transactions that we have entered into during the last three fiscal years and up to the date of this Annual Report.
Material Transactions with Related Parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. The related parties that had transactions or balances with the Company in 2024 and 2025 consisted of:
| Related Parties | Relationship with the Company | |
| Guangzhou Tiancheng Capital Management Group Co., Ltd. (“Tiancheng Capital”) | The former shareholder of Tiancheng Jinhui from June 18, 2020 to June 30, 2022. And as of December 31, 2025, Mr. Ruilin Xu still holds 37.66% equity interest in Guangzhou Tiancheng Capital Management Group Co., Ltd. (“Tiancheng Capital”). The Company provided advisory and transaction services for Tiancheng Capital. | |
| Mr. Ruilin Xu | The Company’s Chief Executive Officer and director, paid certain professional fees or salaries on behalf of the company. | |
| Mr. Dongliang Mao | The Company’s director, paid certain professional fees on behalf of the Company. | |
| Shaanxi Tiancheng Jinhui Investment Co., Ltd. (Formally known as “Shaanxi Tiancheng Enterprise Management Consulting Co., Ltd.”) | Shaanxi Tiancheng Jinhui Investment Co., Ltd. is one of the Company’s suppliers, and Tiancheng Capital holds 52% equity interest in the party until December 8, 2021. | |
| Guangzhou Tianyi Technology Co., Ltd. (Formally known as “Tiancheng New Retail Investment Holding (Guangdong) Co., Ltd.”) | Guangzhou Tianyi Technology Co., Ltd. is one of the Company’s suppliers, and Tiancheng Capital holds 51% equity interest in the party since March 3, 2020. |
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1) Related party balances
As of December 31, 2024 and 2025
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts payable-related party | ||||||||
| Guangzhou Tiancheng Capital Management Group Co., Ltd. | $ | 7,793 | $ | 17,673 | ||||
| Subtotal | 7,793 | 17,673 | ||||||
| Less: Total accounts payable-related party from discontinued operations | - | - | ||||||
| Total accounts payable-related party | $ | 7,793 | $ | 17,6733 | ||||
| Due from related parties * | ||||||||
| Shenzhen CIC Consulting Co., Ltd. | $ | - | $ | 217,651 | ||||
| Shenzhen Zhongtou Shunshi Investment Management Co. | - | 113,801 | ||||||
| Shenzhen Zhongtou Big Data Technology Co. | - | 25,441 | ||||||
| Shenzhen Zhongtou Industrial Treasure Network Co. | - | 40,086 | ||||||
| Mr. Zhiliang Hu | - | 11,646 | ||||||
| Subtotal | - | 408,625 | ||||||
| Less: Total due from related parties from discontinued operations | - | 408,625 | ||||||
| Total due from related parties | $ | - | $ | - | ||||
| Due to related parties * | ||||||||
| Mr. Ruilin Xu (the Company’s Chief Executive Officer) | $ | 30,173 | $ | 28,907 | ||||
| Infinity worldwide holding ltd | 120,674 | 120,674 | ||||||
| Guangzhou Tiancheng Capital Management Group Co., Ltd. | 71,499 | 68,500 | ||||||
| Mr. Zhiliang Hu | - | 616 | ||||||
| Subtotal | 222,346 | 218,697 | ||||||
| Less: Total due to related parties from discontinued operations | - | 616 | ||||||
| Total due to related parties | $ | 222,346 | $ | 218,081 | ||||
| * | The above balances are due on demand, interest-free and unsecured. The Company used the funds for its operations. |
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2) Related party transactions
For the years ended December 31, 2025, 2024 and 2023
| Name of related parties | December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||
| Revenues | ||||||||||||
| Guangzhou Tiancheng Capital Management Group Co., Ltd. | $ | 26,251 | $ | 134,138 | $ | 612,863 | ||||||
| Total revenues | 26,251 | $ | 134,138 | $ | 612,863 | |||||||
| Cost of revenues from continuing operations | ||||||||||||
| Guangzhou Tiancheng Capital Management Group Co., Ltd. | $ | - | $ | 50,908 | $ | 147,298 | ||||||
| Total cost of revenues from continuing operations | $ | - | $ | 50,908 | $ | 147,298 | ||||||
| Cost of revenues from discontinued operations | ||||||||||||
| Shenzhen Zhongtou Industrial Economic Consulting Co., Ltd. | $ | - | $ | 104,880 | $ | - | ||||||
| Shenzhen Zhongtou Industry Research Institute Co., Ltd. | - | 207,575 | - | |||||||||
| Shenzhen Zhongtou Business Consulting Co., Ltd. | - | 440,376 | - | |||||||||
| Total cost of revenues from discontinued operations | - | 752,831 | - | |||||||||
| * | The revenue from Guangzhou Tiancheng Capital Management Group Co., Ltd arises from advisory and transaction services. Revenues from these services consist of fees associated with private fundraising transactions, which are recognized on a net basis. |
| The costs incurred are related to the business training services provided by Guangzhou Tiancheng Capital Management Group Co., Ltd. These services are delivered through a variety of short-term courses. Revenue is recognized upon the completion of these courses. Training fees are collected in advance of service provision and are recorded as client advances. |
| * | The costs incurred are related to the business consulting services provided by disposed entities. These services are delivered through a variety of short-term services. Revenue is recognized upon the completion of these courses. Training fees are collected in advance of service provision and are recorded as client advances. |
C. Interests of Experts and Counsel
Not applicable.
Item 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
See Item 19 for our audited consolidated financial statements.
Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not currently a party to any legal proceedings that in the opinion of the management, if determined adversely to us, would have a material adverse effect on our business, financial condition, operating results or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
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Dividend Policy
We have not previously declared or paid cash dividends and we have no plan to declare or pay any dividends in the near future on our shares. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.
We are a holding company incorporated in the Cayman Islands. We may rely principally on transfer of funds, dividends and other distributions on equity paid by our PRC subsidiary for our cash and financing requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiary to pay dividends to us.
Our board of directors has discretion as to whether to distribute dividends, subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium and provided always that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.
B. Significant Changes
Except as disclosed elsewhere in this Annual Report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this Annual Report.
Item 9. THE OFFER AND LISTING
A. Offering and Listing Details.
The Registration Statement on Form F-1 (File No. 333- 269290) became effective on March 29, 2023. Our Class A Ordinary Shares are currently listed on Nasdaq Capital Market under the symbol “WAI”.
B. Plan of Distribution
Not applicable.
C. Markets
Our Class A Ordinary Shares are currently listed on Nasdaq Capital Market under the symbol “WAI”.
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
Item 10. ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
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B. Memorandum and Articles of Association
The information required by Item 10.B of Form 20-F is included in the section titled “Description of Share Capital” in our Registration Statement, which section is incorporated herein by reference. Our Third Amended and Restated Memorandum and Articles of Association was filed as Exhibit 3.1 to the Registration Statement on Form S-8 filed on January 23, 2026 and are hereby incorporated by reference into this Annual Report.
C. Material Contracts
Securities Purchase Agreement
On September 5, 2024, the Company entered into a certain securities purchase agreement with 25 investors, pursuant to which the Company agreed to sell up to $38,000,000 of Class A Ordinary Shares at a per share purchase price of $0.23. The parties to the agreement have each made customary representations, warranties and covenants. This offering was consummated on September 10, 2024, upon satisfaction of all closing conditions. The issuance of the Class A Ordinary Shares was in reliance on the exemption from registration provided by the Regulation S.
On November 25, 2024, the Company entered into certain securities purchase agreement with an affiliate of ATW Partners, LLC, an accredited investor as such term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended, pursuant to which the Company agreed to issue to the investor a new series of convertible notes in the original principal amount up to $2,500,000, which note shall be convertible into Class A Ordinary Shares of the Company, in accordance with the terms of the note, for $2,250,000 in gross proceeds. The proceeds are used for general corporate and working capital purposes at the discretion of the Company.
On February 18, 2025, the Company entered into certain securities purchase agreement with an affiliate of ATW Partners, LLC, an accredited investor as such term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended, pursuant to which the Company agreed to issue to the investor a new series of convertible notes in the original principal amount up to $1,000,000, which note shall be convertible into Class A Ordinary Shares of the Company, in accordance with the terms of the note, for $900,000 in gross proceeds. The proceeds are used for general corporate and working capital purposes at the discretion of the Company.
On June 23, 2025, the Company entered into certain securities purchase agreement with certain non-U.S. investors (the “Purchasers”) pursuant to which the Company agreed to sell 3,500,000 of its class A ordinary shares in a registered direct offering at a price of $0.4343 per share, for gross proceeds of approximately $1.5 million (the “June 2025 Offering”). The Company intended to use the net proceeds for working capital and general corporate purposes. The offering closed on June 26, 2025.
On July 7, 2025, the Company and the Purchasers entered into a Termination Agreement and Release (the “Termination Agreement”), pursuant to which the parties agreed to unwind the June 2025 Offering and terminate the corresponding securities purchase agreement in its entirety. Under the terms of the Termination Agreement, (1) all of the shares of the Company issued to the Purchasers shall be returned to the Company by way of the Company repurchasing such Shares in accordance with its articles of association and holding such purchased shares as treasury shares and canceled in accordance with applicable law; and (2) the Company will pay to each Purchaser the full amount of the purchase price paid by such Purchaser under the SPA following the repurchase of such shares. The Termination Agreement includes mutual releases and provides that neither party admits any liability or wrongdoing.
On August 1, 2025, the Company entered into certain securities purchase agreement with certain non-U.S. investors pursuant to which the Company agreed to sell 26,136,363 of its class A ordinary shares, par value of $0.0025 each, for gross proceeds of approximately $11.5 million, at a price of $0.44 per share. The Company intended to use the net proceeds for working capital and general corporate purposes. This offering closed on August 5, 2025.
Other Material Contracts
Other material contracts of the Company, including the securities purchase agreement with Bosera and employment agreements with our CEO and CFO, are described elsewhere in this annual report or in the information incorporated by reference herein.
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D. Exchange Controls
Under Cayman Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to nonresident holders of our shares.
E. Taxation
The following summary of material Cayman Islands, PRC and U.S. federal income tax consequences of an investment in Class A Ordinary Shares is based upon laws and relevant interpretations thereof in effect as of the date of this Annual Report, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in Class A Ordinary Shares, such as the tax consequences under state, local and other tax laws.
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to investors levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is a party to a double tax treaty entered with the United Kingdom in 2010 but is otherwise not party to any double tax treaties which are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
Payments of dividends and capital in respect of Class A Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding will be required under Cayman Islands laws on the payment of a dividend or capital to any holder of Class A Ordinary Shares, nor will gains derived from the disposal of Class A Ordinary Shares be subject to Cayman Islands income or corporation tax.
No stamp duty is payable in the Cayman Islands in respect of the issue of our Class A Ordinary Shares or on an instrument of transfer in respect of our Class A Ordinary Shares except those which hold interests in land in the Cayman Islands.
People’s Republic of China Taxation
According to the EIT Law, which was promulgated by the SCNPC on March 16, 2007, became effective on January 1, 2008, and was last amended on December 29, 2018, and the Implementation Rules of the EIT Law, which were promulgated by the State Council on December 6, 2007, became effective on January 1, 2008, and was last amended on April 23, 2019, enterprises are divided into resident enterprises and non-resident enterprises. Resident enterprises pay enterprise income tax on their incomes obtained in and outside the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC pay enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises with no institutions in the PRC, and non-resident enterprises with income having no substantial connection with their institutions in the PRC, pay enterprise income tax on their income obtained in the PRC at a reduced rate of 10%.
We are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiary. The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or a tax exemption.
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Under the PRC EIT Law and its implementation rules, an enterprise established outside the PRC with a “de facto management body” within the PRC is considered a resident enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income. The implementation rules define the term “de facto management body” as the body that exercises full and substantial control over and overall management of the business, production, personnel, accounts and properties of an enterprise. In April 2009, the SAT issued the Circular of the SAT on Issues Relating to Identification of PRC-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the De Facto Standards of Organizational Management, or SAT Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT’s general position on how the “de facto management body” test should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in the PRC only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.
Further to SAT Circular 82, the SAT issued the SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details of determination on resident status and administration on post-determination matters. Our Company is a company incorporated outside the PRC. As a holding company, the key assets and records of our Company (including the resolutions of its board of directors and the resolutions of its shareholders) are located and maintained, outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities. As such, we do not believe that our Company meets all of the conditions above or 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.” There can be no assurance that the PRC government will ultimately take a view that is consistent with us. If the PRC tax authorities determine that our Cayman Islands holding company is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. For example, a 10% withholding tax would be imposed on dividends we pay to our non- PRC enterprise shareholders. In addition, nonresident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other disposition of ordinary shares, as if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). These rates may be reduced by an applicable tax treaty, but it is unclear whether in practice non-PRC shareholders of our Company would be able to obtain the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. We will continue to monitor our tax status.
