《天美生物（BON）2024年20-F年度报告「NASDAQ」（英文版）（190页）.pdf》由会员分享，可在线阅读，更多相关《天美生物（BON）2024年20-F年度报告「NASDAQ」（英文版）（190页）.pdf（190页珍藏版）》请在三个皮匠报告上搜索。

1、 美国美国证券交易委员会华盛顿特区 20549 形式 20-F/A第一修正案（标记一个）根据 1934 年证券交易法第 12(b)或 12(g)条提交的注册声明 或者 根据 1934 年证券交易法第 13 条或 15(d)条的规定提交的年度报告 截至 2019 年9月30日，2024 或者 根据 1934 年证券交易法第 13 或 15(d)条提交的过渡报告 从 _ 到 _ 的过渡期 或者 根据1934 年证券交易法第 13 或 15(d)条提交的空壳公司报告 需要此空壳公司报告的事件日期：委员会档案编号：001-40517 邦自然生活有限公司（注册人章程中指定的确切名称）不适用（注册人姓名英

2、文翻译）开曼群岛（公司成立或组织所在地）瞪羚谷C座601室，锦业路69号高新区，西安、陕西、中国中华人民共和国710060（主要行政办公室地址）胡永伟，董事长兼首席执行官瞪羚谷C座601室，锦业路69号高新区，西安、陕西、中国中华人民共和国710060电话:+0086-29-（公司联系人的姓名、电话、电子邮件和/或传真号码和地址）根据本法第 12(b)条注册或将要注册的证券：各类别名称 交易代码 注册的各交易所名称普通股，面值 0.001 美元 邦 纳斯达克资本市场 根据本法第 12(g)条注册或将要注册的证券。没有任何（课程名称）根据该法第 15(d)条规定有报告义务的证券。没有任何（课程名

3、称）请说明截至年度报告涵盖期间结束时（2024 年 9 月 30 日）发行人各类资本或普通股的流通股数：3,970,558 普通股0股，优先股0股。如果注册人是证券法第405条定义的知名成熟发行人，请勾选。是 不 如果本报告为年度报告或过渡报告，请勾选表明注册人是否无需根据 1934 年证券交易法第 13 或 15(d)条提交报告。是 不 注意选中上面的方框不会免除根据 1934 年证券交易法第 13 或 15(d)条规定需要提交报告的任何注册人在这些条款下的义务。2025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004

4、960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm1/190 请勾选表明注册人(1)是否在过去 12 个月内（或注册人被要求提交此类报告的更短期间内）提交了1934 年证券交易法第 13 或 15(d)条要求提交的所有报告，以及(2)是否在过去 90 天内一直受到此类提交要求的约束。是的 否 Indicate by check mark whether the registrant has submitted electronically every I

5、nteractive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files)Yes No Indicate by check mark whether the registrant is a large accelerated fil

6、er,an accelerated filer,a non-accelerated filer,or an emerging growth company.See definitionof“large accelerated filer,“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large Accelerated Filer Accelerated Filer Non-Accelerated Filer Emerging Growth Company If an emerg

7、ing 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 theextended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange A

8、ct.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board to its Accounting StandardsCodification after April 5,2012.Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements inc

9、luded in this filing:U.S.GAAP 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.Item17 I

10、tem 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 If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included

11、 in the filing reflectthe 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 ofthe registrants executive officers during the

12、relevant recovery period pursuant to 240.10D 1(b).(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d)of the Securities Exchange Act

13、of1934 subsequent to the distribution of securities under a plan confirmed by a court.Not Applicable 2025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm2/190 EXPLANATORY NOTE This Amendment

14、No.1 to the Annual Report on Form 20-F/A(the“Amendment”)amends the Annual Report on Form 20-F of Bon Natural Life Limited(the“Company”)for the year ended September 30,2024(the“Original Filing”),that was originally filed with the U.S.Securities and Exchange Commission on January28,2025.The Amendment

15、is being filed to correct a typographical error in Item 3.“Holding Foreign Companies Accountable Act”and to include a copy of theCompanys clawback policy in the exhibit index.Except as described above,the Amendment does not modify or update the disclosures presented in,or exhibits to,the Original Fi

16、ling in any way.The Amendmentcontinues to speak as of the date of the Original Filing.Furthermore,the Amendment does not reflect events occurring after the filing of the Original Filing.Accordingly,the Amendment should be read in conjunction with the Original Filing,as well as the Companys other fil

17、ings made with the SEC pursuant to Section13(a)or 15(d)of the Exchange Act subsequent to the filing of the Original Filing.2025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm3/190 Annual Rep

18、ort on Form 20-FYear Ended September 30,2024 TABLE OF CONTENTS PagePART I ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS2 A.Directors and Senior Management2 B.Advisors2 C.Auditors2 ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE2 A.Offer Statistics2 B.Method and Expected Timetable2 ITEM

19、3.KEY INFORMATION2 A.Selected Financial Data6 B.Capitalization and Indebtedness7 C.Reasons for the Offer and Use of Proceeds7 D.Risk Factors7 ITEM 4.INFORMATION ON THE COMPANY41 A.History and Development of the Company41 B.Business Overview48 C.Organizational Structure78 D.Property,Plants and Equipm

20、ent82 ITEM 4A.UNRESOLVED STAFF COMMENTS83 ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS83 A.Operating Results83 B.Liquidity and Capital Resources97 C.Research and Development,Patents and Licenses,Etc.99 D.Trend Information99 E.Off Balance Sheet Arrangements99 F.Tabular Disclosure of Contractua

21、l Obligations99 G.Safe Harbor102 ITEM 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES102 A.Directors and Senior Management102 B.Compensation106 C.Board Practices107 D.Employees110 E.Share Ownership110 ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS112 A.Major Shareholders112 B.Related Party Tra

22、nsactions112 C.Interests of Experts and Counsel113 i2025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm4/190 ITEM 8.FINANCIAL INFORMATION113 A.Consolidated Statements and Other Financial Inf

23、ormation113 B.Significant Changes114 ITEM 9.THE OFFER AND LISTING114 A.Offer and Listing Details114 B.Plan of Distribution114 C.Markets114 D.Selling Shareholders115 E.Dilution115 F.Expenses of the Issue115 ITEM 10.ADDITIONAL INFORMATION115 A.Share Capital115 B.Memorandum and Articles of Association1

24、15 C.Material Contracts118 D.Exchange Controls119 E.Taxation121 F.Dividends and Paying Agents129 G.Statement by Experts129 H.Documents on Display130 I.Subsidiary Information130 ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK130 ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY S

25、ECURITIES131 A.Debt Securities131 B.Warrants and Rights131 C.Other Securities131 D.American Depositary Shares131 PART II 132 ITEM 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES132 ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS132 ITEM 15.CONTROLS AND PROCEDUR

26、ES132 A.Disclosure Controls and Procedures132 B.Managements Annual Report on Internal Control Over Financial Reporting133 C.Attestation Report of the Registered Public Accounting Firm134 D.Changes in Internal Controls over Financial Reporting134 ii2025/7/3 15:07sec.gov/Archives/edgar/data/1816815/00

27、0164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm5/190 ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT134 ITEM 16B.CODE OF ETHICS134 ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES135 ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMI

28、TTEES135 ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS135 ITEM 16F.CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT135 ITEM 16G.CORPORATE GOVERNANCE135 ITEM 16H.MINE SAFETY DISCLOSURE135 PART III 136 ITEM 17.FINANCIAL STATEMENTS136 iii2025/7/3 15:07sec.gov/Archives/edga

29、r/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm6/190 INTRODUCTORY NOTES Use of Certain Defined Terms Except as otherwise indicated by the context and for the purposes of this Annual Report only,references in this Annual R

30、eport to:“App-Chem Health”are to Shaanxi App-Chem Health Industry Co.,Ltd.,one of our wholly owned subsidiaries incorporated on April 17,2006 in TongchuanCity in accordance with PRC laws;“App-Chem Ag-tech”are to Shaanxi App-Chem Ag-tech Co.,Ltd.,one of our wholly owned subsidiaries incorporated on A

31、pril 19,2013 in Dali County,Shaanxi Province in accordance with PRC laws;“App-Chem Guangzhou”are to App-Chem Bio(Tech)(Guangzhou)Co.,Ltd.,one of our wholly owned subsidiaries incorporated on April 27,2018 inGuangzhou City in accordance with PRC laws;“Bon Natural Life,”“the Company,”“we,”“us,”“our co

32、mpany”or“our”are to Bon Natural Life Limited a Cayman Islands corporation,its subsidiaries andits consolidated affiliated entities;Bon Natural Life U.S.A.”are to Bon Natural Life U.S.A.Limited,one of our wholly owned subsidiaries incorporated on February 7,2023 in accordancewith the laws and regulat

33、ions in the State of Nevada;“Bozhou DT”are to Bozhou Dietary Therapy Health Technology Co.,Ltd.,one of our wholly owned subsidiaries incorporated on March 9,2023 inaccordance with PRC laws;“China”or the“PRC”are to the Peoples Republic of China,including Hong Kong and Macau,and excluding,for the purp

34、oses of this Annual Report only,Taiwan;“Class A Ordinary Shares”or“Shares”are to our Class A ordinary shares,par value$0.001 per share;“Class B Ordinary Shares”are to our Class B ordinary shares,par value$0.001 per share;“Operating subsidiaries”or“PRC subsidiaries”are to Xian App-Chem Bio(Tech)Co.,L

