RISK FACTORS

You should carefully consider the risks described below and elsewhere in this report, which could materially and adversely affect our business, results of operations or financial condition. Our business faces significant risks and the risks described below may not be the only risks we face. Additional risks not presently known to us or that we currently believe are immaterial may materially affect our business, results of operations, or financial condition. If any of these risks occur, the trading price of our common stock could decline and you may lose all or part of your investment.

Risk relating to our Business and Industry;

If we fail to stay current with new smart phone and mobile device technologies our apps could become obsolete

Smartphone and mobile devices are evolving rapidly. We incur significant costs for research and development not only for the creation of new products, but also for ensuring that our current products will be compatible with new technologies. If our research and development team fails to upgrade our products to stay current with new technologies, our apps could become obsolete, which could result in a material adverse impact on our business and results of operations.

If the use our Mo-Coins becomes restricted or unavailable, our business may be materially and adversely affected.

We are planning to use Moxian virtual currency to conduct substantially all of the payment processing on our platform. We track the User behaviors by the usage of Mo-Coins. If the use of virtual currency is limited or restricted in any way or becomes unavailable to us for any reason, the accuracy of our User behavior data may be comprised, and our business could be therefore materially and adversely affected.

The cross-border online shopping market in China is continuing to grow and may become a new competitor to the Chinese consumer goods market.

Currently, all of our Merchant Clients are located in China. As access to cross-border online shopping is made available in China, Chinese consumers may begin to purchase goods outside of China and as a result, the demand for products by Chinese merchants may decline.

We compete with other IT companies which can develop similar technologies and online-to-offline applciations to identify consumer behavior.

We are not the only company that analyzes consumer behavior and provides such data to clients. There are other companies that have similar technology or are developing superior technology that can be used in the same or more advantageous ways. We cannot assure you that the market will not become saturated with similar applications, or that our research and development efforts will give us an advantage over these other companies. We rely on our marketing efforts to sell our application and platform over our competitors, but if we are not successful in such efforts our business and results of operations could be significantly harmed.

We depend on our key executives, and our business and growth may be severely disrupted if we lose their services.

Our future success depends substantially on the continued services of our key executives. In particular, we are highly dependent upon Mr. Tan Meng Dong, James, our chairman, chief executive officer and president, who has established relationships within the industries we operate. If we lose the services of one or more of our current executive officers, we may not be able to replace them readily, if at all, with suitable or qualified candidates, and may incur additional expenses to recruit and retain new officers with industry experience similar to our current officers, which could severely disrupt our business and growth. In addition, if any of our executives joins a competitor or forms a competing company, we may lose some of our suppliers or customers. Furthermore, as we expect to continue to expand our operations and develop new products, we will need to continue attracting and retaining experienced management and key research and development personnel.

Competition for qualified candidates could cause us to offer higher compensation and other benefits in order to attract and retain them, which could have a material adverse effect on our financial condition and results of operations. We may also be unable to attract or retain the personnel necessary to achieve our business objectives, and any failure in this regard could severely disrupt our business and growth.

The technology behind our products contains important trade secrets and know-how, and our ability to compete could be harmed if any such trade secrets and know-how are disclosed to third parties by our engineer.

We regard our trademarks, patents, copyrights and other intellectual property as critical to our success. In particular, we have spent a significant amount of time and resources in developing Moxian+ and our ability to protect our proprietary rights in connection with our platform and apps is critical for the success of our features and services and our overall financial performance. We expect to apply for additional patents, copyrights and trademarks as we continue the development of our platform. However, we cannot assure you that our measures will be sufficient to protect our proprietary information and intellectual property. Implementation of intellectual property laws in China has historically been lacking, primarily because of ambiguities in the laws and difficulties in enforcement.

We may be subject to intellectual property rights disputes, which could adversely affect our business, results of operations and financial condition.

We could face infringement claims from our competitors or others alleging that our methods, processes or products infringe on their proprietary technologies. If we are found to be infringing on the proprietary technology of others, we may be liable for damages, and we may be required to make changes, to redesign our products partially or completely, to pay to use the technology of others or to stop using certain technologies or producing the alleged infringing product(s) entirely. Even if we ultimately prevail in an infringement suit, the existence of the suit could prompt our Merchant Clients and Users to switch to products that are not the subject of infringement suits. We may not prevail in any intellectual property litigation and such litigation may result in significant legal costs or otherwise impede our ability to market our services.