United States Federal Income Taxation Considerations
The following does not address the tax consequences to any particular investor or to person in special tax situations such as:
| ● | banks; |
| ● | financial institutions; |
| ● | insurance companies; |
| ● | pension plans; |
| ● | cooperative; |
| ● | regulated investment companies; |
| ● | real estate investment trusts; |
| ● | broker-dealers; |
| ● | persons that elect to mark their securities to market; |
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| ● | U.S. expatriates or former long-term residents of the U.S.; |
| ● | governments or agencies or instrumentalities thereof; |
| ● | tax-exempt entities (including private foundations); |
| ● | persons liable for alternative minimum tax; |
| ● | persons holding our Class A Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction; |
| ● | persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Class A Ordinary Shares); |
| ● | persons who acquired our Class A Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation; |
| ● | persons holding our Class A Ordinary Shares through partnerships or other pass-through entities; |
| ● | beneficiaries of a Trust holding our Class A Ordinary Shares; or |
| ● | persons holding our Class A Ordinary Shares through a Trust. |
The discussion set forth below is addressed only to U.S. Holders (as defined below) that purchase Class A Ordinary Shares in the initial public offering. Prospective purchasers are urged to consult their own tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Class A Ordinary Shares.
Material Tax Consequences Applicable to U.S. Holders of Our Class A Ordinary Shares
The following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Class A Ordinary Shares. It is directed to U.S. Holders (as defined below) of our Class A Ordinary Shares and is based upon laws and relevant interpretations thereof in effect as of the date of this Annual Report, all of which are subject to change. This description does not deal with all possible tax consequences relating to ownership and disposition of our Class A Ordinary Shares or U.S. tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax laws.
The following brief description applies only to U.S. Holders (as defined below) that hold Class A Ordinary Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the U.S. in effect as of the date of this Annual Report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this Annual Report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.
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The brief description below of the U.S. federal income tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of Class A Ordinary Shares and you are, for U.S. federal income tax purposes,
| ● | an individual who is a citizen or resident of the U.S.; |
| ● | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia; |
| ● | an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
| ● | a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
If a partnership (or other entities treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our Class A Ordinary Shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding our Class A Ordinary Shares are urged to consult their tax advisors regarding an investment in our Class A Ordinary Shares.
An individual is considered a resident of the U.S. for federal income tax purposes if he or she meets either the “Green Card Test” or the “Substantial Presence Test” described as follows:
The Green Card Test: You are a lawful permanent resident of the United States, at any time, if you have been given the privilege, according to the immigration laws of the United States, of residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Services issued you an alien registration card, Form I-551, also known as a “green card.”
The Substantial Presence Test: If an alien is present in the United States on at least 31 days of the current calendar year, he or she will (absent an applicable exception) be classified as a resident alien if the sum of the following equals 183 days or more (See §7701(b)(3)(A) of the Internal Revenue Code and related Treasury Regulations):
| 1. | The actual days in the United States in the current year; plus |
| 2. | One-third of his or her days in the United States in the immediately preceding year; plus |
| 3. | One-sixth of his or her days in the United States in the second preceding year. |
WE URGE POTENTIAL PURCHASERS OF OUR CLASS A ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR CLASS A ORDINARY SHARES.
Taxation of Dividends and Other Distributions on our Class A Ordinary Shares
Subject to the PFIC (as defined below) rules discussed below, the gross amount of distributions made by us to you with respect to the Class A Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends- received deduction allowed to corporations in respect of dividends received from other U.S. corporations.
With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Class A Ordinary Shares are readily tradable on an established securities market in the U.S., or we are eligible for the benefits of an approved qualifying income tax treaty with the U.S. that includes an exchange of information program, (2) we are not a PFIC (as defined below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the U.S. and the Cayman Islands, clause (1) above can be satisfied only if the Class A Ordinary Shares are readily tradable on an established securities market in the U.S. Under U.S. Internal Revenue Service authority, Class A Ordinary Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the U.S. if they are listed on certain exchanges, which presently include the NYSE and the Nasdaq Stock Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Class A Ordinary Shares, including the effects of any change in law after the date of this Annual Report.
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Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Class A Ordinary Shares will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”
To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A Ordinary Shares, and to the extent that the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.
Taxation of Dispositions of Class A Ordinary Shares
Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in USD) for the share and your tax basis (in USD) in the Class A Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Class A Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as U.S. source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.
Passive Foreign Investment Company (“PFIC”)
A non-U.S. corporation is considered a PFIC, as defined in Section 1297(a) of the US Internal Revenue Code, for any taxable year if either:
| ● | at least 75% of its gross income for such taxable year is passive income; or |
| ● | at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”). |
Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise in the initial public offering will generally be considered to be held for the production of passive income and (2) the value of our assets must be determined based on the market value of our Class A Ordinary Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets (including the cash raised in the initial public offering) on any particular quarterly testing date for purposes of the asset test.
Based on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. We must make a separate determination each year as to whether we are a PFIC, however, and there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year. Depending on the amount of cash we raise in the initial public offering, together with any other assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination following the end of any particular tax year. In addition, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Class A Ordinary Shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our Class A Ordinary Shares and the amount of cash we raise in the initial public offering. Accordingly, fluctuations in the market price of the Class A Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly, we spend the cash we raise in the initial public offering. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend upon material facts (including the market price of our Class A Ordinary Shares from time to time and the amount of cash we raise in the initial public offering) that may not be within our control. If we are a PFIC for any year during which you hold Class A Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Class A Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely “mark-to-market” election as described below, however, you may avoid some of the adverse effects of the PFIC regime by making a “purging election” (as described below) with respect to the Class A Ordinary Shares.
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If we are a PFIC for your taxable year(s) during which you hold Class A Ordinary Shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Class A Ordinary Shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax rules:
| ● | the excess distribution or gain will be allocated ratably over your holding period for the Class A Ordinary Shares; |
| ● | the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; |
| ● | the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year; and |
| ● | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated as capital, even if you hold the Class A Ordinary Shares as capital assets.
A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the US Internal Revenue Code for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or are deemed to hold) Class A Ordinary Shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares as of the close of such taxable year over your adjusted basis in such Class A Ordinary Shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Class A Ordinary Shares over their fair market value as of the close of the taxable year. Such ordinary loss, however, is allowable only to the extent of any net mark-to-market gains on the Class A Ordinary Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Class A Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Class A Ordinary Shares. Your basis in the Class A Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “— Taxation of Dividends and Other Distributions on our Class A Ordinary Shares” generally would not apply.
The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq Capital Market. If the Class A Ordinary Shares are regularly traded on the Nasdaq Capital Market and if you are a holder of Class A Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.
Alternatively, a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election under Section 1295(b) of the US Internal Revenue Code with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. The qualified electing fund election, however, is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. Therefore, prospective investors should assume that a qualified electing fund election will not be available. If you hold Class A Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual information regarding such Class A Ordinary Shares, including regarding distributions received on the Class A Ordinary Shares and any gain realized on the disposition of the Class A Ordinary Shares. The failure to file IRS Form 8621 could result in the imposition of penalties and the extension of the statute of limitations with respect to U.S. federal income tax.
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If you do not make a timely “mark-to-market” election (as described above), and if we were a PFIC at any time during the period you hold our Class A Ordinary Shares, then such Class A Ordinary Shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a “purging election” for the year we cease to be a PFIC. A “purging election” creates a deemed sale of such Class A Ordinary Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Class A Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Class A Ordinary Shares for tax purposes.
IRC Section 1014(a) provides for a step-up in basis to the fair market value for our Class A Ordinary Shares when inherited from a decedent that was previously a holder of our Class A Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely qualified electing fund election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) our Class A Ordinary Shares, or a mark-to-market election and ownership of those Class A Ordinary Shares are inherited, a special provision in IRC Section 1291(e) provides that the new U.S. Holder’s basis should be reduced by an amount equal to the Section 1014 basis minus the decedent’s adjusted basis just before death. As such if we are determined to be a PFIC at any time prior to a decedent’s passing, the PFIC rules will cause any new U.S. Holder that inherits our Class A Ordinary Shares from a U.S. Holder to not get a step-up in basis under Section 1014 and instead will receive a carryover basis in those Class A Ordinary Shares.
You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Class A Ordinary Shares and the elections discussed above.
Information Reporting and Backup Withholding
Dividend payments with respect to our Class A Ordinary Shares and proceeds from the sale, exchange or redemption of our Class A Ordinary Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal Revenue Code at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. Transactions effected through certain brokers or other intermediaries, however, may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.
Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Class A Ordinary Shares, subject to certain exceptions (including an exception for Class A Ordinary Shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Class A Ordinary Shares. Failure to report such information could result in substantial penalties. You should consult your own tax advisor regarding your obligation to file a Form 8938.
F. Dividends and Paying Agents
Not applicable.
G. Statement by Experts
Not applicable.
H. Documents on Display
We have previously filed the Registration Statement with the SEC.
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As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers, directors and principal shareholders are exempt from the insider short-swing disclosure and profit recovery rules of Section 16 of the Exchange Act. Annual reports and other information we file with the Commission may be inspected at the public reference facilities maintained by the Commission at Room 1024, 100 F. Street, N.E., Washington, D.C. 20549, and copies of all or any part thereof may be obtained from such offices upon payment of the prescribed fees. You may call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms and you can request copies of the documents upon payment of a duplicating fee, by writing to the Commission. In addition, the Commission maintains a web site that contains reports and other information regarding registrants (including us) that file electronically with the Commission which can be assessed at http://www.sec.gov.
I. Subsidiary Information
For a listing of our subsidiaries, see “Item 4. Information on the Company — A. History and Development of the Company.”
Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Our exposure to interest rate risk primarily relates to interest income generated by excess cash, which is mostly held in interest-bearing bank deposits. While interest-earning instruments carry a degree of interest rate risk, we have not been exposed, nor do we anticipate being exposed, to material risks due to changes in market interest rates.
Foreign Currency Risk
A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.
Our functional currency is the RMB, and our financial statements are presented in U.S. dollars. The RMB depreciated by 0.3% in fiscal year 2025, depreciated by 2.8% in fiscal year 2024 and depreciated by 4.5% in fiscal year 2023. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated in RMB.
To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company.
Credit Risk
Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. As of December 31, 2025, substantially all of the Company’s cash was held at Erasl Bank, which is licensed to operate by the Saudi Central Bank, and which management believes is of medium credit quality.
The ongoing coronavirus pandemic that surfaced in China and is spreading throughout the world has had a material adverse effect on the Company’s industry and the markets in which it operates. The Company’s revenues and workforce are concentrated in China. The pandemic has caused its customers to take longer time to make payments, which subjects it to increased credit exposures.
For the credit risk related to trade accounts receivable, the Company performs ongoing credit evaluations of its clients and, if necessary, maintains reserves for potential credit losses. Historically, such losses have been within management’s expectations.
Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
With the exception of Items 12.D.3 and 12.D.4, this Item 12 is not applicable for annual reports on Form 20-F. As to Items 12.D.3 and 12.D.4, this Item 12 is not applicable, as the Company does not have any American Depositary Shares.
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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
See “Item 10. Additional Information” for a description of the rights of securities holders, which remain unchanged.
Use of Proceeds
The following “Use of Proceeds” information relates to the Registration Statement on Form F-1, in relation to our initial public offering of 2,750,000 Class A Ordinary Shares. The Class A Ordinary Shares were sold at an offering price of $4.00 per share, generating gross proceeds of approximately $11.0 million, and net proceeds of approximately $9.2 million.
We have earmarked and have been using the proceeds of the initial public offering as follows: (i) 30% of the proceeds for personnel training and recruitment of qualified personnel; (ii) 20% for system improvement, building online platforms for future online courses; (iii) 10% for enhancement of brand recognition through multi-channel marketing; (iv) 30% for mergers and acquisitions within the industry; and (v) 10% for general corporate purposes and working capital, including potential strategic investments and acquisitions.
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 our 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 CEO and CFO concluded that our disclosure controls and procedures as of December 31, 2025 were not effective at the reasonable assurance level due to the material weakness described below.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025. The assessment was based on criteria established in the framework Internal Control—Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that, as of December 31, 2025, our internal control over financial reporting was not effective due to the existence of the following significant deficiencies and material weaknesses: (i) inadequate segregation of duties for certain key functions due to limited staff and resources; (ii) lack of documented policies and controls (including IT controls and cybersecurity framework) which enable management and other personnel to understand and carry out their internal control responsibilities; (iii) lack of a formal internal audit function to establish a formal risk assessment process and internal control framework; and (iv) lack of accounting staff and resources with appropriate knowledge of generally accepted accounting principles in the United States (“U.S. GAAP”) and SEC reporting and compliance requirements.
To remediate the material weakness and significant deficiency described above, we plan to undertake the following actions: (i) hiring more qualified staff to fill up the key roles in the operations; (ii) setting up a financial and system control framework with formal documentation of polices and controls in place; and (iii) hiring additional qualified financial professionals such as corporate controller familiar with U.S. GAAP to increase the number of qualified financial reporting personnel and monitor daily transaction recording and general ledger work.