35、td.,a PRC company,and its subsidiary entities incorporated in thePRC;“Tea Essence”are to Tea Essence Limited,one of our wholly owned subsidiaries incorporated on January 9,2020 in accordance with the laws andregulations in Hong Kong;“Tea Essence(Hangzhou)”are to Tea Essence Health Tech(Hangzhou)Co.,

36、Ltd.,one of our wholly owned subsidiaries incorporated in Hangzhou City onMarch 9,2023 in accordance with PRC laws;“Tianjin YHX”are to Tianjin Yonghexiang Bio(Tech)Co.,Ltd.,one of our subsidiaries incorporated on September 16,2019 in accordance with PRC laws,with 51%equity ownership interest owned b

37、y Xian App-Chem;“Tongchuan DT”are to Tongchuan Dietary Therapy Health Technology Co.,Ltd.,one of our wholly owned subsidiaries incorporated on May 22,2017 inTongchuan City in accordance with PRC laws;“Xian App-Chem”are to Xian App-Chem Bio(Tech)Co.,Ltd.,an entity incorporated in the PRC or,depending

38、 on the context,Xian App-Chem Bio(Tech)Co.,Ltd.and its subsidiaries;“Xian CMIT”are to Xian Cell and Molecule Information Technology Limited,one of our Wholly Foreign-Owned Enterprises incorporated in the PRC;“Xian YH”are to Xian Yanhuang TCM Medical Research&Development Co.,Ltd.,one of our wholly ow

39、ned subsidiaries incorporated on September 15,2009 in Xian City in accordance with PRC laws;“Xian DT”are to Xian Dietary Therapy Medical Technology Co.,Ltd,one of our subsidiaries incorporated on April 24,2015 in accordance with PRC laws,with 75%equity ownership interest owned by Xian App-Chem;“Xian

40、 Youpincui”are to Xian Youpincui Biotechnology Co.,Ltd.,another of our Wholly Foreign-Owned Enterprises incorporated in the PRC;and “YongJinAn”are to YongJinAn Group Limited,one of our wholly owned subsidiaries we acquired in on September 19,2024,which was incorporated inHong Kong in accordance with

41、 Hong Kong laws.Cautionary Note Regarding Forward-Looking Statements In addition to historical information,this Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21Eof the Exchange Act.We use words such as“believe,”“expect,”“anticip

42、ate,”“project,”“target,”“plan,”“optimistic,”“intend,”“aim,”“will”or similar expressionswhich are intended to identify forward-looking statements.Such statements include,among others,those concerning market and industry segment growth and demandand acceptance of new and existing products;any projecti

43、ons of sales,earnings,revenue,margins or other financial items;any statements of the plans,strategies andobjectives of management for future operations;and any statements regarding future economic conditions or performance,as well as all assumptions,expectations,predictions,intentions or beliefs abo

44、ut future events.Investors are cautioned that any such forward-looking statements are not guarantees of future performance andinvolve risks and uncertainties,as well as assumptions,which,if they were to ever materialize or prove incorrect,could cause the results of the Company to differmaterially fr

45、om those expressed or implied by such forward-looking statements.Potential risks and uncertainties include,among other things,the possibility that wemay not be able to maintain or increase our net revenues and profits due to our failure to anticipate consumer preferences and develop new products,our

46、 failure toexecute our business expansion plan,changes in domestic and foreign laws,regulations and taxes,changes in economic conditions,uncertainties related to Chinaslegal system and economic,political and social events in China,a general economic downturn,a downturn in the securities markets,and

47、other risks and uncertaintieswhich are generally set forth under Item 3“Key informationD.Risk Factors”and elsewhere in this Annual Report.Readers are urged to carefully review and consider the various disclosures made by us in this Annual Report and our other filings with the SEC.These reports attem

48、ptto advise interested parties of the risks and factors that may affect our business,financial condition and results of operations and prospects.The forward-lookingstatements made in this Annual Report speak only as of the date hereof and we disclaim any obligation,except as required by law,to provi

49、de updates,revisions oramendments to any forward-looking statements to reflect changes in our expectations or future events.2025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm7/190 12025/7/3

50、 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm8/190 PART I ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS A.Directors and Senior Management Not applicable.B.Advisors Not applicable

51、.C.Auditors Not applicable.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE A.Offer Statistics Not applicable.B.Method and Expected Timetable Not applicable.ITEM 3.KEY INFORMATION We are a Cayman Islands holding company that conducts all of our operations and operates our business in China through our

52、 PRC subsidiaries.Holders of ourordinary shares do not own equity securities of our subsidiaries that have substantive business operations in China,but instead are holders of equity securities of aCayman Islands holding company.Such structure involves unique risks to investors in our ordinary shares

53、.Although we own and control our PRC operatingsubsidiaries,investors in our ordinary shares may never hold equity interests directly in our operating entities.Please see“Risks Related to Our Corporate Structure”beginning on page 14 of this report(the“Annual report”)or additional information.We face

54、various legal and operational risks and uncertainties related to being based in and having all of our operations in China.The PRC government has significantauthority to exert influence on the ability of a China-based company,such as us,to conduct its business,accept foreign investments or list on an

55、 U.S.or other foreignexchanges.For example,we face risks associated with regulatory approvals of offshore offerings,anti-monopoly regulatory actions,and oversight on cybersecurityand data privacy.Such risks could result in a material change in our operations and/or the value of our ordinary shares o

56、r could significantly limit or completely hinderour ability to offer or continue to offer ordinary shares and/or other securities to investors and cause the value of such securities to significantly decline or beworthless.For a detailed description of risks related to doing business in China,see gen

57、erally,“Risks Related to Legal Uncertainty and Doing Business in China”beginning on page 15 of this Annual Report.22025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm9/190 Holding Foreign Co

58、mpanies Accountable Act The recently enacted Holding Foreign Companies Accountable Act(“HFCAA”),together with a recent joint statement by the United States Securities and ExchangeCommission(“SEC”)and the PCAOB call for additional stringent criteria to be applied to emerging market companies by asses

59、sing the qualification of non-U.S.auditors who are not inspected by the PCAOB.Under the HFCAA,our securities may be prohibited from trading on the Nasdaq or other U.S.stock exchanges if ourauditor is not subject to inspection by the PCAOB for three consecutive years,and this ultimately could result

60、in our Ordinary Shares being delisted from trading onany U.S.stock exchange.On December 29,2022,President Biden signed the Consolidated Appropriations Act,2023,which,among other things,amended theHFCAA to reduce the time period under the HFCAA to two consecutive years instead of three consecutive ye

61、ars.Pursuant to the HFCAA,the PCAOB issued a Determination Report on December 16,2021(the“2021 Determination Report”)which found that the PCAOB isunable to inspect or investigate completely registered public accounting firms headquartered in mainland China because of a position taken by one or more

62、authoritiesin mainland China.Our auditor,located in China,is not subject to the 2021 Determination Report.On August 26,2022,the China Securities Regulatory Commission(“CSRC”),the Ministry of Finance of China,and the PCAOB signed a protocol governing inspections and investigations of audit firms base

63、d in China and HongKong.On December 15,2022,the PCAOB issued a new Determination Report(the“2022 Determination Report”)which:(1)vacated the 2021 Determination Reportand(2)concluded that the PCAOB has been able to conduct inspections and investigations completely in the PRC in 2022.Although the 2022

64、Determination Reportreversed the conclusion of the 2021 Determination Report with respect to PCAOBs ability to conduct inspections and investigations completely of the registeredpublic accounting firms headquartered in mainland China and Hong Kong,the 2022 Determination Report cautions,however,that

65、authorities in the PRC might takepositions at any time that would prevent the PCAOB from continuing to inspect or investigate completely.As required by the HFCAA,if in the future the PCAOBdetermines it no longer can inspect or investigate completely because of a position taken by an authority in the

66、 PRC,the PCAOB will act expeditiously to considerwhether it should issue a new determination.The audit report included in this Annual Report for the year ended September 30,2024 was issued by YCM CPA INC.(YCM”),which is a U.S.-based accountingfirm that is registered with the PCAOB.YCM was not subjec

67、t to the 2021 Determination Report.We have no intention of dismissing YCM in the future or ofengaging any auditor not based in the U.S.and not subject to regular inspection by the PCAOB.Cash Flows Within Our Organization We have established clear policies and procedures to ensure effective cash over

68、sight.Our management team is directly responsible for supervising cash management,while our finance department is responsible for establishing guidelines and procedures to be followed by all departments and operating entities.When a department oroperating entity requires cash,they must first submit

69、a cash demand plan to designated management members within our company.The plan outlines the specificamount and timing of the requested funds,and the designated management member evaluates the request based on available sources of cash and the priority of needs.Once approved,the cash allocation is s

70、ent to our finance department for a second review and further approval.To further ensure effective cash management,weregularly review our cash position and make adjustments as necessary to maximize the use of available funds.We also maintain a close relationship with our bankingpartners to stay info

71、rmed of any changes in banking regulations or requirements that could affect our cash management activities.32025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm10/190 The structure of cash f

72、lows within the entities in our corporate organization,and the applicable regulations,are as follows:1.Our equity structure is a direct holding structure,that is,the overseas entity listed in the U.S.,Bon Natural Life,directly controls Xian CMIT and XianYoupincui(the“WFOEs”)and other domestic operat

73、ing entities through the Hong Kong company,Tea Essence.See“Corporate History and Structure”for additionaldetails.2.Within our direct holding structure,the cross-border transfer of funds within our corporate group is conducted in compliance with the laws and regulations ofthe PRC.After foreign invest