We cannot ensure that we have properly registered our intellectual property, or that it has been registered in certain jurisdictions where we do business.

Some of our technologies are not covered by any patent or patent application and, even if a patent application has been filed, it may not result in an issued patent. If patents are issued to us, those patents may not provide meaningful protection against competitors or against competitive technologies. In addition, upon the expiration of patents issued to us, we will be unable to prevent our competitors from using or introducing products using the formerly-patented technology. As a result, we may be faced with increased competition and our results of operations may be adversely affected. We cannot assure you that our intellectual property rights will not be challenged, invalidated, circumvented or rendered unenforceable.

Third parties may infringe upon our intellectual property rights which the result of damage to our business reputation.

Protection of our methods and technology is important to our business. We generally rely on a combination of the patent, trade secret, trademark and copyright laws of the PRC, the U.S. and Hong Kong as well as licenses and nondisclosure and confidentiality agreements, to protect our intellectual property rights. The patent, trademark, copyright and trade secret laws of some countries, though, including the PRC and Hong Kong, may not protect our intellectual property rights to the same extent as the laws of the U.S.

Failure to protect our intellectual property rights may result in the loss of valuable proprietary technologies. Even with safeguards in place, it may be possible for third parties to obtain and use our intellectual property without authorization. The unauthorized use of intellectual property is widespread in China, and enforcement of intellectual property rights by Chinese regulatory agencies is inconsistent. Moreover, litigation may be necessary in the future to enforce our intellectual property rights. Future litigation could result in substantial costs and diversion of our management’s attention and resources and could disrupt our business. If we are unable to enforce our intellectual property rights, it could have a material adverse effect on our financial condition and results of operations. Given the relative unpredictability of China’s legal system and potential difficulties enforcing a court judgment in China, we may be unable to halt the unauthorized use of our intellectual property through litigation. Failure to adequately protect our intellectual property could materially adversely affect our competitive position, our ability to attract students and our results of operations.

If China adopts privacy laws, they may impact our ability to provide our current data analytics features to Merchant Clients or to develop new uses for such data analytics.

We use our User data to develop an analysis software. Such data primarily comes from User conversations in our chat room and the personal information supplied when they register to use the app. This data can be analyzed and converted into useful information for us and our Merchant Clients only when we possess a large amount of accurate data. The research process may be deemed to violate the privacy of our Users. Currently, there are no PRC privacy laws governing how such data may be compiled, analyzed or used. If a law is adopted that imposes restrictions on our ability to conduct the analysis and promote data analytics to our Merchant Clients and to develop new products based on such data, our sales and results of operations could be materially adversely affected.

If the chops of our subsidiaries and VIEs in China are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of those entities could be severely and adversely compromised.

In China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered company in China is required to have a company chop, which must be registered with the local Public Security Bureau. Our company chops, or chops, are kept securely at our President’s Office under the direction of Chief Executive Officer at the headquarters level or held securely by personnel designated and approved by the General Manager or Headmaster at subsidiaries’ or the VIEs level. Use of chops requires proper approvals in accordance with our internal control procedures. The custodian at the President’s Office also maintains a log to keep a detailed record of each use of the chops. Moreover, the President’s Office is always locked after office hours and only authorized persons have the access to the keys.

The company believes it has sufficient controls in place over access to and use of the chops. We, however, cannot assure you that unauthorized access to or use of those chops can be totally precluded. To the extent those chops are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised and the operations of these entities could be significantly and adversely impacted.

Our operating subsidiaries are established outside the US, and as a result we must convert accounts in the preparation of our financial statements in conformity with U.S. GAAP for financial reporting purposes. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanctions, cause investors to lose confidence in our reported financial information and have a negative effect on the market price of our shares.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We maintain a system of internal controls over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

As a public company, we have significant additional requirements for enhanced financial reporting and internal controls and are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting. In addition, an independent registered public accounting firm will be required to attest to the effectiveness of our internal controls over financial reporting beginning with our annual report on Form 10-K following the date on which we become an accelerated filer or large accelerated filer. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.