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As defined under standards established by the Public Company Accounting Oversight Board, 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 the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Attestation Report of the Registered Public Accounting Firm
We did not include an attestation report of the company’s registered public accounting firm in this annual report on Form 20-F due 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 those disclosed 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.
Item 16. [RESERVED]
Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our Board of Directors has determined that Zhanlin Liao is an audit committee financial expert as that term is defined in Item 16A(b) of Form 20-F, and “independent” as that term is defined in the Nasdaq listing standards.
Item 16B. CODE OF ETHICS
Our Board has adopted a code of business conduct and ethics that applies to our directors, officers and employees.
Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Effective on December 28, 2025, Tang Qian & Associates, PLLC (PCAOB ID: 7080)(“Tang Qian & Associates”) resigned from its position as the independent registered public accounting firm for the Company. Upon the approval of the board of directors, the Company appointed Li CPA LLC (PCAOB ID: 7093) (“Li CPA”) to serve as its independent registered public accounting firm for the year ended December 31, 2025
The following table represents the approximate aggregate fees for services rendered for the periods indicated:
| December 31, 2024 | December 31, 2025 | |||||||
| USD | USD | |||||||
| Audit Fees | $ | 180,000 | $ | 180,000 | ||||
| Tax Fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total Fees | $ | 180,000 | $ | 180,000 | ||||
“Audit fees” are the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit and are not reported under audit fees. These fees primarily include accounting consultations regarding the accounting treatment of matters that occur in the regular course of business, implications of new accounting pronouncements and other accounting issues that occur from time to time.
“Tax fees” include fees for professional services rendered by our independent registered public accounting firm for tax compliance and tax advice on actual or contemplated transactions.
“Other fees” include fees for services rendered by our independent registered public accounting firm with respect to government incentives and other matters.
The policy of our audit committee is to pre-approve all audit and non-audit services provided by our independent auditor including audit services, audit-related services, tax services and other services.
Our Audit Committee evaluated and approved in advance the scope and cost of the engagement of an auditor before the auditor rendered its audit and non-audit services.
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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
On December 11, 2023, the Company, upon the approval of the board of directors of the Company (the “Board”) Board of the Company and the audit committee of the Board (the “Audit Committee”), dismissed Marcum Asia CPAs LLP, the former independent registered public accounting firm of the Company and appointed Onestop Assurance PAC (“Onestop”) (PCAOB ID: 6732) to serve as its independent registered public accounting firm for the year ended December 31, 2023.
On September 25, 2024, the Company, upon the approval of the Board of the Company and the audit committee of the Board, dismissed Onestop, the former independent registered public accounting firm of the Company and appointed Tang Qian & Associates to serve as its independent registered public accounting firm for the year ended December 31, 2024.
Effective on December 28, 2025, Tang Qian & Associates resigned from its position as the independent registered public accounting firm for the Company. Upon the approval of the board of directors, the Company appointed Li CPA LLC (PCAOB ID: 7093) (“Li CPA”) to serve as its independent registered public accounting firm for the year ended December 31, 2025
Tang Qian & Associates’ reports on the Company’s financial statements for the fiscal year ended December 31, 2024 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles. Furthermore, during the Company’s most recent fiscal year, there were no disagreements with Tang Qian & Associates on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Tang Qian & Associates, would have caused Tang Qian & Associates to make reference to the subject matter of the disagreements in connection with its reports on the Company’s financial statements for such year. Also, during this time, there were no “reportable events,” as defined in Item 304(a)(1)(v) of Regulation S-K.
The Company provided Tang Qian & Associates with a copy of the above disclosure and requested that Tang Qian & Associates furnish the Company with a letter addressed to the U.S. Securities and Exchange Commission stating whether or not it agrees with the above statements.
During the two most recent fiscal years and any subsequent interim periods prior to the engagement of Li CPA, neither the Company, nor someone on behalf of the Company, has consulted Li CPA regarding (i) the application of accounting principles to any specified transaction, either completed or proposed or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided to the Company that Li CPA concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement,” as defined in Item 304(a)(1)(iv) of Regulation S-K, or a “reportable event,” as defined in Item 304(a)(1)(v) of Regulation S-K, or any other matters set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
98
Item 16G. CORPORATE GOVERNANCE
We are incorporated in Cayman Islands and our corporate governance practices are governed by applicable law of Cayman Islands, our amended and restated memorandum and articles of association. In addition, because our common shares are listed on the Nasdaq Capital Market, we are subject to Nasdaq’s corporate governance requirements.
As a foreign private issuer, we are permitted, in lieu of certain requirements of the Nasdaq Rules and subject to certain exceptions, to follow the practices of our home country, which for the purpose of such rules is the Cayman Islands, pursuant to the home country rule exemption set forth under Nasdaq Rules 5615(a)(3).
We elected to be exempt from the requirements under Nasdaq Rules 5635. Nasdaq Rules 5635 generally provides that shareholder approval is required prior to issuance (or potential issuance) of securities in relation to (i) the acquisition of the stock or assets of another company; (ii) a change of control, (iii) the establishment or amendment of certain equity based compensation plans and arrangements; and (iv) transactions other than public offerings whereby there is a 20% Issuance at a price that is less than the Minimum Price, as defined in Nasdaq Rules 5635(d). Our Cayman Islands counsel, Ogier, has provided a letter to Nasdaq certifying that under Cayman Islands law and our amended and restated memorandum and articles of association, we are not prohibited from issuing securities without first obtaining shareholder approval where such issuance of securities otherwise requires shareholder approval under Nasdaq Rules 5635.
We also elected to be exempted from Nasdaq Rule 5620(a), pursuant to which companies listed on NASDAQ are required to hold an annual general meeting no later than one year after the end of the fiscal year-end. Our Cayman Islands counsel, Ogier, has provided a letter to Nasdaq certifying that under Cayman Islands law and our amended and restated memorandum and articles of association, we are not prohibited from not holding an annual general meeting within one year after the end of the fiscal year-end.
See “Item 6. Directors, Senior Management and Employees” for more information.
Item 16H. MINE SAFETY DISCLOSURE
Not applicable.
Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
Item 16J. INSIDER TRADING POLICIES
On May 12, 2023, we
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Item 16K. CYBERSECURITY
Risk Management and Strategy
To maintain a consistently high level of service
experience for our clients, preserve the confidentiality, integrity, and availability of our information systems, safeguard our assets,
data, intellectual property, and network infrastructure, while meeting regulatory requirements, it is crucial to effectively manage cybersecurity
risks. To achieve this,
Our dedicated cybersecurity staff is tasked with assessing, identifying and managing risks related to cybersecurity threats and, under the leadership of our chief operating officer, is responsible for:
| ● | risk assessments designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise IT environment; |
| ● | development of risk-based action plans to manage identified vulnerabilities and implementation of new protocols and infrastructure improvements; |
| ● | cybersecurity incident investigations; |
| ● | monitoring threats to sensitive data and unauthorized access to our systems; |
| ● | secure access control measures applied to critical IT systems, equipment and devices, designed to prevent unauthorized users, processes, and devices from assessing IT systems and data; |
| ● | developing and executing protocols to ensure that information regarding cybersecurity incidents is promptly shared with the board of directors, as appropriate, to allow for risk and materiality assessments and to consider disclosure and notice requirements; and |
| ● | developing and implementing training on cybersecurity, information security and threat awareness. |
Governance
Our
If a cybersecurity incident occurs, our cyber security team will promptly organize personnel for internal assessment. If it is further determined that the incident could potentially be a material cybersecurity event, our cyber security team will promptly report the incident and assessment results to our head of information technology and cybersecurity functions, and, to the extent appropriate, involve external legal counsels to provide advice. Our management shall prepare disclosure material on the cybersecurity incident for review and approval by our board of directors before it is disseminated to the public.
100
Part III
Item 17. FINANCIAL STATEMENTS
We have elected to provide financial statements pursuant to Item 18.
Item 18. FINANCIAL STATEMENTS
The consolidated financial statements of Top KingWin Ltd, and its subsidiaries are included at the end of this Annual Report, beginning with page F-1.
Item 19. EXHIBITS
EXHIBIT INDEX
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| * | Filed herewith. |
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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 Annual Report on its behalf.
| Top KingWin Ltd | ||
| By: | /s/ Ruilin Xu | |
| Name: | Ruilin Xu | |
| Title: | Chief Executive Officer (Principal Executive Officer) | |
| Dated: | April 8, 2026 | |
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TOP KINGWIN LTD
FINANCIAL STATEMENTS
TABLE OF CONTENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
of Top KingWin Ltd:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Top KingWin Ltd (the “Company”) as of December 31, 2025, the related consolidated statements of loss and comprehensive loss, changes in shareholders’ equity and cash flows for the year 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 the results of its operations and its cash flows for the year 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 audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.
/s/ LI CPA LLC
We have served as the Company’s auditor since 2025.
Aurora Colorado
April 8, 2026
PCAOB ID Number 7093
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
of Top KingWin Ltd:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Top KingWin Ltd (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of loss and comprehensive loss, changes in shareholders’ equity and cash flows for each of the three years ended December 31, 2024, 2023 and 2022, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years ended December 31, 2024, 2023 and 2022, 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 audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.
/s/
We have served as the Company’s auditor since 2024.
April 17, 2025
PCAOB ID Number
F-3
TOP KINGWIN LTD
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2025 AND 2024
(In USD)
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Accounts receivable, related parties | ||||||||
| Prepayments | ||||||||
| Other receivables | ||||||||
| Total current assets | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Other non-current assets | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable-related parties | ||||||||
| Operating lease liabilities - current | ||||||||
| Advance from clients | ||||||||
| Due to related parties | ||||||||
| Taxes payable | ||||||||
| Bonds Payable-short term | ||||||||
| Accruals and other payables | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities - 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 | ||||||||
| Accumulated deficits | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
| The Company completed a 25-for-1 share consolidation of its Class A and Class B ordinary shares on May 5, 2025 and September 8, 2025, respectively. |
The accompanying notes are an integral part of these consolidated financial statements.
F-4
TOP KINGWIN LTD
CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME
FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023
(In USD)
| 2025 | 2024 | 2023 | ||||||||||
| REVENUES | ||||||||||||
| -- Third parties | $ | $ | $ | |||||||||
| -- Related parties | ||||||||||||
| COST OF REVENUES | ||||||||||||
| -- Third parties | ( | ) | ( | ) | ( | ) | ||||||
| -- Related parties | ( | ) | ( | ) | ||||||||
| ( | ) | ( | ) | ( | ) | |||||||
| GROSS PROFIT | ||||||||||||
| OPERATING EXPENSES | ||||||||||||
| Selling expenses | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ||||||
| (LOSS) INCOME FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ||||||
| OTHER INCOME, NET | ||||||||||||
| Other income | ||||||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ||||||
| Total other income, net | ( | ) | ||||||||||
| NET LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | ( | ) | ( | ) | ( | ) | ||||||
| Income tax expenses | ( | ) | ( | ) | ||||||||
| NET LOSS FROM CONTINUING OPRATIONS ATTRIBUTABLE TO THE COMPANY’S SHAREHOLDERS | ( | ) | ( | ) | ( | ) | ||||||
| DISCONTINUED OPERATIONS | ||||||||||||
| Net income from discontinued operations | ( | ) | ||||||||||
| Income tax expenses from discontinued operations | ||||||||||||
| NET (LOSS) INCOME FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO THE COMPANY’S SHAREHOLDERS | ( | ) | ||||||||||
| NET LOSS | ( | ) | ( | ) | ( | ) | ||||||
| Other comprehensive loss | ||||||||||||
| Foreign currency translation loss | ( | ) | ( | ) | ||||||||
| TOTAL COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Basic and diluted (loss) earnings per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Weighted average number of common shares outstanding - basic and diluted* | ||||||||||||
| The Company completed a 25-for-1 share consolidation of its Class A and Class B ordinary shares on May 5, 2025 and September 8, 2025, respectively. |
The accompanying notes are an integral part of these consolidated financial statements.
F-5
TOP KINGWIN LTD
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2025, 2024, and 2023
(In USD)
| Class A ordinary shares | Class B ordinary shares | Share subscription | Additional paid-in | Statutory | Retained | Accumulated other comprehensive | Total shareholders’ | |||||||||||||||||||||||||||||||||
| Shares* | Amount | Shares* | Amount | Receivables* | capital | reserve | earnings | income (loss) | equity | |||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Adoption of ASC 326 | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Capital Contribution | - | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Capital Contribution | - | |||||||||||||||||||||||||||||||||||||||
| Shares issued for equity compensation plan | - | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Capital Contribution | - | |||||||||||||||||||||||||||||||||||||||
| Shares issued for equity compensation plan | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| The Company completed a 25-for-1 share consolidation of its Class A and Class B ordinary shares on May 5, 2025 and September 8, 2025, respectively. |
The accompanying notes are an integral part of these consolidated financial statements.