74、ors funds enter Bon Natural Life following an offering of securities,the funds can be directly transferred to Tea Essence,and thentransferred to subordinate operating entities through the WFOE.If were to distribute dividends,we would transfer the dividends to Tea Essence in accordance with the laws

75、and regulations of the PRC,and then Tea Essence willtransfer the dividends to Bon Natural Life,and the dividends will be distributed from Bon Natural Life to all shareholders respectively in proportion to the shares theyhold,regardless of whether the shareholders are U.S.investors or investors in ot

76、her countries or regions.3.As of January 30,2024,the only cash transfers from Bon Natural Life Limited to its subsidiaries have been as follows:1)On June 29,2021,$9 million wastransferred from Bon Natural Life to our Hong Kong subsidiary and then transferred to our WOFE as a capital contribution.The

77、se funds were then transferred to oursubsidiary in the PRC.2)On July 9,2021,$1 million was transferred from Bon Natural Life to our Hong Kong subsidiary and then further transferred to our WOFEas a capital contribution.These funds were then transferred to our subsidiary in the PRC in August 2021.3)O

78、n January 17,2023,$630,000 was transferred from BonNatural Life to our Hong Kong subsidiary and then transferred to our WOFE as a capital contribution.These funds were then transferred to our subsidiary in the PRCin January 2023.Other than the foregoing,there have been no intercompany cash transfers

79、 from Bon Natural Life to our subsidiaries or from our subsidiaries to BonNatural Life.To date,none of our subsidiaries have made any dividends or distributions to Bon Natural Life and we have not made any dividends or distributions to ourshareholders.We intend to keep any future earnings to finance

80、 the expansion of our business,and we do not anticipate that any cash dividends will be paid toshareholders in the foreseeable future.4.Under Cayman Islands law,the Company may pay dividends on its shares out of either profit or share premium amounts,provided that in no circumstance maya dividend be

81、 paid if such payment would result in the Company being unable to pay its debts as they become due in the ordinary course of business.If we decide topay dividends in the future,as a holding company,we will depend on receiving dividends from our PRC subsidiaries.42025/7/3 15:07sec.gov/Archives/edgar/

82、data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm11/190 Current PRC regulations permit our direct PRC subsidiary,or WFOE,to pay dividends to Tea Essence Limited(HK),our Hong Kong subsidiary,only out of itsaccumulated profits,

83、if any,determined in accordance with Chinese accounting standards and regulations.Cash dividends,if any,on our Ordinary Shares would bepaid in U.S.dollars.The PRC government also imposes control on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC.Under ex

84、isting PRC foreign exchange regulations,payments of current account items,including profit distributions,interest payments and expenditures from trade-related transactions,can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange(“SAFE”)in the PRC,as

85、long ascertain procedural requirements are met.Approval from appropriate government authorities is required if RMB is converted into foreign currency and remitted out ofChina to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may,at its discre

86、tion,impose restrictions onaccess to foreign currencies for current account transactions and,if this occurs in the future,we may not be able to pay dividends in foreign currencies(i.e.,U.S.dollars)to our shareholders.Furthermore,if our PRC entities incur debt on their own in the future,the instrumen

87、ts governing the debt may restrict their ability to paydividends or make other payments.Due to the above restrictions,if we are unable to receive payments from our PRC operating entities,we would not be able to paydividends to our shareholders,should we desire to do so in the future.PRC Government P

88、ermissions and Approvals We believe that we have obtained all material licenses and permits from the PRC government authorities for our business operations in the PRC.To date,we have notbeen denied any such licenses and permits.However,we cannot assure you that we will always be able to successfully

89、 obtain,update or renew all the licenses orpermits required for our business in a timely manner or that these licenses or permits are sufficient to conduct all of our present or future business operations.If we(i)do not receive or maintain required permissions or approvals,(ii)inadvertently conclude

90、 that such permissions or approvals are not required,or(iii)applicable laws,regulations,or interpretations change and we are required to obtain such permissions or approvals in the future,we could be subject to fines,legal sanctions or anorder to suspend or business operations,which may materially a

91、nd adversely affect our business,financial condition and results of operations.On February 17,2023,the China Securities Regulatory Commission(the“CSRC”)promulgated the Trial Administrative Measures of the Overseas Securities Offeringand Listing by Domestic Companies(the“Overseas Listing Trial Measur

92、es”)and relevant five guidelines,which became effective on March 31,2023.According tothe Overseas Listing Trial Measures,PRC domestic companies that seek to offer securities or list in overseas markets,either directly or indirectly,are required tofulfill the filing procedure with the CSRC.At a press

93、 conference held for these new regulations,officials from the CSRC clarified that the domestic companies thathave already been listed overseas before the effective date of the Overseas Listing Trial Measures(i.e.March 31,2023)shall be deemed as existing issuers,or theExisting Issuers.Existing Issuer

94、s are not required to complete the filling procedures immediately,and they shall be required to file with the CSRC when subsequentmatters such as refinancing are involved.52025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815

95、/000164117225004960/form20-fa.htm12/190 As an Existing Issuer under the Overseas Listing Trial Measures,we would only be required to complete the filing procedures with the CSRC in connection with anew securities offering conducted after March 31,2023.Given that the Overseas Listing Trial Measures w

96、ere recently promulgated,however,there remain substantialuncertainties as to their interpretation,application,and enforcement.We cannot guarantee that new rules or regulations promulgated in the future will not impose anyadditional requirement on us or otherwise tighten the PRC domestic regulations

97、on companies indirectly listed overseas.To the extent that we are subject to any CSRC approval,filing,other governmental authorization or requirements,whether in connection with future securitiesofferings or otherwise,we cannot assure you that we could obtain such approval,complete such filing,or me

98、et other requirements in a timely manner or at all.If wefail to obtain such approval if and when needed or complete such filings or meet other requirements in a timely manner,the Chinese regulatory authorities may imposefines and penalties on our operations in China,limit our ability to pay dividend

99、s outside of China,limit our operations in China,delay or restrict the repatriation of theproceeds from securities offerings into China,force a delisting of our ordinary shares,or take other actions that could have a material adverse effect on our business,financial condition,results of operations a

100、nd prospects,as well as the trading price of our securities.The Cybersecurity Review Measures provide that an online platform operator,which possesses personal information of at least one million users,must apply for acybersecurity review by the CAC if it intends to be listed in foreign countries.Be

101、cause we currently do not possess more than one million users personal information,we do not believe that we are or will be subject to the cybersecurity review by the CAC.In addition,to date,we have not been involved in any investigations oncybersecurity review initiated by any PRC regulatory author

102、ity,nor have we received any inquiry,notice,or sanction related to cybersecurity review under theCybersecurity Review Measures.A.Selected Financial Data The following table presents selected financial data regarding our business.It should be read in conjunction with our consolidated financial statem

103、ents and relatednotes contained elsewhere in this annual report and the information under Item 5“Operating and Financial Review and Prospects.”The selected consolidatedstatements of income and comprehensive income data for the fiscal years ended September 30,2024 and 2023,and the selected consolidat

104、ed statements of financialposition data as of September 30,2024 and 2023 have been derived from our audited consolidated financial statements that are included in this annual reportbeginning on page F-1.Our consolidated financial statements are prepared and presented in accordance with accounting pr

105、inciples generally accepted in the United States of America,or U.S.GAAP.The selected financial data information is only a summary and should be read in conjunction with the historical consolidated financial statements and relatednotes contained elsewhere herein.The financial statements contained els

106、ewhere fully represent our financial condition and operations;however,they are not indicativeof our future performance.62025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm13/190 Balance Shee

107、t Data(Presented in$USD)As of September 30,2024 2023 Current assets$39,793,857$24,183,464 Total assets$61,765,432$46,556,136 Current liabilities$16,445,832$9,611,215 Total liabilities$17,415,893$10,574,303 Total equity$44,349,539$35,981,833 Total liabilities and equity$61,765,432$46,556,136 Statemen

108、ts of Operations Data(Presented in$USD)For the years ended September 30,2024 2023 2022 Revenues$23,844,556$29,522,353$29,908,561 Gross profit$7,110,009$8,840,027$9,423,565 Operating expenses$5,236,475$2,903,566$2,823,858 Income from operations$1,873,534$5,936,461$6,599,707 Other income(expenses)$(1,

109、157,595)$(363,594)$969,285 Provision for income taxes$(351,179)$1,002,298$1,267,025 Net income$345,248$4,552,682$6,242,424 Net income attributable to Bon Natural Life Limited$398,172$4,595,982$6,237,488 Earnings per share,basic$0.17$5.03$7.47 Earnings per share,diluted$0.17$5.00$7.43 Weighted averag

110、e ordinary shares outstanding-basic 2,387,833 913,960 836,077 Weighted average ordinary shares outstanding-diluted 2,402,848 919,811 839,606 B.Capitalization and Indebtedness Not applicable.C.Reasons for the Offer and Use of Proceeds Not applicable.D.Risk Factors An investment in our capital stock i

111、nvolves a high degree of risk.You should carefully consider the risks described below,together with all of the other informationincluded in this Annual Report,before making an investment decision.If any of the following risks actually occurs,our business,financial condition or results ofoperations c

112、ould suffer.In that case,the trading price of our common stock could decline,and you may lose all or part of your investment.72025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm14/190 Risks

113、Related To Our Financial Condition and Business Model Because we conduct all of our operations in China,our business is subject to the complex and rapidly evolving laws and regulations there.The Chinesegovernment may exercise significant oversight and discretion over the conduct of our business and