We cannot assure you that we will not, in the future, identify areas requiring improvement in our internal controls over financial reporting. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanctions, cause investors to lose confidence in our reported financial information and have a material adverse effect on the market price of our shares.

Risks Related to Our Corporate Structure

If the Peoples Republic of China (‘PRC’) government does not agree that our contractual arrangement with Shenzhen Moyi Technologies Co Ltd. complies with PRC laws, rules and regulations we could face severe penalties.

Foreign investment in the businesses we operate, including telecommunications and Internet information services, is currently prohibited or restricted in China. As a U.S. corporation, we are restricted or prohibited from directly owning all of the equity interests in any PRC company engaged in internet- related businesses. See “Regulation.” As a result, our business in China is operated by our VIE, Shenzhen Moyi Technologies Co Ltd (“Moyi”) through contractual arrangements. Moyi holds the relevant internet content provider, or ICP licenses which permits Moyi to engage in the business in China and is currently owned by PRC citizens and/or PRC companies. We have been and expect to continue to be dependent on Moyi to operate this business. We do not have any equity interest in Moyi, but we control their operations and receive substantially all the economic benefits and bear substantially all the economic risks through a series of contractual arrangements.

There are uncertainties regarding the interpretation and application of current and future PRC laws, rules and regulations, including but not limited to the laws, rules and regulations governing the validity and enforcement of our contractual arrangements with Moyi. Our current contractual arrangements must also comply with laws and regulations applicable to the Internet industry.

In August 2011, the Ministry of Commerce, or MOFCOM, promulgated the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the MOFCOM Security Review Rules, to implement the Notice of the General Office of the State Council on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or Circular No. 6, promulgated on February 3, 2011. Under these rules, a security review by MOFCOM is required for foreign investors’ mergers and acquisitions that have “national defense and security” implications and mergers and acquisitions by which foreign investors may acquire “de facto control” of domestic enterprises that have “national security” implications. The MOFCOM Security Review Rules further prohibit foreign investors from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. There is no explicit provision or official interpretation stating that our businesses fall within the scope of transactions subject to security review. We do not believe we are required to submit our existing contractual arrangements to MOFCOM for a security review. However, as there is a lack of clear statutory interpretation regarding the implementation of the rules, there is no assurance that MOFCOM will have the same view as we do when applying these national security review-related circulars and rules.

Moxian HK’s contractual arrangements may not be as effective in providing control over Moyi as direct ownership, and any failure by Moyi and its shareholders to perform their obligations under contractual arrangements would have material and adverse effects on our business.

We have no ownership interest in Moyi. We conduct substantially all of our operations and generate substantially all of our revenues through contractual arrangements that our subsidiary, Moxian HK, entered into with Moyi and its shareholders. The contractual arrangements are designed to provide us with effective control over Moyi. See “Our Corporate History and Structure” for a description of these contractual arrangements.

These contractual arrangements may not be as effective in providing control as direct ownership. For example, if Moyi or their respective shareholders fail to perform their respective obligations under these contractual arrangements, or if they take other actions that are detrimental to our interests, we may incur substantial costs and have to re-direct resources in connection with enforcing these arrangements. To enforce these arrangements, we may rely on legal remedies available under applicable PRC laws, including seeking specific performance or injunctive relief and claiming damages, but these remedies may not be effective. In particular, if shareholders of Moyi refuse to transfer their equity interests to us or our designated persons when we exercise the purchase option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us, then we may need to initiate legal action to compel them to fulfill their contractual obligations. In addition, we may not be able to renew these contracts with our VIE and/or its respective shareholders. If VIEs or their shareholders fail to perform the obligations secured by the pledges under the equity pledge agreements, one of the remedies for default is to require the pledgers to sell the equity interests of VIEs in an auction or sale of the shares and remit the proceeds to us, net of all related taxes and expenses. Such an auction or sale of the shares may not result in our receipt of the full value of the equity interests or the business of VIEs