F-6
TOP KINGWIN LTD
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023
(In USD)
| 2025 | 2024 | 2023 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Net loss from discontinued operations | ( | ) | ||||||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | ( | ) | ||||
| Adjustments to reconcile net income to cash (used in) provided by operating activities: | ||||||||||||
| Provision for doubtful accounts | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Finance expenses | ||||||||||||
| Non-cash operating lease expenses | ( | ) | ( | ) | ||||||||
| Loss from the disposal of property and equipment | ( | ) | ||||||||||
| Gain on early termination of operating lease contract | ( | ) | ||||||||||
| Foreign exchange loss (gain) | ( | ) | ( | ) | ||||||||
| Deferred tax expenses (benefit) | ||||||||||||
| Share-based compensation expenses | ||||||||||||
| Loss from impairment of Goodwill | ||||||||||||
| Investment income | ||||||||||||
| Changes in assets and liabilities | ||||||||||||
| Accounts receivable | ( | ) | ( | ) | ( | ) | ||||||
| Other receivables | ( | ) | ||||||||||
| Prepayments | ( | ) | ( | ) | ||||||||
| Accounts receivable - related party | ( | ) | ||||||||||
| Due from related parties | ||||||||||||
| Other non-current assets | ( | ) | ||||||||||
| Accounts payable | ||||||||||||
| Accruals and other payables | ||||||||||||
| Deferred revenue | ( | ) | ( | ) | ||||||||
| Accounts payable - related party | ( | ) | ( | ) | ||||||||
| Due to related parties | ( | ) | ||||||||||
| Taxes payable | ( | ) | ( | ) | ||||||||
| Operating lease liabilities | ( | ) | ||||||||||
| Net cash used in operating activities, continuing operations | ( | ) | ( | ) | ( | ) | ||||||
| Net cash (used in) provided by operating activities, discontinued operations | ||||||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||||||
| Acquisition of subsidiaries | ( | ) | ||||||||||
| Proceeds from disposal of subsidiaries | ||||||||||||
| Net cash provided by (used in) investing activities from continuing operations | ( | ) | ||||||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||||||
| Cash flows from financing activities | ||||||||||||
| IPO proceeds net of deferred offering cost | ||||||||||||
| Due to related parties | ( | ) | ||||||||||
| Proceeds from issuance of convertible notes | ||||||||||||
| Cash paid for stock issuance costs | ( | ) | ||||||||||
| Proceeds from capital contribution | ||||||||||||
| Net cash provided by financing activities from continuing operations | ||||||||||||
| Net cash provided by financing activities | ||||||||||||
| Effect of exchange rates on cash | ( | ) | ( | ) | ( | ) | ||||||
| Net increase (decrease) in cash and restricted cash | ( | ) | ||||||||||
| Cash and restricted cash at beginning of year | ||||||||||||
| Cash and restricted cash at end of year | $ | $ | $ | |||||||||
| Cash at end of year from continuing operations | $ | $ | $ | |||||||||
| Restricted cash at end of year from continuing operations | ||||||||||||
| Cash at end of year from discontinued operations | ||||||||||||
| Cash and restricted cash at end of year | $ | $ | $ | |||||||||
| Supplemental disclosure information | ||||||||||||
| Cash paid for income tax | $ | $ | $ | |||||||||
| Supplemental disclosure of non-cash financing activities: | ||||||||||||
| Operating lease asset obtained in exchange for operating lease obligation | $ | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-7
TOP KINGWIN LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31 2025 AND 2024
(In USD)
Note 1 - ORGANIZATION AND BUSINESS
Top KingWin Ltd and its consolidated subsidiaries (collectively referred to as the “Group” or the “Company”) primarily provide three main corporate services—corporate business training, corporate consulting, and advisory and transaction services—along with sales of devices to support AI data collection and analysis and sales of robots, to clients in the People’s Republic of China (the “PRC”).
Top KingWin Ltd (referred to as “KingWin”) is a holding company incorporated in the Cayman Islands on February 16, 2022, under the laws of the Cayman Islands. The Company has no substantial operations other than holding all of the outstanding share capital of Sky KingWin Ltd (referred to as “KingWin BVI”), established under the laws of the British Virgin Islands on March 15, 2022. KingWin BVI is also a holding company, holding all of the outstanding equity of SKY KINGWIN (HK) LIMITED (referred to as “KingWin HK”), which was incorporated in Hong Kong on April 19, 2022. KingWin HK is a holding company holding all of the outstanding equity of Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. (referred to as “Tiancheng Jinhui”), established on October 25, 2018, under the laws of the PRC.
On December 20, 2023, Sky KingWin Ltd entered
into an agreement to acquire Industry Insights Consulting Ltd from Future Scope Advisors Ltd and Visionary Strategies Ltd for $
Reorganization
A reorganization of the Company’s legal
structure was completed on July 1, 2022, the former shareholders transferred their
The reorganization involved the incorporation
of KingWin, and its wholly owned subsidiaries, KingWin BVI, and KingWin HK; and the transfer of all equity ownership of Tiancheng Jinhui
to KingWin HK from the former shareholders of Tiancheng Jinhui. Following the transfer, the Company issued
As part of the reorganization, on January 10,
2023, the Company issued a total of
F-8
The transactions were between entities under common control, and therefore accounted for in a manner similar to the pooling-of-interest method. Under the pooling-of-interests method, combination between two businesses under common control is accounted for at carrying amounts with retrospective adjustment of prior period financial statements, and the equity accounts of the combining entities are combined and the difference between the consideration paid and the net assets acquired is reflected as an equity transaction (i.e., distribution to parent company). As opposed to the purchase method of accounting, no intangible assets were recognized in the transaction, and no goodwill was recognized as a result of the combination.
Private Placement
Top KingWin Ltd announced that it has entered
into certain securities purchase agreement to Purchaser a new series of convertible notes in the original principal amount up to $
On September 5, 2024, Top KingWin Ltd. entered
into a certain securities purchase agreement with
The principal subsidiaries through which the Company conducted its business operations as of December 31, 2025 are described below:
| Name of Entity | Background | Ownership | Principle activities | |||
| Sky Kingwin Ltd | KingWin ( | |||||
| SKY KINGWIN (HK) LIMITED | KingWin BVI ( | |||||
| Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. | KingWin HK ( |
F-9
| Guangdong Tiancheng Jinhui Enterprise Management Consulting Co., Ltd. | Tiancheng Jinhui ( | |||||
| Jiangsu Tiancheng Jinhui Enterprise Management Consulting Co., Ltd. | Tiancheng Jinhui ( | |||||
| Chongqing Tiancheng Jinhui Enterprise Management Consulting Co., Ltd. | Tiancheng Jinhui ( | |||||
| Shenzhen Tiancheng Chuangxin Technology Co., Ltd. (formerly known as “Shenzhen Tomorrow Innovation Core Technology Co., Ltd.”) | KingWin HK Incorporated on Aug 19, 2024 | |||||
| Guji Technology (Shenzhen) Co., Ltd. | Shenzhen Tiancheng Chuangxin Technology Co., Ltd. (100% Hold) Acquired on Aug 29, 2024 | |||||
| Top Kingwin Hi Tech lnc. | Sky Kingwin Ltd (100% Hold) Incorporated on March 6, 2025 | |||||
| Top Kingwin Technology Inc. | The United States of America (US) Company | Top KingWin Ltd. (100% Hold) Incorporated on February 23, 2025 |
F-10
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”).
Use of Estimates
The preparation of these consolidated financial statements requires management of the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates required to be made by management, include, but are not limited to, the assessment of a provision for doubtful accounts, the useful lives of property and equipment and intangible asset, and valuation of deferred tax assets. Actual results may differ from those estimates under different assumptions or conditions.
Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions have been eliminated upon consolidation.
A subsidiary is an entity in which (i) the Company
directly or indirectly controls more than
Fair value measurements
The Company applies ASC Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value, and expands financial statement disclosure requirements for fair value measurements.
ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability.
ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:
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. Unobservable inputs are valuation technique inputs that may reflect the Company’s own assumptions that cannot be corroborated with observable market data.
Management of the Company is responsible for considering the carrying amount of cash, restricted cash, accounts receivable, net, prepayments, other receivables, accounts receivable - related party, interest receivable - related party, accounts payable, operating lease liabilities -current, advance from clients, accounts payable - related party, due to related parties, taxes payable, and accruals and other payables based on the short-term maturity of these instruments to approximate their fair values because of their short-term nature.
F-11
Cash
Cash primarily consists of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains most of its bank accounts in the PRC.
Restricted Cash
According to the civil ruling (2023) Yue 0113 Cai Bao 865 issued on October 12, 2023, the plaintiff in this case is Guangzhou Boxin Technology Co., Ltd., and the defendant is Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd.
The case originated when the plaintiff filed
a pre-action property preservation application, freezing the defendant’s bank deposit of RMB
Subsequently, the two parties reached a reconciliation, and the plaintiff applied for the lifting of the preservation. On March 12, 2024, the court ruled to lift the freezing of the defendant’s bank deposit.
Adoption of ASU 326 (including continuing and discontinued operations)
On January 1, 2023, The Company adopted Accounting
Standards Update (“ASU”) No. 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments (“ASU 326”), using the modified retrospective transition method. ASU 326 replaces the existing incurred loss
impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, The
Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred
loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including
contract assets. The adoption of the guidance resulted in a cumulative-effect adjustment to decrease the opening balance of retained
earnings on January 1, 2023 by US$
Accounts receivable and allowance for doubtful accounts (including continuing and discontinued operations)
Prior to the Company’s adoption of ASU 326, accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when loss is probable. The Company determines the adequacy of a reserve for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company regularly reviews the adequacy and appropriateness of the allowance for doubtful accounts.
After the adoption of ASU 326, The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and contract assets and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the consolidated statements of comprehensive (loss) /income. The Company assesses collectability by reviewing accounts receivable and contract assets on a collective basis where similar characteristics exist, primarily based on similar business line, service or product offerings and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. 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.
F-12
Prepayments (including continuing and discontinued operations)
Prepayments primarily consist of the prepayments
to the service suppliers for the Company event hosting, planning, and execution. The Company maintains a provision for doubtful accounts
to state prepayments at their estimated realizable value based on a variety of factors, including the possibility of releasing the prepayments
into service, significant one-time events, and historical experience. As of December 31, 2025 and 2024, provision for doubtful accounts
was recognized in 2024, while an allowance equal to
Other Receivables (including continuing and discontinued operations)
Other receivables represent other receivables mainly include security deposits, employee loans, and advances for employee social insurance and housing funds as well as prepayments of corporate income tax, which normally includes insignificant receivable amounts.
Property and Equipment, net (including continuing and discontinued operations)
Property and equipment are stated at cost less
accumulated depreciation and depreciated on a straight-line basis over the estimated useful lives of the assets. Cost represents the
purchase price of the asset and other costs incurred to bring the asset into its existing use. The cost of repairs and maintenance is
expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated
depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition.
| Estimated useful lives (years) | ||||
| Leasehold improvement | ||||
| Vehicle | ||||
| Office equipment | ||||
| Electronic equipment | ||||
Intangible Assets, net (including continuing and discontinued operations)
Intangible assets are stated at cost less accumulated
amortization and amortized in a method which reflects the pattern in which the economic benefits of the intangible asset are expected
to be consumed or otherwise used up. The balance of intangible assets represents a production copyright that the Company purchased externally
and is amortized straight- line over
The estimated useful lives of the Company’s intangible assets are listed below:
| Estimated useful lives (years) | ||
| Copyright | ||
| Patent | ||
| Trademarks | ||
| Software |
Impairment of Long-lived Assets (including continuing and discontinued operations)
Long-lived assets, including property and equipment with finite lives and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the non-discounted future cash flows generated from the assets and recognizes an impairment loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values.
F-13
Lease (including continuing and discontinued operations)
Before adopted ASC 842, a lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. The Company records the total expenses on a straight-line basis over the lease term.
On January 1, 2020, The Company adopted ASC 842, Leases (ASC 2016-02), using the modified retrospective transition method and used an effective date of as the date of initial application. As a result, the comparative periods were not restated. The Company has elected the package of practical expedients permitted which allows The Company not to reassess the following at adoption date: (i) whether any expired or existing contracts are or contains a lease, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases (i.e. whether those costs qualify for capitalization under ASC 842).
The Company determines whether an arrangement is or contains a lease at inception. The Company’s accounting policy effective on the adoption date of ASC 842 is as follows:
Operating lease as Lessee
The Company classifies a lease as a financing lease when the lease meets any one of the following criteria at lease commencement:
| (a). | The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. | |
| (b). | The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. | |
| (c). | The lease term is for a major part of the remaining economic life of the underlying asset. |
The Company classifies a lease as a financing lease when the lease meets any one of the following criteria at lease commencement (continued):
| (d). | The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset. | |
| (e). | The underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term. |
When none of the criteria are met, The Company classifies a lease as an operating lease.