114、may intervene in or influence our operations at any time,which could result in a material change in our operations and/or the value of our Ordinary Shares,could significantly limit or completely hinder our abilityto offer or continue to offer securities to investors and cause the value of our securi

115、ties to significantly decline or be worthless.As a business operating in China,we are subject to the laws and regulations of the PRC,which can be complex and evolve rapidly.The PRC government has thepower to exercise significant oversight and discretion over the conduct of our business,and the regul

116、ations to which we are subject may change rapidly and with littlenotice to us or our shareholders.The PRC legal system is based on written statutes.Unlike common law systems,it is a system in which legal cases have limited valueas precedents.In the late 1970s,the PRC government began to promulgate a

117、 comprehensive system of laws and regulations governing economic matters in general.The overall effect of legislation over the past four decades has significantly increased the protections afforded to various forms of foreign or private-sector investmentin China.As relevant laws and regulations are

118、relatively new and the PRC legal system continues to rapidly evolve with little advance notice,however,theinterpretations of many laws,regulations and rules are not always uniform and enforcement of these laws,regulations and rules involve uncertainties.The PRCgovernment has the power to exercise si

119、gnificant oversight and discretion over the conduct of our business,and the regulations to which we are subject may changerapidly and with little notice to us or our shareholders.In addition,these laws and regulations may be interpreted and applied inconsistently by different agencies orauthorities,

120、and inconsistently with our current policies and practices.New laws,regulations,and other government directives in the PRC may also be costly tocomply with,and such compliance or any associated inquiries or investigations or any other government actions may:Delay or impede our development,Result in

121、negative publicity or increase our operating costs,Render it difficult or impossible for us to raise capital through new securities offerings,thus hindering our development,Require significant management time and attention,and Subject us to remedies,administrative penalties and even criminal liabili

122、ties that may harm our business,including fines assessed for our current or historicaloperations,or demands or orders that we modify or even cease our business practices.82025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/

123、000164117225004960/form20-fa.htm15/190 The promulgation of new laws or regulations,or the new interpretation of existing laws and regulations,in each case that restrict or otherwise unfavorably impact theability or manner in which we conduct our business and could require us to change certain aspect

124、s of our business to ensure compliance,which could decrease demandfor our products,reduce revenues,increase costs,require us to obtain more licenses,permits,approvals or certificates,or subject us to additional liabilities.To theextent any new or more stringent measures are required to be implemente

125、d,our business,financial condition and results of operations could be adversely affected,andany such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities tosignificantly decline or be worthless.

126、Our failure to appropriately respond to changing consumer preferences and demand for new products or product enhancements could significantly harmour customer relationships and product sales and harm our financial condition and operating results.Our business is subject to changing consumer trends an

127、d preferences,especially with respect to weight management;targeted nutrition;energy,sports,and fitness;andother nutrition products.Our continued success depends in part on our ability to anticipate and respond to these changes,and we may not respond in a timely orcommercially appropriate manner to

128、such changes.Furthermore,the nutritional supplement industry is characterized by rapid and frequent changes in demand forproducts and new product introductions and enhancements.Our failure to accurately predict these trends could negatively impact consumer opinion of our productsand cause the loss o

129、f sales.Our short term new product development primarily focuses on health supplements,such as various powder drink products seeking to i)boost immunity;ii)prevent indigestion;iii)prevent respiratory infection;iv)prevent allergic skin reaction;v)improve sleep quality;vi)prevent memory loss and vii)a

130、lleviate anxiety.Our products have not been approved as effective in treating or preventing any health conditions and/or diseases by a regulatory agency in the PRC.In terms of product enhancements,we are also working on increasing the purity of our bioactive food ingredients,such as our ultra-pure s

131、tachyose as a dietarysupplement for infants,flavanols to seek intestine health improvement,procyanidin b2 to seek to promote hair growth,and high soluble and low residue sclareolide toseek weight management.The success of our new product offerings and enhancements depends upon a number of factors,in

132、cluding our ability to:accurately anticipate customer needs;innovate and develop new products or product enhancements that meet these needs;successfully commercialize new products or product enhancements in a timely manner;price our products competitively;manufacture and deliver our products in suff

133、icient volumes and in a timely manner;and differentiate our product offerings from those of our competitors.If we do not introduce new products or make enhancements to meet the changing needs of our customers in a timely manner,some of our product offerings could berendered obsolete,which could nega

134、tively impact our revenues,financial condition and operating results.92025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm16/190 If we are unable to build sufficient distribution network to m

135、eet increasing demand of our products,our ability to execute on our business plan as outlined inthis Annual Report will be impaired.We sell our products through our direct sales force and distribution channel.Although our sales and distribution satisfy our existing business needs,they might beinsuff

136、icient to meet demand for our products as we continue to grow our business,which could result in harm to our sales and business operations,financial conditionand results of operations.To mitigate such risk,we intent to invest our internally generated cash from operations and capital to be raised to

137、add additional teams to ourdirect sales force,expand our geographic reach with new distribution channels into other provinces within China and overseas,and establish more sales online.If ourplanned efforts to expand our sales and distribution channels are not effective,our ability to execute on our

138、business plan and to realize continued growth with beimpaired.Production difficulties,quality control problems,inaccurate forecasting and reliance on third-party suppliers could harm our business.Production difficulties,quality control problems,inaccurate forecasting and our reliance on third party

139、suppliers to manufacture and deliver products that meet ourspecifications in a timely manner could harm our business.We could experience production difficulties with respect to our products,including the availability of rawmaterials,components,packaging and products that do not meet our specificatio

140、ns and quality control standards.These production difficulties and quality problemscould result in stock outages or shortages in our markets with respect to such products,harm our sales,or create inventory write-downs for unusable products.The inability to obtain adequate supplies of raw materials f

141、or products at favorable prices,or at all,could have a material adverse effect on our business,financial condition,or results of operations.We acquire our raw materials for the manufacture of our products from third-party suppliers.Materials used in manufacturing our products are purchased throughpu

142、rchase order,often invoking pre-negotiated supply agreements.We have very few long-term agreements for the supply of these materials.There is a risk that any ofour suppliers could discontinue selling raw materials to us.Although we believe that we could establish alternate sources for most of our pr

143、oducts,any delay inlocating and establishing relationships with other sources could result in product shortages or back orders for products,with a resulting loss of net sales.In certainsituations,we may be required to alter our products or to substitute different products from another source.There c

144、an be no assurance that suppliers will provide theraw materials that are needed by us in the quantities that we request or at the prices that we are willing to pay.Because we do not control the actual production ofcertain raw materials,we are also subject to delays caused by any interruption in the

145、production of these materials,based on conditions not within our control,including weather,crop conditions,transportation interruptions,strikes by supplier employees,and natural disasters or other catastrophic events.102025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.ht

146、mhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm17/190 Our products have not been clinically proven to be safe or effective,and our quality control efforts are limited to ensuring ingredient and product purity andcertain safety measures.If our products,or similar prod

147、ucts distributed by other companies,were proven or asserted to be unsafe or ineffective,our businesswould be harmed.Our products include nutritional supplements that are made from vitamins,minerals,herbs,and other substances for which there is a long history of humanconsumption.Some of our products

148、contain innovative ingredients or combinations of ingredients.Although we believe that all of our products are safe when taken asdirected,there is little long-term experience with human consumption of certain of these product ingredients or combinations of ingredients in concentrated form.Wehave not

149、 conducted clinical trials on the safety or efficacy of our products,and no government agency with authority has made any determination regarding theirsafety or efficacy.Our inspection and quality control efforts are limited to ensuring ingredient and product purity and quality.We follow industry be

150、st practices byinspecting sourced raw materials and finished products and formulating our products and in accordance to“ISO22000 Food Safety Management System-ProcurementControl Procedure”,“Peoples Republic of China National Standard-Powder Drink”,and“Peoples Republic of China Domestic Trade Industr

151、y Standard-TabletCandy”.In addition to our self-inspections,we use authorized national food quality control and safety inspection agencies to inspect our raw materials and finishedproducts.These inspections and practices,however,do not constitute proof or assurance that our products are safe or effe

152、ctive.We could be adversely affected in theevent that our products,or similar products distributed by other companies,were proven or are asserted to be ineffective or harmful to consumers or in the event ofadverse publicity associated with any illness or other adverse effects resulting from consumer

153、s use or misuse of our products or similar products of our competitors.We may face increased competition from new and existing firms with greater capital resources,which could cause our market share and profitability todecline if we do not successfully meet competitive challenges.Because of the stro

154、ng prospects and recent growth of our existing business,we may face new direct competition from some counterparts engaged in other categoriesof the natural products and ingredients business,such as Chenguang Biotech from China,which is engaged in natural colors,Layn,which engaged in naturalsweetener

155、s,and European counterparts like Koninklijke DSM N.V.,Symrise AG,and Givaudan SA.These firms may seek to compete directly with Xian App-Chemin its existing businesses to some extent.The size,financial strength,technology foundation and development capabilities of the above-mentioned companies arestr

156、ong,and potential competition from these firms will be a key competitive challenge in the near future.In addition,large and well-developed food and foodingredient companies may seek to enter the nutritional health space.These companies may challenge us by seeking to secure key raw material sources f

157、or theirproducts and to acquire stability,reliability and cost advantages for their supply chains.Because of the strong capital and brand strength of such companies,theymight pose challenges to us in the future.If we are unable to continue to expand,innovate,and collaborate to improve our market pos