In addition, as all of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through either arbitration or litigation in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. Any arbitration, legal proceedings or disputes may cost us substantial financial and other resources and result in disruption of our business, and the outcome might not be in our favor. The relevant PRC arbitration panel may conclude that our contractual arrangements violate PRC law or are otherwise unenforceable and we could consequently lose our ability to consolidate Moyi’s results of operations, assets and liabilities in our consolidated financial statements and/or to transfer the revenues of Moyi to Moxian HK. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit our ability to enforce these contractual arrangements. Under PRC law, prevailing parties in an arbitration proceeding may only enforce the arbitration award in Chinese courts through arbitration award recognition proceedings, which would cause us to incur additional expenses and delay. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over Moyi, and our ability to conduct our business may be materially and adversely affected.

Loss of or failure to obtain any license or permit necessary or desirable in the operation of our business could have a material adverse effect on our business and results of operations.

Moyi is required to obtain various operating licenses and permits and to make registrations and filings for our current business in China; failure to comply with these requirements may materially adversely affect our business operations. Moyi currently holds an Internet Content Provider, or ICP license, to provide information to online Internet users. In order to engage in and publish online games, Moxian was issued an Online Culture Operating Permit and an Internet Publications Distribution License. Web portals like Moxian are required to apply to and register with the General Administration for Press and Publication (“GAPP”), before distributing Internet publications. Internet publications include content or articles formally published by press media such as: (i) books, newspapers, periodicals, audio-visual products and electronic publications; and (ii) literature, art and articles on natural science, social science, engineering and other topics that have been edited. Moxian has applied for, but has not yet obtained, the license from GAPP that would enable it to distribute Internet publications.

If we are determined not to be in compliance with the applicable licensing requirements or if we fail to cure any non-compliance in a timely manner, we may be subject to fines, confiscation of the gains derived from our noncompliant operations or the suspension of our noncompliant operations, which may materially and adversely affect our business and results of operations.

We are a holding company organized in Nevada, with subsidiaries incorporated in Samoa, the British Virgin Islands, Hong Kong Malaysia & PRC corporations and all of our officers and directors reside outside the US. Therefore, investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in any of these jurisdictions based upon U.S. laws, including the federal securities laws or other foreign laws against us, our officers and directors.

All of our subsidiaries and our current operations are conducted outside of the United States. Moreover, all of our directors and officers are nationals and residents of China and Singapore. All or substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible to effect service of process within the United States or elsewhere upon these persons. In addition, uncertainty exists as to whether the courts outside of the U.S. would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in jurisdictions outside of the U.S. against us or such persons predicated upon the securities laws of the United States or any state thereof.

Risks Related to Doing Business in China

If the growth rate of the Chinese economy continues to slow down, the demand for products sold by our Merchant Clients may also slow down.

Moody’s Investors Service, which provides credit ratings and research covering debt instruments and securities, downgraded its outlook on the Chinese government debt from “stable” to “negative” which reflects an assumption that the Chinese economy is weakening and continues to slow down. A slowdown in the economy may lead to less demand by consumers for products offered by our Merchant Clients. If our Merchant Clients are impacted by the low demand, they may attempt to curtail expenses by cancelling subscriptions for our services, which could have a material adverse effect on our revenues, and negatively impact our results of operations.

Contract drafting, interpretation and enforcement in China involves significant uncertainty.

We have entered into numerous contracts governed by PRC law in the ordinary course of our business, many of which are material to our business. As compared with contracts in the United States, contracts governed by PRC law tend to contain less detail and are not as comprehensive in defining contracting parties’ rights and obligations. As a result, contracts in China are more vulnerable to disputes and legal challenges. In addition, contract interpretation and enforcement in China is not as developed as in the United States, and the result of any contract dispute is subject to significant uncertainties. Therefore, we cannot assure you that we will not be subject to disputes under our material contracts, and if such disputes arise, we cannot assure you that we will prevail. As almost all of our contracts in the ordinary course of business are governed by PRC law, any dispute involving such contracts, even those without merit, may materially and adversely affect our reputation and our business operations, and may cause the price of our shares to decline.