For operating leases, The Company records a lease liability and corresponding right-of-use (ROU) asset at lease commencement. Lease terms are based on the non-cancellable term of the lease and may contain options to extend the lease when it is reasonably certain that The Company will exercise the option. Lease liabilities represent the present value of the lease payments not yet paid, discounted using the discount rate for the lease at lease commencement.
The Company estimates its incremental borrowing rate for its leases at the commencement date to determine the present value of future lease payments when the implicit rate is not readily determinable in the lease. In estimating its incremental borrowing rate, The Company considers its credit rating and publicly available data of borrowing rates for loans of similar amount, currency and term as the lease.
Operating leases are presented as “Operating lease ROU assets” and “Operating lease liabilities”. Lease liabilities that become due within one year of the balance sheet date are classified as current liabilities. At lease commencement, operating lease ROU assets represent the right to use underlying assets for their respective lease terms and are recognized at amounts equal to the lease liabilities adjusted for any lease payments made prior to the lease commencement date, less any lease incentives received, and any initial direct costs incurred by The Company.
F-14
After lease commencement, operating lease liabilities are measured at the present value of the remaining lease payments using the discount rate determined at lease commencement. Operating lease ROU assets are measured at the amount of the lease liabilities and further adjusted for prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs and impairment of the ROU assets, if any. Operating lease expense is recognized as a single cost on a straight-line basis over the lease term.
The Company elected the package of practical expedients permitted under the transition guidance to combine the lease and non-lease components as a single lease component for operating lease associated with the Company’s office space lease, and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term.
As of December 31, 2025, the Company has one operating lease for office, including an option to renew which is at the Company’s sole discretion. The renewal to extend the lease term is not included in the Company’s ROU assets and operating lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal option, and, when it is reasonably certain of exercise, the Company will include the renewal period in its lease term. New lease modifications result in re-measurement of the ROU assets and operating lease liabilities. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants.
ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived non-financial assets.
ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU assets are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.
The Company recognized impairment loss of ROU assets as of December 31, 2025 and 2024.
The operating lease is included in operating lease right-of-use assets, operating lease liabilities-current and operating lease liabilities-non-current on the consolidated balance sheets.
Revenue Recognition (including continuing and discontinued operations)
The following five steps are applied to achieve the core principle of the new revenue standard: (i) identify contract(s) with a client; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation.
The Company’s revenues are recognized when persuasive evidence of an arrangement exists, service has occurred, and all performance obligations have been performed pursuant to the terms of the agreement, the sales price is fixed or determinable and collectability is reasonably assured. The Company revenue agreements generally do not include a right of return in relation to the delivered products or services. Depending on the terms of the agreement and the laws that apply to the agreement, service obligations may be delivered over time or at a point in time. Control of the services is transferred over time if the Company’s performance:
| - | provides all of the benefits received and consumed simultaneously by the client; |
| - | creates and enhances an asset that the client controls as the Company performs; or |
| - | does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance complete to date. |
F-15
If control of services transfers over time, revenue is recognized over the period of the agreement by reference to progress toward complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the client obtains control of the services.
The Company currently generates its revenue from the following main sources:
Revenues from advisory and transaction services
The Company deliver packaged advisory and transaction services to help design a financial plan, build up and maintain the corporate image of our clients, connect clients with potential investors, and present its client to the interested investors. Revenues from advisory and transaction services represent service fees associated with private fundraising transactions, which are recognized on net basis. The service fees were charged based on a certain percentage of the fund raised by the clients, which were only payable upon the completion of fundraising. The revenues are the amount of consideration to which the Company expects to be entitled in complete the fundraising transactions, the only performance obligation of the service. Revenue is recognized at the point when the advisory services have been conducted and the underlying fundraising transactions are completed under the terms of the respective contract. Payment term of advisory and transaction services is three days when the performance obligation completed.
Revenues from corporate consulting services
The Company provides a combination of corporate consulting services that are bundled and customized to fulfill each client’s unique financial needs. The corporate consulting services include various specific services (e.g., due diligence service, business plans, financing solutions). The Company charged a fixed price for a specific service and revenue is recognized when the Company completes the specific services agreed upon in the contract. Each of the specific services is considered as one performance obligation. Each performance obligation is independent to each other with specific price identified in the contract and the clients could contract with the Company for any one of the specific services. Since clients can cancel each specific service before it is delivered without any penalty, the Company does not have an enforceable right to payment from the client, and thus the services and prices are excluded from the contract until the individual specific service starts or advance payment is received. Before the full and complete delivery of the services, the clients cannot benefit from the performance and cannot control the work in progress. The Company control the rights to the services, and the services can easily be redirected to another client without incurring significant costs. As a result, the revenues do not meet the criteria of recognizing revenue over time, and such services shall only be useful to the client after delivered in full. The revenue is therefore recognized at the point in time when the deliverables, in the form of reports are delivered based on the specific terms of the contract.
Revenues from corporate business training services
Revenues from corporate business training services consist of two types (i) training fees and (ii) set-up fees. Each type of the training services is considered as one performance obligation. Each performance obligation is independent to each other, and its clients could contract with the Company for any one of the training services.
| (i) | Training fees |
The Company provides corporate business training services through diversified courses. The courses are provided in a short-term period. The revenue is recognized when the courses are fully delivered. Training fees are collected before providing any service and is recorded as advances from clients.
| (ii) | Set-up fees |
The Company offers referral and marketing service companies set-up services. The Company helps the referral and marketing service companies familiarize themselves with the training and conduct the business in a short period. Thereafter, the referral and marketing service companies have the right to promote the corporate business training services for the Company. A new partner is required to pay a non-refundable set-up fee. Any fees charged to the referral and marketing service companies for the set-up activities are recognized as revenue at the point in time when the set-up services have been completed and the Company has the right to bill the referral and marketing service companies.
F-16
Revenues from sales of devices to support AI data collection and analysis
The company entered the AI-related industry in 2024, focusing on enterprise-level AI solutions. It primarily provides smartwatches, laptops, and mobile devices to support AI data collection and analysis. With respect to the hardware sales contract, according to ASC 606-10-25-30, the company determine that the sales of our products is achieved when the customers sign on the delivery note as confirmation of the receipt of our products.
Revenues from sales of robots
In 2025, we launched a new business segment selling AI robots. As of
December 31, 2025, it recognized $
Revenues from others
Revenue from others is mainly derived from the small amount from referral services. The revenue from referral services is recognized at the point when both parties are satisfied with the performance obligation that agreed and signed on the contract.
Practical expedients
Cost to obtain a client – the Company pays certain costs to obtain a client contract such as commissions. As the Company’s client contracts have a contractual term of one year or less, it has elected to apply the practice expedient and expense these costs in profit or loss as incurred.
The Company currently generates its revenue from the following table presents revenues by service categories for the year ended December 31, 2025 and 2024, respectively:
| Years ended December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Service Category | $ | % of revenues | $ | % of revenues | ||||||||||||
| Advisory and transaction services | % | % | ||||||||||||||
| Corporate business training services | % | % | ||||||||||||||
| Corporate consulting services | % | % | ||||||||||||||
| Revenues from sales of devices to support AI data collection and analysis | % | % | ||||||||||||||
| Revenue from sales of robots | % | |||||||||||||||
| Others | % | % | ||||||||||||||
| Total revenues from continuing operations | % | % | ||||||||||||||
| Total revenues from discontinued operations | % | % | ||||||||||||||
| Total revenues | % | % | ||||||||||||||
Timing of revenue recognition
| For the Years ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Point in Time | $ | $ | ||||||
| Over Time | ||||||||
| Total Revenue | $ | $ | ||||||
The major customers which individually contributed more than 10% of total revenue of The Company for the years ended December 31, 2025 and 2024 are listed as below*:
| For
the Years ended December 31, |
||||||||
| 2025 | 2024 | |||||||
| Customer A | % | % | ||||||
| Customer B | % | % | ||||||
| Customer C | % | % | ||||||
| Customer D | % | % | ||||||
| * |
F-17
Advance from clients
Advance from clients is the amount that will be invoiced and recognized as revenue in future periods, at a point in time, when the Company completes its performance obligations.
Changes in advance from clients as follows:
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Advance from clients, beginning of the period | $ | $ | $ | |||||||||
| Revenue deferred during the period | ||||||||||||
| Recognition of revenue deferred in prior periods | ( | ) | ( | ) | ( | ) | ||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||
| Subtotal | ||||||||||||
| Less: advanced from clients of disposal subsidiaries | ||||||||||||
| Advance from clients, end of the period | $ | $ | $ | |||||||||
Advance from clients is mainly consists of the fee for corporate consulting services and corporate business training services.
Cost of Revenues (including continuing and discontinued operations)
The Company’s service costs primarily include (1) referral fees paid to agent companies for the recommendation of potential clients, (2) service fees paid to outsourcing providers, and (3) commission fees of service personnel paid to third parties and the Company’s staff.
Income Tax (including continuing and discontinued operations)
The Company accounts for income taxes under ASC 740. Current income taxes are provided based on net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2019 to 2025 are subject to examination by any applicable tax authorities.
F-18
Value Added Tax (“VAT”) (including continuing and discontinued operations)
The Company was subject to VAT at the rate of
And according to the Announcement of the Ministry
of Finance and the State Taxation Administration on the Preferential Value-Added Tax Policy for Small-Scale Taxpayers (2023 No. 19) stipulates
in Article 2 that for small-scale value-added taxpayers who apply a tax rate of
Foreign Currency Translation and Transaction (including continuing and discontinued operations)
The reporting currency of the Company is the USD. Tiancheng Jinhui conducts its business in the local currency, Chinese Yuan (“RMB”), as its functional currency. Except for Tiancheng Jinhui, the Company and its subsidiaries in Cayman Islands, BVI and HK use USD as its functional currency. An entity’s functional currency is the currency of the primary economic environment in which it operates; normally, that is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter- company transactions and arrangements.
Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Gains and losses resulting from foreign currency re-measurement are included in the consolidated statements of income and comprehensive (loss) income.
The consolidated financial statements are presented in USD. Assets and liabilities are translated into USD at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Shareholders’ equity accounts, except for the change in retained earnings, are translated using the historical exchange rates at the date of entry to shareholder equity; the change in retained earnings uses historical exchange rates of each period’s statement of income. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive (loss) income in the consolidated balance sheets.
Translation of amounts from RMB into USD has been made at the following exchange rates from Board of Governors of the Federal Reserve System:
| Balance sheet items, except for equity accounts | |
| December 31, 2025 | RMB |
| December 31, 2024 | RMB |
| December 31, 2023 | RMB |
| December 20, 2023 | RMB |
| Statement of income and loss, and cash flows items | |
| For the year ended December 31, 2025 | RMB |
| For the year ended December 31, 2024 | RMB |
| For the year ended December 31, 2023 | RMB |
| For the period from December 20, 2023 to December 31, 2023 | RMB |
F-19
Earnings (loss) Per Share (“EPS”)
The Company computes earnings per share (EPS) in accordance with ASC 260, Earnings per Share (ASC 260). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. The Company has no dilutive effect due to net loss as of and for the years ended December 31, 2025, 2024 and 2023.
Employee Benefit (including continuing and discontinued operations)
The Company is required under PRC laws and regulations 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 its employees up to a maximum amount specified by the local government from time to time at locations where the Company operates its businesses.
Statutory Reserve (including continuing and discontinued operations)
In accordance with the PRC Regulations on Enterprises
with Foreign Investment and its articles of association, a foreign-invested enterprise established in the PRC is required to provide
certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated
from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at
least
Comprehensive (loss) income
Comprehensive (loss) income consists of two components, net (loss) income and other comprehensive (loss) income. The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to USD is reported in other comprehensive (loss) income in the consolidated statements of (loss) income and comprehensive (loss) income.
Related Parties (including continuing and discontinued operations)
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management, and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions in Note 11.
Business Combinations
The Company accounts for all business combinations under the purchase method of accounting in accordance with ASC Topic 805, Business Combinations (“ASC 805”). The purchase method of accounting requires that the consideration transferred to be allocated to net assets including separately identifiable assets and liabilities the Company acquired, based on their estimated fair value. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of the cost of the acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the identifiable net assets of the acquiree, the difference is recognized directly in the consolidated statements of comprehensive(loss)/ income. The Company adopted Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 802): Clarifying the Definition of a Business, in determining whether it has acquired a business from January 1, 2023 on a prospective basis and there was no material impact on the consolidated financial statements.
F-20
The determination and allocation of fair values to the identifiable net assets acquired, liabilities assumed and noncontrolling interest is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the acquiree’s current business model and industry comparisons. Terminal values are based on the expected life of assets and forecasted cash flows over that period. Acquisition-related costs are recognized as general and administrative expenses in the consolidated statements of comprehensive (loss) income as incurred. Although the Company believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from forecasted amounts and the differences could be material.