158、ition in the face of newcompetition,our market share,revenues,and profitability will be adversely affected.112025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm18/190 If we do not obtain sub

159、stantial additional financing,our ability to execute on our business plan as outlined in this Annual Report will be impaired.Our plans for business expansion and development are dependent upon our raising significant additional capital.Our plans call for significant new investments inresearch and de

160、velopment,marketing,expanded productions capacity,and working capital for raw materials and other items.Management estimates that our capitalneeds for expansion will be approximately$40 million.We will be required to seek additional investments,loans or debt financing to fully pursue our business pl

161、ans.Such additional investment may not be available to us on terms which are favorable or acceptable.Should we be unable to meet our full capital needs,our ability tofully implement our business plan will be impaired.If we are unable to retain key personnel and hire new key personnel,we may not be a

162、ble to implement our business plan.Our ability to succeed depends upon the experience and contributions of our key personnel,and in particular,our founder and CEO,Mr.Hu.The loss of the services ofthese individuals,if they are not adequately replaced,could have a substantial adverse effect on our fin

163、ancial condition,results of operations,and prospects.Our futuresuccess will also depend on our ability to identify,attract,and retain additional qualified personnel as we expand our operations.There is no guarantee that we will besuccessful in identifying,attracting,and retaining such personnel.Cons

164、equently,the loss of any of those individuals may have a substantial effect on our futuresuccess or failure.We may have to recruit qualified personnel with competitive compensation packages,equity participation,and other benefits that may affect theworking capital available for our operations.Manage

165、ment may have to seek to obtain outside independent professionals to assist them in assessing the merits and risksof any business proposals as well as assisting in the development and operation of many company projects.No assurance can be given that we will be able to obtainsuch needed assistance on

166、 terms acceptable to us.Our failure to attract additional qualified employees or to retain the services of key personnel could have a materialadverse effect on our operating results and financial condition.Negative publicity may harm our brand and reputation and have a material adverse effect on our

167、 business.Negative publicity about us,including our services,management,business model and practices,compliance with applicable rules,regulations and policies,or ournetwork partners may materially and adversely harm our brand and reputation and have a material adverse effect on our business.We canno

168、t assure you that we willbe able to defuse any such negative publicity within a reasonable period of time,or at all.Additionally,allegations,directly or indirectly against us,may be posted onthe internet by anyone on a named or anonymous basis,and can be quickly and widely disseminated.Information p

169、osted may be inaccurate,misleading and adverse tous,and it may harm our reputation,business or prospects.The harm may be immediate without affording us an opportunity for redress or correction.Our reputationmay be negatively affected as a result of the public dissemination of negative and potentiall

170、y inaccurate or misleading information about our business and operations,which in turn may materially adversely affect our relationships with our customers,employees or business partners,and adversely affect the price of our Shares.122025/7/3 15:07sec.gov/Archives/edgar/data/1816815/0001641172250049

171、60/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm19/190 Because we are an“emerging growth company,”we may take advantage of certain exemptions from various reporting requirements that are applicable toother public companies that are not“emerging growth c

172、ompanies.”We are an“emerging growth company”as defined under the Jumpstart our Business Startups Act(“JOBS Act”).We will remain an“emerging growth company”forup to five years,or until the earliest of:(i)the last day of the first fiscal year in which our total annual gross revenues exceed$1.235 billi

173、on,(ii)the date that we become a“large accelerated filer”as defined in Rule 12b-2 under the Securities Exchange Act of 1934,which would occur if the marketvalue of our ordinary shares that is held by non-affiliates exceeds$700 million as of the last business day of our most recently completed second

174、 fiscalquarter,or (iii)the date on which we have issued more than$1 billion in non-convertible debt during the preceding three-year period.As an“emerging growth company”,we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companiesthat

175、are not“emerging growth companies”including,but not limited to:not being required to comply with the auditor attestation requirements of section 404(b)of the Sarbanes-Oxley Act(“Sarbanes Oxley”)(we also will not besubject to the auditor attestation requirements of section 404(b)as long as we are a“s

176、maller reporting company”,which includes issuers that had a publicfloat of less than$75 million as of the last business day of their most recently completed second fiscal quarter);reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;and exempti

177、ons from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachutepayments not previously approved.In addition,section 107 of the JOBS Act provides that an“emerging growth company”can take advantage of the extended transition p

178、eriod provided in section 7(a)(2)(B)of the Securities Act of 1933(the“Securities Act”)for complying with new or revised accounting standards.Under this provision,an“emerging growth company”can delay the adoption of certain accounting standards until those standards would otherwise apply to private c

179、ompanies.However,we are choosing to“opt out”ofsuch extended transition period and,as a result,we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards isrequired for non-emerging growth companies.Section 107 of the JOBS Act provides that our d

180、ecision to opt out of the extended transition period for complying withnew or revised accounting standards is irrevocable.132025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm20/190 Risks Re

181、lated to Our Corporate Structure Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.On March 15,2019,the National Peoples Congress approved the Foreign Investment Law,which came into effect on January 1,2020.Along with the ForeignInves

182、tment Law,the Implementing Rules of Foreign Investment Law promulgated by the State Council and the Interpretation of the Supreme Peoples Court onSeveral Issues Concerning the Application of the Foreign Investment Law promulgated by the Supreme Peoples Court became effective on January 1,2020.Since

183、theForeign Investment Law and its current implementation and interpretation rules are relatively new,uncertainties still exist in relation to their further application andimprovement.The Foreign Investment Law grants national treatment to foreign-invested entities,except for those foreign-invested e

184、ntities that operate in industries specified aseither“restricted”or“prohibited”from foreign investment in a“negative list”.It is unclear whether the“negative list”to be published pursuant to the ForeignInvestment Law will differ from the current Special Administrative Measures for Market Access of F

185、oreign Investment(Negative List)(2021 Version).The ForeignInvestment Law provides that foreign-invested entities operating in“restricted”industries will require market entry clearance and other approvals from relevant PRCgovernment authorities.As of the date hereto,the current business activities of

186、 our PRC subsidiaries are not within the“negative list”,and foreign investors areallowed to hold 100%equity interests of our PRC subsidiaries under the Foreign Investment Law.We have no plans at the present to substantially change our PRCsubsidiaries business activities in the future.However,its unc

187、ertain whether we will engage in business activities that are in the“negative list”,as the“negative list”may be amended from time to time.142025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.ht

188、m21/190 Risks Related to Legal Uncertainty and Doing Business in China Because all of our operations are in China,our business is subject to the complex and rapidly evolving laws and regulations there.The Chinese governmentmay exercise significant oversight and discretion over the conduct of our bus

189、iness and may intervene in or influence our operations at any time,which couldresult in a material change in our operations and/or the value of our ordinary shares.As all of our business operations are conducted in China,we are subject to the laws and regulations of the PRC,which can be complex and

190、evolve rapidly.The PRClegal system is based on written statutes.Unlike common law systems,it is a system in which legal cases have limited value as precedents.In the late 1970s,the PRCgovernment began to promulgate a comprehensive system of laws and regulations governing economic matters in general.

191、The overall effect of legislation over thepast four decades has significantly increased the protections afforded to various forms of foreign or private-sector investment in China.As relevant laws and regulations are relatively new and the PRC legal system continues to rapidly evolve with little adva

192、nce notice,the interpretations of many laws,regulations and rules are not always uniform and enforcement of these laws,regulations and rules involve uncertainties.The PRC government has the power toexercise significant oversight and discretion over the conduct of our business,and the regulations to

193、which we are subject may change rapidly and with little notice tous or our shareholders.As a result,the application,interpretation,and enforcement of new and existing laws and regulations in the PRC are often uncertain.Inaddition,these laws and regulations may be interpreted and applied inconsistent

194、ly by different agencies or authorities,and inconsistently with our current policies andpractices.New laws,regulations,and other government directives in the PRC may also be costly to comply with,and such compliance or any associated inquiries orinvestigations or any other government actions may:Del

195、ay or impede our development,Result in negative publicity or increase our operating costs,Require significant management time and attention,and Subject us to remedies,administrative penalties and even criminal liabilities that may harm our business,including fines assessed for our current or histori

196、caloperations,or demands or orders that we modify or even cease our business practices.152025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm22/190 The promulgation of new laws or regulations

197、,or the new interpretation of existing laws and regulations,in each case that restrict or otherwise unfavorably impact theability or manner in which we conduct our business and could require us to change certain aspects of our business to ensure compliance,which could decrease demandfor our products

198、,reduce revenues,increase costs,require us to obtain more licenses,permits,approvals or certificates,or subject us to additional liabilities.To theextent any new or more stringent measures are required to be implemented,our business,financial condition and results of operations could be adversely af

199、fected aswell as materially decrease the value of our ordinary shares.If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-basedissuers,such action could significantly limit or completely hinder our abilit

200、y to offer or continue to offer securities to investors and cause the value of suchsecurities to significantly decline or be worthless.Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreigninv

201、estments in China based issuers.PRC has recently proposed new rules that would require companies collecting or holding large amounts of data to undergo acybersecurity review prior to listing in foreign countries,a move that would significantly tighten oversight over China-based internet giants.On Ju

202、ly 10,2021,theCAC issued a revised draft of the Measures for Cybersecurity Review for public comments,which required that,among others,in addition to“operator of criticalinformation infrastructure”,any“data processor”controlling personal information of no less than one million users which seeks to l

203、ist in a foreign stock exchangeshould also be subject to cybersecurity review,and further elaborated the factors to be considered when assessing the national security risks of the relevant activities.Later on December 28,2021,the Measures for Cybersecurity Review(2021 version)was promulgated and bec