Acquisitions that do not meet the accounting definition of a business combination are accounted for as asset acquisitions. For transactions determined to be asset acquisitions, the Company allocates the total cost of the acquisition, including transaction costs, to the assets acquired based on their relative fair values.
Goodwill
Goodwill represents the excess of the consideration
over the fair value of the net assets acquired at the date of acquisition. Goodwill is not amortized but rather tested for impairment
at least annually at the reporting unit level by applying a fair-value based test in accordance with accounting and disclosure requirements
for goodwill. This test is performed by management annually or more frequently if the Company believes impairment indicators are present.
Goodwill was allocated
In performing quantitative impairment test, the Company compares the carrying amount of the reporting unit to the fair value of the reporting unit based on estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, an impairment loss shall be recognized in an amount equal to that excess.
Impairment loss of $
Discontinued operations
The Company has adopted ASC Topic 205 “Presentation of Financial Statements” Subtopic 20-45, in determining whether any of its business component(s) classified as held for sale, disposed of by sale or other than by sale is required to be reported in discontinued operations. In accordance with ASC Topic 205-20-45-1, a discontinued operation may include a component of an entity or a group of components of an entity, or a business or non-profit activity. A disposal of a component of an entity or a group of components of an entity is required to 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 when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff).
As of December 30, 2024, The Company’s
stockholders approved the proposed sale (the “Disposition”) of institution investors, Bosera Asset Management Co., Ltd. for
a purchase price of $
Segment Reporting
The Company’s Chief Operating Decision
Maker (“CODM”) has been identified as the Chief Executive Officer, who reviews the consolidated results when making decisions
about resource allocation and assessing the Company’s overall performance. As a result, the Company has only
For the years ended December 31, 2025, 2024 and 2023, our segment operating results are consistent with our management’s analysis as described in Item 5.
F-21
Recent Accounting Pronouncements
The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company made the election to delay the adoption of new or revised accounting standards. As result of the election, the Company’s financial statements may not be comparable to companies that comply with public company effective dates.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, this ASU enhances interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. We adopted ASU 2023-07 during the year ended December 31, 2025.
In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326)”, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life, instead of when incurred. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, which amends Subtopic 326-20 (created by ASU No.2016-13) to explicitly state that operating lease receivables are not in the scope of Subtopic 326-20. Additionally, in April 2019, the FASB issued ASU No.2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”, in May 2019, the FASB issued ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief”, and in November 2019, the FASB issued ASU No. 2019-10, “Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates”, and ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, to provide further clarifications on certain aspects of ASU No. 2016-13 and to extend the nonpublic entity effective date of ASU No. 2016-13. The changes (as amended) are effective for the Company for annual and interim periods in fiscal years beginning after December 15, 2022. We adopted the ASU on January 1, 2023 and will apply the guidance prospectively.
In October 2020, the FASB issued ASU 2020-10, “Codification Improvements to Subtopic 205-10, presentation of financial statements”. The amendments in this Update improve the codification by ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements is codified in the disclosure section of the codification that reduce the likelihood that the disclosure requirements would be missed. The amendments also clarify guidance so that an entity can apply the guidance more consistently. Early application of the amendments is permitted for any annual or interim period which financial statements are available to be issued. The amendments in this Update should be applied retrospectively. An entity should apply the amendments at the beginning of the period that includes the adoption date. The adoption of this standard is not expected to have a significant impact on the Company.
Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of operations and comprehensive income and cash flows.
Note 3 - ACQUISITION AND DECONSOLIDATIONS OF SUBSIDIARIES
Acquisition of Industrial Insights Consulting LTD
In December 2023, Sky KingWin Ltd (referred to
as “Buyer”) entered into an agreement with Future Scope Advisors LTD, Visionary Strategies LTD, Mr. Zhiliang Hu and Ms. Li
Qian. This agreement allowed the Buyer to acquire
The acquisition of the
F-22
The purchase price allocation to assets acquired and liabilities assumed as of the date of acquisition was as follows:
| Amounts | ||||
| Cash acquired | $ | |||
| Accounts receivable, net | ||||
| Prepayments | ||||
| Other receivables, net | ||||
| Property and equipment, net | ||||
| Intangible assets, net | ||||
| Accounts payable | ( | ) | ||
| Accrued expenses and other payables | ( | ) | ||
| Goodwill | ||||
| Total consideration | $ | |||
Note 4 - Goodwill
The movement of the goodwill for the years ended December 31, 2025, 2024 and 2023 is as follows:
| Balance as of January 1, 2023 and December 31, 2022 | ||||
| Acquisition of Industrial Insights Consulting LTD | ||||
| Balance as of December 31, 2023 | $ | |||
| Impairment of goodwill in relation to Insights Consulting LTD | ( | ) | ||
| Balance as of December 31, 2024 | $ | |||
| Balance as of December 31, 2025 | $ |
Under ASC 350-20, a goodwill impairment loss is measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. The Company performed goodwill impairment test at the reporting unit level on an annual basis and between annual tests when an event occurs or circumstances change indicating the asset might be impaired.
After the business combination, the Company has
two reporting units. The Company performed qualitative assessments, evaluating all relevant factors in their totality per ASC 350-20,
since the financial performance and sales revenue from consulting services provided by Industrial Insights Consulting LTD and its subsidiaries
had fallen short of expectations. This assessment indicated that the fair value of the reporting unit was lower than its carrying value.
The impairment loss on goodwill for the years ended December 31, 2025, 2024, and 2023 was , $
Note 5 - Discontinued Operations
Disposal of Insights Consulting LTD and its subsidiaries
Due to uncertainty in the future of the business,
in December 2024, the Company sold all of its assets and liabilities related to the corporate consulting services of Insights Consulting
LTD and its subsidiaries with an effective date of December 31, 2024. The business was sold for cash consideration of $
F-23
Revenue and expenses related to all discontinued operations are detailed in the table below in US dollars:
| Year ended Dec 31, 2025 | Year ended Dec 31, 2024 | |||||||
| $ | $ | |||||||
| Revenue | ||||||||
| Cost of revenue | ( | ) | ||||||
| Selling expenses | ( | ) | ||||||
| General and administrative expenses | ( | ) | ||||||
| Other (expenses) income | ( | ) | ||||||
| Loss from disposal of discontinued operations | ( | ) | ||||||
| Income tax (expenses) benefit from continuing operations | ||||||||
| Results of discontinued operations | ( | ) | ||||||
Note 6 - ACCOUNTS RECEIVABLE, NET
Accounts receivable consists of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: provision for credit loss | ||||||||
| Subtotal | ||||||||
| Less: Accounts receivables, net from discontinued operations | ||||||||
| Account receivables, net | $ | $ | ||||||
The following table sets forth the movement of provision for doubtful accounts:
December 31, 2025 | December 31, 2024 | |||||||
| Beginning | $ | $ | ||||||
| Additions/ Recovery | ( | ) | ( | ) | ||||
| Exchange rate difference | ( | ) | ( | ) | ||||
| Balance | $ | $ | ||||||
F-24
Note 7 - PREPAYMENTS
Prepayments consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Prepayments for the services cost | $ | $ | ||||||
| Prepayments for the hardware devices | | | ||||||
| Less: Provision for credit loss | ( | ) | ||||||
| Prepayments for the services cost from discontinued operations | ( | ) | ||||||
| Total Prepayments for the services cost | ||||||||
Note 8 - OTHER RECEIVABLES
Other receivables consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Prepaid taxes | $ | $ | ||||||
| Others | ||||||||
| Proceeds from disposal of subsidiaries | ||||||||
| Subtotal | ||||||||
| Less: other receivable from discontinued operations | ||||||||
| Total other receivable | $ | $ | ||||||
Note 9 - PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Leasehold improvement | $ | $ | ||||||
| Vehicle | ||||||||
| Office equipment | ||||||||
| Electronic equipment | ||||||||
| Less: Accumulated depreciation | | |||||||
| Subtotal | ||||||||
| Less: property and equipment, net from discontinued operations | ||||||||
| Property and equipment, net | $ | $ | ||||||
The depreciation expenses for the year ended
December 31, 2025 was $
F-25
Note 10 - INTANGIBLE ASSETS, NET
Intangible assets, net, consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Copyrights | $ | $ | | |||||
| Patents | ||||||||
| Trademarks | ||||||||
| Software | ||||||||
| Less: Accumulated amortization | ||||||||
| Subtotal | ||||||||
| Less: Intangible assets, net from discontinued operations | ||||||||
| Intangible assets, net | $ | $ | ||||||
The amortization expenses for the year ended
December 31, 2025 was $
Note 11 - OTHER NON-CURRENT ASSETS
Other non-current assets consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Deposits for operating lease | $ | $ | ||||||
Note 12 - ACCRUALS AND OTHER PAYABLES
Accruals and other payables consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Salary payable | $ | $ | ||||||
| Others | ||||||||
| Subtotal | ||||||||
| Less: Accruals and other payables from discontinued operations | ||||||||
| Total accruals and other payables | $ | $ | ||||||
F-26
Note 13 - RELATED PARTY BALANCES AND TRANSACTIONS
Parties are considered to be related if one party
has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making
financial and operational decisions.
| Related Parties | Relationship with the Company | |
| Guangzhou Tiancheng Capital Management Group Co., Ltd. (“Tiancheng Capital”) | ||
| Mr. Ruilin Xu | ||
| Mr. Siqi Cao | ||
| Shenzhen CIC Consulting Co., Ltd. | ||
| Shenzhen Zhongtou Shunshi Investment Management Co.,Ltd. | ||
| Shenzhen Qianhai Jingwei Wisdom Investment Consultant Co.,Ltd. | ||
| Shenzhen Zhongtou Industrial Planning & Consulting Co.,Ltd. | ||
| Shenzhen Zhongtou Big Data Technology Co.,Ltd. | ||
| Ms. Li Qian | ||
| Shenzhen Zhongtou Industrial Treasure Network Co.,Ltd. | ||
| Mr. Zhiliang Hu | ||
| Shaanxi Tiancheng Jinhui Investment Co., Ltd. (Formally known as “Shaanxi Tiancheng Enterprise Management Consulting Co., Ltd.”) | ||
| Guangzhou Tianyi Technology Co., Ltd. (Formally known as “Tiancheng New Retail Investment Holding (Guangdong) Co., Ltd.”) |
F-27
1)
As of December 31, 2025 and 2024
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts payable-related party | ||||||||
| Guangzhou Tiancheng Capital Management Group Co., Ltd. | $ | $ | ||||||
| Due from related parties* | ||||||||
| Shenzhen CIC Consulting Co., Ltd. | $ | $ | ||||||
| Shenzhen Zhongtou Shunshi Investment Management Co. | ||||||||
| Shenzhen Zhongtou Big Data Technology Co. | ||||||||
| Shenzhen Zhongtou Industrial Treasure Network Co. | ||||||||
| Mr. Zhiliang Hu | ||||||||
| Subtotal | ||||||||
| Less: Total due from related parties from discontinued operations | ||||||||
| Total due from related parties | $ | $ | ||||||
| Due to related parties* | ||||||||
| Mr. Ruilin Xu (the Company’s Chief Executive Officer) | $ | $ | ||||||
| Infinity worldwide holding ltd | ||||||||
| Guangzhou Tiancheng Capital Management Group Co., Ltd. | ||||||||
| Mr. Zhiliang Hu | ||||||||
| Subtotal | ||||||||
| Less: Total due to related parties from discontinued operations | ||||||||
| Total due to related parties | $ | $ | ||||||
| * |
F-28
2) Related party transactions
For the years ended December 31, 2025, 2024 and 2023
| Name of related parties | December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||
| Revenues | ||||||||||||
| Guangzhou Tiancheng Capital Management Group Co., Ltd. | $ | $ | $ | |||||||||
| Total revenues | $ | $ | ||||||||||
| Cost of revenues from continuing operations | ||||||||||||
| Guangzhou Tiancheng Capital Management Group Co., Ltd. | $ | $ | $ | |||||||||
| Total cost of revenues from continuing operations | $ | $ | $ | |||||||||
| Cost of revenues from discontinued operations | ||||||||||||
| Shenzhen Zhongtou Industrial Economic Consulting Co., Ltd. | $ | $ | $ | |||||||||
| Shenzhen Zhongtou Industry Research Institute Co., Ltd. | ||||||||||||
| Shenzhen Zhongtou Business Consulting Co., Ltd. | ||||||||||||
| Total cost of revenues from discontinued operations | ||||||||||||
| * | The revenue from Guangzhou Tiancheng Capital Management Group Co., Ltd arises from advisory and transaction services. Revenues from these services consist of fees associated with private fundraising transactions, which are recognized on a net basis. |
| The costs incurred are related to the business training services provided by Guangzhou Tiancheng Capital Management Group Co., Ltd. These services are delivered through a variety of short-term courses. Revenue is recognized upon the completion of these courses. Training fees are collected in advance of service provision and are recorded as client advances. |
| * | The costs incurred are related to the business consulting services provided by disposed entities. These services are delivered through a variety of short-term services. Revenue is recognized upon the completion of these courses. Training fees are collected in advance of service provision and are recorded as client advances. |
F-29
Note 14 - TAXES
(a) Income taxes
The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.