204、ame effective on February 15,2022,which iterates thatany“online platform operators”controlling personal information of more than one million users which seeks to list in a foreign stock exchange should also be subjectto cybersecurity review.On November 14,2021,the CAC published the Network Internet

205、Data Protection Draft Regulations(draft for comments),which reiteratesthat data handlers that process the personal information of more than one million users listing in a foreign country should apply for a cybersecurity review.Our business does not involve the collection of user data,implicate cyber

206、security,or involve any other type of restricted industry and we do not believe we are amongthe“operator of critical information infrastructure”,“data processor”,“online platform operators”or“data handler”as mentioned above.However,since the Measuresfor Cybersecurity Review(2021 version)was newly ad

207、opted and the Network Internet Data Protection Draft Regulations(draft for comments)is in the process ofbeing formulated,it is unclear on how it will be interpreted,amended and implemented by the relevant PRC governmental authorities.Thus we could not assure youthat we will not be deemed as the“oper

208、ator of critical information infrastructure”,“data processor”,“online platform operators”or“data handler”as mentioned above.We believe that,as of the date of this Annual Report,the Company and its subsidiaries,(1)are not required to obtain permissions or approvals from any PRCauthorities to operate

209、or issue our Ordinary Shares to foreign investors;and(2)are not subject to permission requirements from the China Securities RegulatoryCommission(the“CSRC”),the Cyberspace Administration of China(the“CAC”)or any other entity that is required to approve of our operations.As of the date ofthis Annual

210、Report,we and our PRC subsidiaries have not been involved in any investigations on cybersecurity review initiated by the CAC or related governmentalregulatory authorities,and have not received any requirements to obtain permissions from any PRC authorities to issue our ordinary shares to foreign inv

211、estors orwere denied such permissions by any PRC authorities.Uncertainties still exist due to the possibility that laws,regulations,or policies in the PRC could change rapidlyin the future.Any future action by the PRC government expanding the categories of industries and companies whose foreign secu

212、rities offerings are subject to reviewby the CRSC or the CAC could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of suchsecurities to significantly decline or be worthless.162025/7/3 15:07sec.gov/Archives/edgar/da

213、ta/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm23/190 If the Chinese government were to impose new requirements for approval from the PRC Authorities to issue our ordinary shares to foreign investors or liston a foreign excha

214、nge,such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause thevalue of such securities to significantly decline or be worthless.Recently,the General Office of the Central Committee of the Communist Party of China and the

215、 General Office of the State Council jointly issued the“Opinions onSeverely Cracking Down on Illegal Securities Activities According to Law,”or the Opinions,which was made available to the public on July 6,2021.The Opinionsemphasized the need to strengthen the administration over illegal securities

216、activities,and the need to strengthen the supervision over overseas listings by Chinesecompanies.Effective measures,such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-conceptoverseas listed companies,and cybersecurity and dat

217、a privacy protection requirements and similar matters.On December 24,2021,the CSRC released the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of Securities by DomesticEnterprises(Draft for Comments)and the Measures for the Overseas Issuance of Securities

218、and Listing Record-Filings by Domestic Enterprises(Draft forComments),which were published for public comments only with the comment period expired on January 23,2022.The Draft Rules Regarding Overseas Listing layout the filing regulation arrangement for both direct and indirect overseas listing,and

219、 clarify the determination criteria for indirect overseas listing in overseas market.The Draft Rules Regarding Overseas Listing stipulate that the Chinese-based companies,or the issuer,shall fulfill the filing procedures within three working daysafter the issuer makes an application for initial publ

220、ic offering and listing in an overseas market.The required filing materials for an initial public offering and listingshould include at least the following:record-filing report and related undertakings;regulatory opinions,record-filing,approval and other documents issued bycompetent regulatory autho

221、rities of relevant industries(if applicable);and security assessment opinion issued by relevant regulatory authorities(if applicable);PRClegal opinion;and prospectus.In addition,an overseas offering and listing is prohibited under any of the following circumstances:(1)if the intended securities offe

222、ring and listing is specificallyprohibited by national laws and regulations and relevant provisions;(2)if the intended securities offering and listing may constitute a threat to or endangers nationalsecurity as reviewed and determined by competent authorities under the State Council in accordance wi

223、th law;(3)if there are material ownership disputes over theequity,major assets,and core technology,etc.of the issuer;(4)if,in the past three years,the domestic enterprise or its controlling shareholders or actual controllershave committed corruption,bribery,embezzlement,misappropriation of property,

224、or other criminal offenses disruptive to the order of the socialist market economy,orare currently under judicial investigation for suspicion of criminal offenses,or are under investigation for suspicion of major violations;(5)if,in past three years,directors,supervisors,or senior executives have be

225、en subject to administrative punishments for severe violations,or are currently under judicial investigation forsuspicion of criminal offenses,or are under investigation for suspicion of major violations;(6)other circumstances as prescribed by the State Council.TheAdministration Provisions defines t

226、he legal liabilities of breaches such as failure in fulfilling filing obligations or fraudulent filing conducts,imposing a fine betweenRMB 1 million and RMB 10 million,and in cases of severe violations,a parallel order to suspend relevant business or halt operation for rectification,revoke relevantb

227、usiness permits or operational license.172025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm24/190 However,as of the date of this Annual Report,the Draft Rules Regarding Overseas Listing hav

228、e not yet gone into effect,it is still uncertain how PRC governmentalauthorities will regulate overseas listing in general and whether we are required to obtain any specific regulatory approvals or to fulfill any record-filing requirements.The Draft Rules Regarding Overseas Listing,if enacted,may su

229、bject us to additional compliance requirement in the future,and we cannot assure you that we will beable to get the clearance of filing procedures under the Draft Rules Regarding Overseas List on a timely basis,or at all.If we do not receive any required approvals orrecord-filing or if we incorrectl

230、y conclude that approvals or record-filing are not required or if the CSRC or other regulatory agencies promulgate new rules,explanations or interpretations requiring that we obtain their prior approvals or ex-post record-filing for this offering and any follow-on offering,we may be unable toobtain

231、such approvals and record-filing which could significantly limit or completely hinder our ability to offer or continue to offer securities to our investors.Furthermore,the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign invest

232、ment in China-based issuers like us.Such actions taken by the PRC government authorities may intervene or influence our operations at any time,which are beyond our control.Therefore,any such action may adversely affect our operations and significantly limit or hinder our ability to offer or continue

233、 to offer securities and reduce the valueof such securities.As of the date of this Annual Report,we and our PRC subsidiaries have not been involved in any investigations on cybersecurity review initiated by the CyberAdministration of China or related governmental regulatory authorities,and have not

234、received any requirements to obtain permissions from any PRC authorities toissue our Ordinary Shares to foreign investors or were denied such permissions by any PRC authorities.However,given the current PRC regulatory environment,it isuncertain when and whether we or our PRC subsidiaries,will be req

235、uired to obtain permission from the PRC government to list on U.S.exchanges in the future,andeven when such permission is obtained,whether it will be denied or rescinded.We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC gove

236、rnmental authoritiesrequired for overseas listings,including this offering.As of the date of this Annual Report,except for the potential uncertainties disclosed above,we have not receivedany inquiry,notice,warning,sanctions or regulatory objection to this offering from the CSRC or other PRC governme

237、ntal authorities.However,there remainssignificant uncertainty as to the enactment,interpretation and implementation of regulatory requirements related to overseas securities offerings and other capitalmarkets activities.If it is determined in the future that the approval of the CSRC,the CAC or any o

238、ther regulatory authority is required for this offering,the offeringwill be delayed until we have obtained the relevant approvals.There is also the possibility that we may not be able to obtain or maintain such approval or that weinadvertently concluded that such approval was not required.If the app

239、roval was required while we inadvertently concluded that such approval was not required or ifapplicable laws and regulations or the interpretation of such were modified to require us to obtain the CSRC approval in the future,we may face sanctions by theCSRC,the CAC or other PRC regulatory agencies.T

240、hese regulatory agencies may impose fines and penalties on our operations in China,limit our ability to paydividends outside of China,limit our operations in China,delay or restrict the repatriation of the proceeds from this offering into China or take other actions that couldhave a material adverse

241、 effect on our business,financial condition,results of operations and prospects,as well as the trading price of our securities.The CSRC,theCAC,or other PRC regulatory agencies also may take actions requiring us,or making it advisable for us,to halt this offering before settlement and delivery of our

242、ordinary shares.Consequently,if you engage in market trading or other activities in anticipation of and prior to settlement and delivery,you do so at the risk thatsettlement and delivery may not occur.In addition,if the CSRC,the CAC or other regulatory PRC agencies later promulgate new rules requiri

243、ng that we obtain theirapprovals for this offering,we may be unable to obtain a waiver of such approval requirements,if and when procedures are established to obtain such a waiver.Anyuncertainties and/or negative publicity regarding such an approval requirement could have a material adverse effect o

244、n the trading price of our securities.182025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm25/190 Changes in Chinas economic,political or social conditions or government policies could have

245、a material adverse effect on our business and operations.All of our assets and operations are located in China.Accordingly,our business,financial condition,results of operations and prospects may be influenced to asignificant degree by political,economic and social conditions in China generally.The

246、Chinese economy differs from the economies of most developed countries inmany respects,including the level of government involvement,level of development,growth rate,control of foreign exchange and allocation of resources.Althoughthe Chinese government has implemented measures emphasizing the utiliz

247、ation of market forces for economic reform,the reduction of state ownership of productiveassets,and the establishment of improved corporate governance in business enterprises,a substantial portion of productive assets in China is still owned by thegovernment.In addition,the Chinese government contin

248、ues to play a significant role in regulating industry development by imposing industrial policies.The Chinesegovernment also exercises significant control over Chinas economic growth through allocating resources,controlling payment of foreign currency-denominatedobligations,setting monetary policy,a

249、nd 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 theeconomy,and the rate of growth has been slowing since 2012.Any adver

250、se changes in economic conditions in China,in the policies of the Chinese government or inthe laws and regulations in China could have a material adverse effect on the overall economic growth of China.Such developments could adversely affect ourbusiness and operating results,lead to reduction in dem

251、and for our services and adversely affect our competitive position.The Chinese government has implementedvarious measures to encourage economic growth and guide the allocation of resources.Some of these measures may benefit the overall Chinese economy but mayhave a negative effect on us.For example,

252、our financial condition and results of operations may be adversely affected by government control over capital investmentsor changes in tax regulations.In addition,in the past the Chinese government has implemented certain measures,including interest rate adjustment,to control the paceof economic gr

253、owth.These measures may cause decreased economic activity in China,which may adversely affect our business and operating results.We may incur material product liability claims,which could increase our costs and harm our financial condition and operating results.Our ingestible products include milk t

254、histle extracts,apple polyphenol and other ingredients and are classified as foods or raw materials of dietary supplements and,unlike prescription medication,our product formulas are not subject to pre-market regulatory approval with respect to medical efforts in China in which our productsare distr

255、ibuted.Our products could contain contaminated substances,and some of our products contain some ingredients that do not have long histories of humanconsumption.We rely upon published and unpublished safety information including clinical studies on ingredients used in our products.These studies inclu

256、de“Safetyand toxicity of silymarin,the major constituent of milk thistle extract:An updated review”available at https:/ toxicology and safety of apple polyphenol extract”available at https:/ Announcement Regarding Haematococcus Pluvialis and Other New Resource Food”Evaluation Division of Food Safety

257、 Standard and Inspection,”No.17issued on October 29,2010 available at http:/ that Stachyose is a safe ordinary food)and other reports by independent research institutions.In addition,stachyose is permitted for ordinary food production by the Ministry of Health of China.We do not,however,conduct or s

258、ponsor clinical studies of our products.Previously unknown adverse reactions resulting from human consumption of these ingredients could occur.As a marketer of dietary and nutritional supplements andother products that are ingested by consumers or applied to their bodies,we may be subjected to vario

259、us product liability claims,including that(i)the products containcontaminants,(ii)the products include inadequate instructions as to their uses,or(iii)the products include inadequate warnings concerning side effects andinteractions with other substances.It is possible that widespread product liabili

260、ty claims could increase our costs,and adversely affect our revenues and operatingincome.192025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm26/190 Food safety regulations regarding the raw

261、 ingredients for our products may restrict,inhibit or delay our ability to sell our products.Before 2018,the China Food and Drug Administration,or the CFDA,had the regulatory authority to oversee,administer and enforce all laws,regulations and rulesconcerning the food industry business operations in

262、 China.After the institutions reformed,the CFDA has been abolished,and relevant regulatory authority has beentaken over by the State Administration for Market Regulation,or the SAMR,under the State Council.The food industry is subject to extensive regulations in China.The PRC laws and regulations go

263、verning the food industry primarily consist of the PRC Food SafetyLaw(2009),as last amended in 2018;the Implementation Regulation for the Food Safety Law of PRRC(2009),or the Food Safety Regulation,as amended in 2019;the Administrative Measures for Food Production Licensing(2010),or the Food Product

264、ion Licensing Rule,as amended in 2020;and the Administrative Measures forFood Business Licensing(2015),or the Food Business Licensing Rule,as amended in 2017.Under the PRC Food Safety Law and the Food Safety Regulation,foodproduct manufacturers and business operators shall obtain the required food p

265、roduction permits;food producers and business operators are subject to regular qualityinspection and supervision by the local governmental agencies and their product permits may be revoked if they no longer meet the standards and requirements forfood production and operation;food-producing enterpris

266、es shall establish and implement food safety management systems,such as ingredient inspection andacceptance,production process safety management,storage management,equipment management,and substandard product management systems;and packaging ofpre-packed food shall bear a label which states manufact

267、uring permit serial number;among other things.The State Council implements a licensing system for foodproduct manufacture and distribution.According to the Food Production Licensing Rule,a food production license must be obtained prior to engaging in foodproduction activities in the PRC.The Food Bus

268、iness Licensing Rule requires food business operators to obtain a food business license for each business entityengaging in food business operations.We have obtained the required Food Production Licenses and Food Business Licenses for related products.In order for ourbusiness to continue,we must con

269、tinue to comply with all government inspection and licensing requirements.If we were to have an unsatisfactory inspection,orotherwise fail to comply with government safety regulations in all respects,our ability to continue operations and to continue to sell our products may be inhibited ordelayed.A

270、dditionally,the term of Food Production Licenses and Food Business Licenses is 5 years.We have been closely monitoring the status of all the permits andhave applied for renewal before the relevant licenses expired.The failure to renew the relevant licenses and/or registrations may subject us to fine

271、s or sanctions whichwill have negative impact on our production.Any disruption of our factories or our suppliers factories could materially and adversely affect our business and results of operations.Currently,our products are primarily produced at our factories located in China.We also rely on our

272、suppliers to produce raw materials and components of ourproducts.Nevertheless,natural disasters or other unanticipated catastrophic events,including storms,fires,explosions,earthquakes,terrorist attacks and wars,as wellas changes in governmental planning for the land where our factories or our suppl

273、iers factories are located could significantly impair our ability to manufacture ourproducts and operate our business.Catastrophic events could also destroy the inventories stored in and those suppliers factories.The occurrence of any catastrophicevent could result in the temporary or long-term clos

274、ure of manufacturing facilities,and severely disrupt our business operations.202025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm27/190 In addition,the factories are subject to fire control

275、 and environmental inspections and regulations.As of the date of this Annual Report,we cannot assure you that allthe factories were in strict compliance with such fire control and environmental inspections and regulations based on our knowledge.If such facilities fail to rectifyand pass the fire con

276、trol and environmental inspections or comply with relevant fire control and environmental requirements relating to production activities in atimely manner,they may be subject to fines,cohesive rectification,suspension and closure,which may materially and adversely affect the production of our factor

277、iesand in turn may impact our business.In the event of any changes in the PRC laws and/or regulations and/or government policies on environmental protection andmore stringent requirements are imposed on Company,we may have to incur extra costs and expenses to comply with such requirements and our bu

278、siness and resultsof operations may be adversely affected.In addition,such facilities are also subject to health and safety laws and regulations imposed by the PRC governmentalauthorities to ensure a healthy and safe production environment.Failure to comply with the existing and future health and sa

279、fety laws and regulations could subject thefactories to monetary damages and fines,disruption to production plans,suspension of their operations,which may in turn materially and adversely affect our businessoperations.Furthermore,if any on-site personnel at such facilities is suspected of having any

280、 communicable diseases,such as COVID-19,such facilities may besubject to temporary closure and quarantine requirements,which may in turn materially and adversely affect our business operations.Furthermore,various special equipment,such as boilers,pressure vessels,pressure pipes,and elevators,was in

281、use on-site in these factories,which involve a highdegree of safety risks.Proprietors using special equipment shall,before or within 30 days after such special equipment is put into use,handle registration with thedepartment in charge of the supervision and administration of special equipment safety

282、 and obtain the registration license.The operators and relevant managerial staffmay not engage in corresponding operations or management until they pass certain examination and acquire the certificates of special operators.As of the date of thisAnnual Report,we cannot assure you that all such specia

283、l equipment has been registered with the local governmental authorities as legally required or all operatorsand relevant managerial staff have obtained relevant qualifications.Failure to comply with such regulations may subject the factories to orders to take correctiveaction within a stipulated tim

284、e,fines and suspension of their operations,which may in turn materially and adversely affect our business operations.Besides,some of our factories are located on leased properties.Though such leases are renewable upon expiration,our ability to renew existing leases upon theirexpiration is crucial to

285、 our production activities,operations and profitability.If we are unable to negotiate for a renewal of the relevant leases,we may be forced torelocate our production bases and it may be difficult and costly to replace or relocate our factories and equipment on a timely basis.We have not registered t

286、he leaseagreement relating to our factories and offices with the PRC governmental authorities as required by PRC law and thus we may be ordered by the PRC governmentauthorities to rectify such noncompliance or we may be subject to fines imposed by PRC government authorities.See also“We are subject t

287、o risks relating to ourleased properties.”If we experience any unanticipated disruptions to us or our suppliers or if we are unable to renew our current leases,our production will be severely disrupted,whichmay in turn materially and adversely affect our business,financial condition and results of o

288、perations.212025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm28/190 We are subject to risks relating to our leased properties.We lease certain real properties from third parties primarily

289、for our production facilities and offices in China,and such lease agreements for these properties have notbeen registered with the PRC governmental authorities as required by PRC law.Although the failure to do so does not in itself invalidate the leases,we may beordered by the PRC government authori

290、ties to rectify such noncompliance and,if such noncompliance is not rectified within a given period of time,we may be subjectto fines imposed by PRC government authorities ranging from RMB1,000 and RMB10,000 for each lease agreement that has not been registered with the relevantPRC governmental auth