Cayman Islands
Under the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.
British Virgin Islands
Under the current laws of the BVI, an entity incorporated in the BVI are not subject to tax on income or capital gains.
Hong Kong
In accordance with the relevant tax laws and
regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on
taxable income. KingWin HK incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its
statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. In Hong Kong, the applicable tax rate is
PRC
The Company is subject to PRC Enterprise Income
Tax Laws (“EIT Laws”) with the statutory income tax rate of
F-30
Significant components of the income tax expense (benefit) consisted of the following for the years ended December 31, 2025, 2024 and 2023:
| For the Year Ended December 31, 2025 | For the Year Ended December 31, 2024 | For the Year Ended December 31, 2023 | ||||||||||
| Current income tax expenses (benefit) | ||||||||||||
| PRC | $ | $ | ||||||||||
| Hong Kong | ||||||||||||
| Others | ||||||||||||
| Deferred income tax expenses (benefit) | ||||||||||||
| PRC | ||||||||||||
| Hong Kong | ||||||||||||
| Others | ||||||||||||
| Total income tax from continuing operations | ||||||||||||
| Current income tax (benefit) expenses | - | |||||||||||
| PRC | ( | ) | ( | |||||||||
| Hong Kong | ||||||||||||
| Others | ||||||||||||
| Deferred income tax (benefit) expenses | ||||||||||||
| PRC | ( | ) | ||||||||||
| Hong Kong | ||||||||||||
| Others | ||||||||||||
| Total income tax from discontinued operations | ( | ) | ( | ) | ||||||||
| Total income tax expenses (benefit) | $ | $ | ||||||||||
(Loss) income before income taxes is attributable to the following geographic locations for the years ended December 31,2025, 2024 and 2023:
| For the Year Ended December 31, 2025 | For the Year Ended December 31, 2024 | For the Year Ended December 31, 2023 | ||||||||||
| Cayman Islands | $ | ( | ) | $ | ( | ) | ( | ) | ||||
| BVI | ( | ) | ( | ) | ( | ) | ||||||
| Hong Kong | ( | ) | ( | ) | ( | ) | ||||||
| PRC | ( | ) | ( | ) | ( | ) | ||||||
| US | ||||||||||||
| Less: intercompany transactions | ||||||||||||
| Total (Loss) / Income before Income Taxes from continuing operations | ( | ) | ( | ) | ( | ) | ||||||
| Cayman Islands | ||||||||||||
| BVI | ||||||||||||
| Hong Kong | ||||||||||||
| PRC | ( | ) | ||||||||||
| Less: intercompany transactions | ||||||||||||
| Total (Loss) / Income before Income Taxes from discontinued operations | ( | ) | ||||||||||
| Total (Loss) / Income before Income Taxes | $ | ( | ) | $ | ( | ) | ( | ) | ||||
F-31
The following table presents a reconciliation of the differences between the statutory income tax and the Company’s effective income tax for the years ended December 31, 2025, 2024 and 2023:
| For
the Year Ended December 31, 2025 | For
the Year Ended December 31, 2024 | For the Year Ended December 31, 2023 | ||||||||||
| % | % | % | ||||||||||
| Net loss before income tax | $ | ( | ) | $ | ( | ) | ( | ) | ||||
| Statutory income tax rate of the PRC | % | % | % | |||||||||
| Income tax computed at PRC tax rate from continuing operations | ( | ) | ( | ) | ( | ) | ||||||
| Net (loss) / income before income tax | $ | $ | ( | ) | ||||||||
| Statutory income tax rate of the PRC | % | % | % | |||||||||
| Income tax computed at PRC tax rate from discontinued operations | ( | ) | ||||||||||
| Total income tax computed at PRC tax rate | ( | ) | ( | ) | ( | ) | ||||||
| Reconciling items | ||||||||||||
| Effect of different tax rates of subsidiary operating in other jurisdiction | ||||||||||||
| Non-deductible (benefit) expenses | ( | ) | ||||||||||
| Utilization of prior year losses | ( | ) | ||||||||||
| Effect of deductible temporary differences or deductible losses for which no deferred tax assets are recognized for the year | ||||||||||||
| Income tax expenses (benefit) from continuing operations | ||||||||||||
| Effective tax rate from continuing operations | % | ( | )% | ( | )% | |||||||
| Effect of different tax rates of subsidiary operating in other jurisdiction | ( | ) | ||||||||||
| Non-deductible expenses (benefit) | ||||||||||||
| Effect of deductible temporary differences or deductible losses for which no deferred tax assets are recognized for the year | ( | ) | ||||||||||
| Income tax (benefit) expenses from discontinued operations | ( | ) | ( | ) | ||||||||
| Effective tax rate from discontinued operations | % | % | ( | ) | ||||||||
| Total effective tax rate | % | ( | )% | % | ||||||||
Tax payable as of December 31, 2025 and 2024:
As of December 31, | As of December 31, | |||||||
| Value added tax payable | $ | $ | ||||||
| Income tax receivable | ||||||||
| Other tax payable | ||||||||
| Total taxes payable from continuing operations | ||||||||
| Value added tax payable | ||||||||
| Income tax receivable | ( | ) | ||||||
| Other tax payable | ||||||||
| Total taxes payable from discontinued operations | ||||||||
| Total taxes payable | $ | $ | ||||||
F-32
Net Operating Loss Carry Forward:
| Location | As of December 31, 2025 | As of December 31, 2024 | ||||||
| PRC* | $ | $ | ||||||
| BVI | ||||||||
| Cayman | ||||||||
| Hong Kong* | ||||||||
| Total NOL Carryforwards from continuing operations | | |||||||
| PRC* | ||||||||
| BVI | ||||||||
| Cayman | ||||||||
| Hong Kong* | ||||||||
| Total NOL Carryforwards from discontinued operations | ||||||||
| * | The
net operating loss of the PRC subsidiary incurred in the amount of $ |
| Companies incorporated in the Cayman Islands and the British Virgin Islands (BVI) are not subject to corporate income tax obligations. |
| * |
(c) Uncertain tax positions
The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the years ended December 31, 2025, 2024 and 2023, the Company had no unrecognized tax benefits.
(d) Value added tax
The Company is subject to VAT and related surcharges
in China for providing member services and other in-depth services. The applicable VAT rate is
According to the Article 18 of the “Enterprise Income Tax Law”: Losses incurred in the tax year of an enterprise may be carried forward to subsequent years and offset against the income of those years. However, the maximum duration for carrying forward the losses shall not exceed five years.
And according to the Announcement No. 19 of 2023
issued by the Ministry of Finance and State Administration of Taxation, for small-scale VAT taxpayers, the taxable sales revenue subject
to a
Note 15 - CHINA CONTRIBUTION PLAN
The Company participates in a government-mandated
multi-employer defined contribution plan pursuant to which certain retirement, and medical and other welfare benefits are provided to
employees. Chinese labor regulations require the Company to pay to the local labor bureau a monthly contribution at a stated contribution
rate based on the monthly compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement
benefit obligations; and the Company has no further commitments beyond their monthly contributions. For the years ended December 31,
2025, 2024 and 2023, the Company contributed a total of $
F-33
Note 16 - SHAREHOLDERS’ EQUITY
Ordinary shares
The Company was established under the laws of
the Cayman Islands on February 16, 2022. On July 23, 2022,
the Company had
On January 10, 2023, the Company issued a total
of
On April 20, 2023, the Company consummated the
initial public offering of
On September 5, 2024, the Company entered into
a certain securities purchase agreement with 25 investors, pursuant to which the Company agreed to sell up to $
On August 1, 2025, the Company entered into a
certain securities purchase agreement (the “SPA”) with certain non-U.S. investors (the “Purchasers”), pursuant
to which the Company agreed to sell up to
The Company completed a 25-for-1 share consolidation of its Class A and Class B ordinary shares on May 5, 2025 and September 8, 2025, respectively.
On December 31, 2025, the Company had
Holders of Class A Ordinary Shares and Class
B Ordinary Shares vote together as
The Company’s authorized share capital
is $
Capital contribution
The company’s capital contribution increased
by $
Statutory reserves
In accordance with the Regulations on Enterprises
of PRC, Tiancheng Jinhui in the PRC are required to provide for statutory reserves, which are appropriated from net profit as reported
in the Company’s PRC statutory accounts. It is required to allocate
As of December 31,2025, and 2024, the balances
of the statutory reserves were $
F-34
Note 17 - OPERATING LEASE
The Company has operating lease for its office facility. The lease
for the year ended December 31, 2025 is located at 15N, Block B, Zhongzhou Holding Financial Center, Intersection of Houhai Avenue and
Haide 1st Road, Shenzhen, China,which consists of approximately
In the year 2022, the company changed the leased
property address to Room 1302-1305, Building 25, Tianan Headquarters Central Road, 555, Panyu Avenue North, Donghuan Street, Panyu District
and
Due to the incorporation of Guji Technology (Shenzhen) Co., Ltd. in the year 2024, the company have leased the 32H, Block B, Zhongzhou Holding Financial Center, Intersection of Houhai Avenue and Haide 1st Road, Shenzhen, China for office purposes. In this year, the company terminated the original lease contract and signed a new lease agreement for its office space located at 15N, Block B, Zhongzhou Holding Financial Center, Intersection of Houhai Avenue and Haide 1st Road, Shenzhen, China. The new lease has a term starting from January 1, 2026 and ending by June 15, a lease term of less than 12 months.
Leases with an initial term of 12 months or less are not recorded on the balance sheet; and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non- lease component associated with that lease component as a single lease component for all underlying asset classes.
The following table provides a summary of leases by balance sheet location as of December 31, 2025 and 2024:
| Assets/Liabilities | December 31, 2025 | December 31, 2024 | ||||||
| Assets | ||||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Liabilities | ||||||||
| Operating lease liability - current | $ | $ | ||||||
| Operating lease liability - non-current | ||||||||
| Total lease liabilities | $ | $ | ||||||
F-35
The operating lease expenses for the years ended December 31, 2025 and 2024 were as follows:
| Lease Cost | Classification | December 31, 2025 | December 31, 2024 | |||||||
| Operating lease cost | General and administrative expenses | $ | | $ | ||||||
| Lease Term and Discount Rate | December 31, 2024 | |||
| Weighted-average remaining lease term (years) | ||||
| Operating leases | ||||
| Weighted-average discount rate (%) | ||||
| Operating leases | % | |||
Note 18 - CONCENTRATIONS AND CREDIT RISK
(a) Concentrations
In the year ended December 31, 2025, no third-party
client accounted for more than 10% of the Company’s revenues, respectively. In the year ended December 31, 2024, one third-party
client accounted for
As of December 31, 2025, two third-party clients
accounted for
As of December 31, 2025, two third-party
suppliers accounted for
(b) Credit risk
Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. As of December 31, 2025, substantially all of the Company’s cash was held at Erasl Bank, which is licensed to operate by the Saudi Central Bank, and which management believes is of medium credit quality.
The ongoing coronavirus pandemic that surfaced in China and is spreading throughout the world has had a material adverse effect on the Company’s industry and the markets in which it operates. The Company’s revenues and workforce are concentrated in China. The pandemic has caused its customers to take longer time to make payments, which subjects it to increased credit exposures.
For the credit risk related to trade accounts receivable, the Company performs ongoing credit evaluations of its clients and, if necessary, maintains reserves for potential credit losses. Historically, such losses have been within management’s expectations.
F-36
Note 19 - COMMITMENTS AND CONTINGENCIES
As of December 31, 2025, the Company had commitments or contingencies.
Note 20 - SHARE BASED PAYMENTS
The Corporation’s 2024 Equity Incentive
Plan was formally adopted on February 22, 2024, with the objectives of fostering long-term corporate success, attracting and retaining
high-caliber personnel, and aligning the interests of employees with those of the shareholders. The Plan encompasses a variety of equity
grant options. In April 2024, under this scheme, a total of
The Corporation’s 2025 Equity Incentive
Plan was formally adopted on August 12, 2025, with the objectives of fostering long-term corporate success, attracting and retaining
high-caliber personnel, and aligning the interests of employees with those of the shareholders. The Plan encompasses a variety of equity
grant options. In March 2025, under this scheme, a total of
Note 21 - LOSS PER SHARE
The computation of the Company’s basic and diluted net (loss) / profit per share is as follows:
| For the year ended December 31, 2025 | For the year ended December 31, 2024 | For the year ended December 31, 2023 | ||||||||||
| Numerator: | ||||||||||||
| Net loss-continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss / profit – discontinued operations | ( | ) | ||||||||||
| Total net loss | ( | ) | ( | ) | ( | ) | ||||||
| Denominator: | ||||||||||||
| Weighted-average shares outstanding-Basic | ||||||||||||
| Weighted-average shares outstanding-Diluted | ||||||||||||
| Loss per share-continuing operations | ||||||||||||
| -Basic & diluted earnings per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Note 22 - SUBSEQUENT EVENT
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
F-37
Exhibit 4.5
Top KingWin Ltd.