291、orities.The ownership certificates or other similar proof of our leased properties have not been provided to us by the relevant lessors.Therefore,we cannot assure you thatsuch lessors are entitled to lease the relevant real properties to us.If the lessors are not entitled to lease the real propertie

292、s to us and the owners of such real propertiesdecline to ratify the lease agreements between us and the respective lessors,we may not be able to enforce our rights to lease such properties under the respective leaseagreements against the owners.As of the date of this Annual Report,we are not aware o

293、f any claim or challenge brought by any third parties concerning the use of ourleased properties without obtaining proper ownership proof.If our lease agreements are claimed as null and void by third parties who are the real owners of suchleased real properties,we could be required to vacate the pro

294、perties,in the event of which we could only initiate the claim against the lessors under relevant leaseagreements for indemnities for their breach of the relevant leasing agreements.We cannot assure you that suitable alternative locations are readily available oncommercially reasonable terms,or at a

295、ll,and if we are unable to relocate our officers in a timely manner,our operations may be interrupted.We may not be able to protect our intellectual property rights.We rely on a combination of trademark,fair trade practice,patent,copyright and trade secret protection laws in China.Intellectual prope

296、rty protection may not besufficient in China.Accordingly,we may not be able to effectively protect our intellectual property rights or to enforce our patent rights in China.In addition,policingany unauthorized use of our intellectual property is difficult,time-consuming and costly and the steps we h

297、ave taken may be inadequate to prevent themisappropriation of our intellectual property.In the event that we resort to litigation to enforce our intellectual property rights,such litigation could result insubstantial costs and a diversion of our managerial and financial resources.We can provide no a

298、ssurance that we will prevail in such litigation.In addition,our tradesecrets may be leaked or otherwise become available to,or be independently discovered by,our competitors.Any failure in protecting or enforcing our intellectualproperty rights could have a material adverse effect on our business,f

299、inancial condition and results of operations.222025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm29/190 Uncertainties with respect to the PRC legal system could adversely affect us.The PRC

300、legal system is a civil law system based on written statutes.Unlike the common law system,prior court decisions under the civil law system may be cited forreference but have limited precedential value.In 1979,the PRC government began to promulgate a comprehensive system of laws and regulations gover

301、ning economic matters in general.The overall effect oflegislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investments in China.However,China has notdeveloped a fully integrated legal system,and recently enacted laws and regulations m

302、ay not sufficiently cover all aspects of economic activities in China.Inparticular,the interpretation and enforcement of these laws and regulations involve uncertainties.Since PRC administrative and court authorities have significantdiscretion in interpreting and implementing statutory provisions an

303、d contractual terms,it may be difficult to evaluate the outcome of administrative and courtproceedings and the level of legal protection we enjoy.These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforceour contractual rights or tort claims.In addi

304、tion,the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts toextract payments or benefits from us.Furthermore,the PRC legal system is based in part on government policies and internal rules,some of which are not published on a timely basis

305、or at all and may haveretroactive effect.As a result,we may not be aware of our violation of any of these policies and rules until sometime after the violation.In addition,any administrativeand court proceedings in China may be protracted,resulting in substantial costs and diversion of resources and

306、 management attention.You may experience difficulties in effecting service of legal process,enforcing foreign judgments or bringing actions in China against us or our managementnamed in the report based on foreign laws.We are a company incorporated under the laws of the Cayman Islands,we conduct sub

307、stantially all of our operations in China,and substantially all of our assets arelocated in China.In addition,all our senior executive officers reside within China for a significant portion of the time and most are PRC nationals.As a result,it maybe difficult for our shareholders to effect service o

308、f process upon us or those persons inside China.In addition,China does not have treaties providing for thereciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and regions.Therefore,recognition andenforcement in China of judgments of a court i

309、n any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may bedifficult or impossible.232025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.

310、htm30/190 Shareholder claims that are common in the United States,including securities law class actions and fraud claims,generally are difficult to pursue as a matter of law orpracticality in China.For example,in China,there are significant legal and other obstacles to obtaining information needed

311、for shareholder investigations or litigationoutside China or otherwise with respect to foreign entities.According to Article 177 of the PRC Securities Law which was amended in December 2019,no overseassecurities regulator is allowed to directly conduct investigation or evidence collection activities

312、 within the territory of the PRC.Accordingly,without the consent of thecompetent PRC securities regulators and relevant authorities,no organization or individual may provide the documents and materials relating to securities businessactivities to overseas parties,leaving no mechanism to obtain infor

313、mation or conduct an investigation,if necessary.We may rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have,and anylimitation on the ability of our PRC subsidiary to make payments to us could have a material and advers

314、e effect on our ability to conduct our business.We are a Cayman Islands holding company and we rely principally on dividends and other distributions on equity from our PRC subsidiary for our cash requirements,including for services of any debt we may incur.Our subsidiarys ability to distribute divid

315、ends is based upon its distributable earnings.Current PRC regulationspermit our PRC subsidiary to pay dividends to their respective shareholders only out of their accumulated profits,if any,determined in accordance with PRCaccounting standards and regulations.In addition,our PRC subsidiary and its s

316、ubsidiaries are required to set aside at least 10%of their after-tax profits each year,ifany,to fund a statutory reserve until such reserve reaches 50%of their registered capital.These reserves are not distributable as cash dividends.A company maydiscontinue the contribution when the aggregate sum o

317、f the statutory surplus reserve is more than 50%of its registered capital.The statutory common reserve fund ofa company shall be used to cover the losses of the company,expand the business and production of the company or be converted into additional capital.Subject toabove-referenced limitations an

318、d at the discretion of board of directors,the accumulated profits after appropriation of statutory surplus reserve available for dividendswere$18,741,685 and$18,703,996 as of September 30,2024 and 2023,respectively.If our PRC subsidiary incurs debt on its own behalf in the future,the instrumentsgove

319、rning the debt may restrict its ability to pay dividends or make other payments to us.Any limitation on the ability of our PRC subsidiary to distribute dividends orother payments to its shareholders could materially and adversely limit our ability to grow,make investments or acquisitions that could

320、be beneficial to our businesses,pay dividends or otherwise fund and conduct our business.As of September 30,2024,the statutory surplus reserves of our PRC subsidiary and its subsidiaries,aspercentage of their respective registered capitals,ranged from 2%to 41%and averaged 25%in the aggregate.To addr

321、ess the persistent capital outflow and the RMBs depreciation against the U.S.dollar in the fourth quarter of 2016,the Peoples Bank of China and the StateAdministration of Foreign Exchange,or SAFE,have implemented a series of capital control measures in the subsequent months,including stricter vettin

322、g proceduresfor China-based companies to remit foreign currency for overseas acquisitions,dividend payments and shareholder loan repayments.For instance,the Circular onFurther Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification,or the SAFE Circu

323、lar 3,issued on January26,2017,provides that the banks shall,when dealing with dividend remittance transactions from domestic enterprise to its offshore shareholders of more thanUS$50,000,review the relevant board resolutions,original tax filing form and audited financial statements of such domestic

324、 enterprise based on the principal ofgenuine transaction.The PRC government may continue to strengthen its capital controls and our PRC subsidiarys dividends and other distributions may be subject totightened scrutiny in the future.Any limitation on the ability of our PRC subsidiary to pay dividends

325、 or make other distributions to us could materially and adverselylimit our ability to grow,make investments or acquisitions that could be beneficial to our business,pay dividends,or otherwise fund and conduct our business.242025/7/3 15:07sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-

326、fa.htmhttps:/www.sec.gov/Archives/edgar/data/1816815/000164117225004960/form20-fa.htm31/190 In addition,the PRC Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10%will be applicable to dividends payableby Chinese companies to non-PRC-resident enterp

327、rises unless reduced under treaties or arrangements between the PRC central government and governments of othercountries or regions where the non-PRC resident enterprises are tax resident.Pursuant to the Arrangement between Mainland China and the Hong Kong SpecialAdministrative Region for the Avoida

328、nce of Double Taxation and Tax Evasion on Income,the withholding tax rate in respect to the payment of dividends by a PRCenterprise to a Hong Kong enterprise may be reduced to 5%from a standard rate of 10%if,among other requirements,the Hong Kong enterprise directly holds atleast 25%of the PRC enter

329、prise.Under the Circular of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of TaxAgreements,or SAT Circular 81,promulgated by the State Administration of Taxation,or the SAT,on February 20,2009,a Hong Kong resident enterprise must meetthe follow

330、ing conditions,among others,in order to apply the reduced withholding tax rate:(i)it must be a company;(ii)it must directly own the required percentageof equity interests and voting rights in the PRC resident enterprise;and(iii)it must have directly owned such required percentage in the PRC resident

331、 enterprisethroughout the 12 months prior to receiving the dividends.Nonresident enterprises are not required to obtain pre-approval from the relevant tax authority in order toenjoy the reduced withholding tax.Instead,nonresident enterprises and their withholding agents may,by self-assessment and on

332、 confirmation that the prescribedcriteria to enjoy the tax treaty benefits are met,directly apply the reduced withholding tax rate,and file necessary forms and supporting documents when performingtax filings,which will be subject to post-tax filing examinations by the relevant tax authorities.Accord

333、ingly,our Hong Kong subsidiary may be able to benefit fromthe 5%withholding tax rate for the dividends it receives from our PRC subsidiary,if it satisfies the conditions prescribed under the SAT Circular 81,and otherrelevant tax rules and regulations.However,if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying afavorable tax trea