May 31, 2025
Re: Amended Director Offer Letter
Dear Mr. Dongliang Mao,
Top KingWin Ltd., a company incorporated in the Cayman Islands (the “Company”), offered you a position to serve as a member of the Board of Directors (the “Board”) of the Company, pursuant to a letter agreement dated August 19, 2024. We hereby amend and restate such letter agreement. The amended and restated letter agreement (the “Agreement”) shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company.
1. Term. Upon your acceptance and signature below, this Agreement is retroactively effective from October 1, 2024. Your term as director shall continue subject to the provisions in Section 8 below or until your successor is duly elected and qualified. The position shall be up for re-election each year at the annual shareholder’s meeting and upon re-election, the terms and provisions of this Agreement shall remain in full force and effect.
2. Services. You shall render services as a director of the Board (hereinafter your “Duties”). During the term of this Agreement, you shall attend and participate in such number of meetings of the Board and of the committee(s) of which you are a member as regularly or specially called. You may attend and participate at each such meeting via teleconference, video conference or in person. You shall consult with the other members of the Board and committee(s) as necessary via telephone, electronic mail or other forms of correspondence.
3. Compensation. Effective from October 1, 2024, as compensation for your services to the Company, you will receive $5,000/month in stock. You shall be reimbursed for reasonable and approved expenses incurred by you in connection with the performance of your Duties.
4. No Assignment. Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.
5. Confidential Information; Non-Disclosure. In consideration of your access to certain Confidential Information (as defined below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:
a. Definition. For purposes of this Agreement the term “Confidential Information” means:
i. Any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; or
ii. Any information which is related to the business of the Company and is generally not known by non-Company personnel.
iii. Confidential Information includes, without limitation, trade secrets and any information concerning services provided by the Company, concepts, ideas, improvements, techniques, methods, research, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.
b. Exclusions. Notwithstanding the foregoing, the term Confidential Information shall not include:
i. Any information which becomes generally available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you;
ii. Information received from a third party in rightful possession of such information who is not restricted from disclosing such information; and
iii. Information known by you prior to receipt of such information from the Company, which prior knowledge can be documented.
c. Documents. You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies, to the Company upon the earliest of Company's demand, termination of this Agreement, or your termination or Resignation, as defined in Section 8 herein.
d. Confidentiality. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as maybe necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement.
e. Ownership. You agree that Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, “Inventions”) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned.
f. Non-Solicitation. So long as you are a member of the Board and for a period of 12 months thereafter, you shall not directly or indirectly solicit for employment any individual who was an employee of the Company during your tenure.
6. Termination and Resignation. Your membership on the Board may be terminated for any or no reason by a vote of the stockholders holding at least a majority of the shares of the Company’s issued and outstanding shares entitled to vote. Your membership on the Board or on a Board committee may be terminated for any or no reason by a majority of the Board at any time, if you have been declared incompetent by an order of a court of competent jurisdiction or convicted of a felony. You may also terminate your membership on the Board or on a committee for any or no reason by delivering your written notice of resignation to the Company (“Resignation”), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any compensation (including the vested portion of the Shares) that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation. Any Shares that have not vested as of the effective date of such termination or Resignation shall be forfeited and cancelled.
7. Governing Law. All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York applicable to agreements made and to be performed entirely in the State of New York.
8. Entire Agreement; Amendment; Waiver; Counterparts. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.
9. Indemnification. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys’ fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment and (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought.
10. Not an Employment Agreement. This Agreement is not an employment agreement, and shall not be construed or interpreted to create any right for you to continue employment with the Company.
11. Acknowledgement. You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising under this Agreement.
(Signature Page Follows)
The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.
| Sincerely, | ||
| Top KingWin Ltd. | ||
| By: | /s/ Ruilin Xu | |
| Name: | Ruilin Xu | |
| Title: | Chief Executive Officer and Chairman of the Board | |
| Agreed and Accepted by: | ||
| /s/Dongliang Mao | ||
| Name: | Dongliang Mao | |
Exhibit 4.6
Top KingWin Ltd.
May 31, 2025
Re: Amended Director Offer Letter
Dear Mr. Zhanlin Liao,
Top KingWin Ltd., a company incorporated in the Cayman Islands (the “Company”), offered you a position to serve as a member of the Board of Directors (the “Board”) of the Company, pursuant to a letter agreement dated August 19, 2024. We hereby amend and restate such letter agreement. The amended and restated letter agreement (the “Agreement”) shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company.
1. Term. Upon your acceptance and signature below, this Agreement is retroactively effective from October 1, 2024. Your term as director shall continue subject to the provisions in Section 8 below or until your successor is duly elected and qualified. The position shall be up for re-election each year at the annual shareholder’s meeting and upon re-election, the terms and provisions of this Agreement shall remain in full force and effect.
2. Services. You shall render services as a director of the Board (hereinafter your “Duties”). During the term of this Agreement, you shall attend and participate in such number of meetings of the Board and of the committee(s) of which you are a member as regularly or specially called. You may attend and participate at each such meeting via teleconference, video conference or in person. You shall consult with the other members of the Board and committee(s) as necessary via telephone, electronic mail or other forms of correspondence.
3. Compensation. Effective from October 1, 2024, as compensation for your services to the Company, you will receive $10,000/month in stock. You shall be reimbursed for reasonable and approved expenses incurred by you in connection with the performance of your Duties.
4. No Assignment. Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.
5. Confidential Information; Non-Disclosure. In consideration of your access to certain Confidential Information (as defined below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:
a. Definition. For purposes of this Agreement the term “Confidential Information” means:
i. Any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; or
ii. Any information which is related to the business of the Company and is generally not known by non-Company personnel.
iii. Confidential Information includes, without limitation, trade secrets and any information concerning services provided by the Company, concepts, ideas, improvements, techniques, methods, research, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.
b. Exclusions. Notwithstanding the foregoing, the term Confidential Information shall not include:
i. Any information which becomes generally available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you;
ii. Information received from a third party in rightful possession of such information who is not restricted from disclosing such information; and
iii. Information known by you prior to receipt of such information from the Company, which prior knowledge can be documented.
c. Documents. You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies, to the Company upon the earliest of Company's demand, termination of this Agreement, or your termination or Resignation, as defined in Section 8 herein.
d. Confidentiality. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as maybe necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement.
e. Ownership. You agree that Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, “Inventions”) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned.
f. Non-Solicitation. So long as you are a member of the Board and for a period of 12 months thereafter, you shall not directly or indirectly solicit for employment any individual who was an employee of the Company during your tenure.
6. Termination and Resignation. Your membership on the Board may be terminated for any or no reason by a vote of the stockholders holding at least a majority of the shares of the Company’s issued and outstanding shares entitled to vote. Your membership on the Board or on a Board committee may be terminated for any or no reason by a majority of the Board at any time, if you have been declared incompetent by an order of a court of competent jurisdiction or convicted of a felony. You may also terminate your membership on the Board or on a committee for any or no reason by delivering your written notice of resignation to the Company (“Resignation”), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any compensation (including the vested portion of the Shares) that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation. Any Shares that have not vested as of the effective date of such termination or Resignation shall be forfeited and cancelled.
7. Governing Law. All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York applicable to agreements made and to be performed entirely in the State of New York.
8. Entire Agreement; Amendment; Waiver; Counterparts. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.
9. Indemnification. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys’ fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment and (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought.
10. Not an Employment Agreement. This Agreement is not an employment agreement, and shall not be construed or interpreted to create any right for you to continue employment with the Company.
11. Acknowledgement. You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising under this Agreement.
(Signature Page Follows)
The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.
| Sincerely, | ||
| Top KingWin Ltd. | ||
| By: | /s/ Ruilin Xu | |
| Name: | Ruilin Xu | |
| Title: | Chief Executive Officer and Chairman of the Board | |
| Agreed and Accepted by: | ||
| /s/Zhanlin Liao | ||
| Name: | Zhanlin Liao | |
Exhibit 8.1
List of Subsidiaries
| Subsidiaries | Place of Incorporation | Ownership Interest | ||
| Top KingWin Technology Inc. | California, U.S. | 100% | ||
| Sky KingWin Ltd. | British Virgin Islands | 100% | ||
| Top KingWin Hi Tech Inc. | Colorado, U.S. | Sky KingWin (BVI) (100% Hold) | ||
| Sky KingWin (HK) Ltd. | Hong Kong, P.R. China | Sky KingWin (BVI) (100% Hold) | ||
| Guangdong Tiancheng Jinhui Enterprise Development Group Co., Ltd. (“Tiancheng Jinhui”) | P.R. China | Sky KingWin (HK) (100% Hold) | ||
| Shenzhen Tiancheng Chuangxin Technology Co., Ltd. (“Shenzhen Tiancheng Chuangxin”) | P.R. China | Sky KingWin (HK) (100% Hold) | ||
| Guji Technology (Shenzhen) Co., Ltd. | P.R. China | Shenzhen Tiancheng Chuangxin (100% Hold) | ||
| Guangdong Tiancheng Jinhui Enterprise Management Consulting Co., Ltd. | P.R. China | Tiancheng Jinhui (100% Hold) | ||
| Jiangsu Tiancheng Jinhui Enterprise Management Consulting Co., Ltd. | P.R. China | Tiancheng Jinhui (100% Hold) | ||
| Chongqing Tiancheng Jinhui Enterprise Management Consulting Co., Ltd. | P.R. China | Tiancheng Jinhui (100% Hold) |
Exhibit 12.1
Certification
Pursuant to Rule 13a-14(a) of the Exchange Act
I, Ruilin Xu, certify that:
| 1. | I have reviewed this annual report on Form 20-F of Top KingWin Ltd (the “Company”); |
| 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(s) 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(s) 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 8, 2026 | |
| By: | /s/ Ruilin Xu | |
| Name: | Ruilin Xu | |
| Title: | Chief Executive Officer (principal executive officer) |
Exhibit 12.2
Certification
Pursuant to Rule 13a-14(a) of the Exchange Act
I, Jie Yang, certify that:
| 1. | I have reviewed this annual report on Form 20-F of Top KingWin Ltd (the “Company”); |
| 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(s) 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(s) 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 8, 2026 | |
| By: | /s/ Jie Yang | |
| Name: | Jie Yang | |
| Title: | Chief Financial Officer (principal financial officer) |
Exhibit 13.1
Certification
Pursuant to 18 U.S.C. Section 1350
Pursuant to U.S.C. Section 1350 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Top KingWin Ltd (the “Company”), does hereby certify, to such officer’s knowledge, that the Annual Report on Form 20-F for the year ended December 31, 2025 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 8, 2026
| Top KingWin Ltd | ||
| By: | /s/ Ruilin Xu | |
| Name: | Ruilin Xu | |
| Title: | Chief Executive Officer (principal executive officer) | |
Exhibit 13.2
Certification
Pursuant to 18 U.S.C. Section 1350
Pursuant to U.S.C. Section 1350 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Top KingWin Ltd (the “Company”), does hereby certify, to such officer’s knowledge, that the Annual Report on Form 20-F for the year ended December 31, 2025 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 8, 2026
| Top KingWin Ltd | ||
| By: | /s/ Jie Yang | |
| Name: | Jie Yang | |
| Title: | Chief Financial Officer (principal financial officer) | |
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement on Form F-3 (File No. 333-283030) of our report dated April 8, 2026 with respect to the consolidated financial statements of Top KingWin Ltd, which appears in this Form 20-F for the year ended December 31, 2025
/s/ Li CPA LLC
Aurora Colorado
April 8, 2026
Exhibit 15.2
 |
800 Parker Square STE 215C |
| Flower Mound, TX 75028 | |
| Tel: 214.984.0239 | |
| Fax: 469.519.1624 |
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Annual Report on Form 20-F for the year ended December 31, 2025 and the Registration Statement on Form F-3 (File No. 333-283030) of Top KingWin Ltd. (the “Company”) of our report dated April 17, 2025, with respect to the consolidated financial statements of the Company and its subsidiaries, appearing in the Company’s Annual Report on Form 20-F for the years ended December 31, 2024 and 2023.
We also consent to the reference to our firm under the heading “Experts” in such Annual Report on Form 20-F.
/s/ Tang Qian & Associates, PLLC
Tang Qian & Associates, PLLC
April 8, 2026