Governmental control of currency conversion may limit our ability to utilize our revenues effectively, whether for securing debt or to expand our business through acquisitions and development and for dividend payments to our shareholders, which may affect the value of your investment.

The PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in RMB. Under our current corporate structure, our Nevada holding company primarily relies on dividend payments from our wholly owned PRC subsidiary in China, Moxian Shenzhen, to fund any cash and financing requirements we may have.

Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval by complying with certain procedural requirements. Therefore, Moxian Shenzhen may pay dividends in foreign currency to us without pre-approval from SAFE. However, approval from or registration with government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. With the prior approval from SAFE, cash generated from the operations of our PRC subsidiary may be used to pay off debt owed to entities outside China in a currency other than RMB. The PRC government may, at its discretion, restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the common stock.

Payment of dividends is subject to restrictions under Nevada and the PRC laws.

Under Nevada law, we may only pay dividends subject to our ability to service our debts as they become due and provided that our assets will exceed our liabilities after the dividend. Our ability to pay dividends will therefore depend on our ability to generate sufficient profits. In addition, because of the various rules applicable to our operations in China and the regulations on foreign investments as well as the applicable tax law, we may be subject to further limitations on our ability to declare and pay dividends to our shareholders.

We can give no assurance that we will declare dividends of any amounts, at any rate or at all in the future. The declaration of future dividends, if any, will be at the discretion of our board of directors and will depend upon our future operations and earnings, capital requirements, general financial conditions, legal and contractual restrictions and other factors that our board of directors may deem relevant.

As we derive substantially all of our revenue from the PRC, any downturn in Chinese macroeconomic trends may harm our business.

All of our business operations are conducted in China and all of our revenues are generated in China. Accordingly, our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. The Chinese economy differs from the economies of most developed countries in many respects, including the amount of government involvement, the level of development, the growth rate, the control of foreign exchange, and the allocation of resources.

While the Chinese economy had grown significantly in the past 30 years, the growth has been uneven geographically among various sectors of the economy, and over the last year we have been experiencing a period of slowdown. We cannot assure you that China’s economy will continue to grow, or that if there is growth, such growth will be steady and uniform, or that if there is a slowdown, such slowdown will not have a negative effect on our business. The PRC government also exercises significant control over China’s economic growth by allocating resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Between late 2003 and 2008, the PRC government implemented a number of measures, such as increasing the PBOC’s statutory deposit reserve ratio and imposing commercial bank lending guidelines, which slowed the growth of credit. In 2008 and 2009, however, in response to the global financial crisis, the PRC government loosened such requirements. Any actions and policies adopted by the PRC government or any prolonged slowdown in China’s economy could have a negative impact on our business, operating results and financial condition in a number of ways.

The enforcement of labor contract law and increase in labor costs in the PRC may adversely affect our business and our profitability.

China adopted a labor contract law and its implementation rules effective on January 1, 2008 and September 18, 2008, respectively. The labor contract law and its implementation rules impose more stringent requirements on employers with regard to, among others, minimum wages, severance payments upon permitted terminations of the employment by an employer and non-fixed term employment contracts, time limits for probation period as well as the duration and the times that an employee can be placed on a fixed term employment contract. Due to the limited period of effectiveness of the labor contract law and its implementation rules, and the lack of clarity with respect to their implementation, potential penalties and fines, it is uncertain how they will impact our current employment policies and practices. Our employment policies and practices may violate the labor contract law or its implementation rules and we may be subject to related penalties, fines or legal fees. Compliance with the labor contract law and its implementation rules may increase our operating expenses, in particular our personnel expenses, as the continued success of our business depends significantly on our ability to attract and retain qualified personnel. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the labor contract law and its implementation rules may also limit our ability to effect those changes in a manner that we believe to be cost-effective or desirable, which could adversely affect our business and results of operations.

Additionally, PRC companies are subject to various laws and regulations regarding social insurance and housing funds, under which our PRC subsidiary and affiliates are required to pay employees’ pension contributions, housing funds, medical insurance premiums and other welfare-oriented payments.

We must comply with the Foreign Corrupt Practices Act.

We are required to comply with the United States Foreign Corrupt Practices Act, which prohibits U.S. companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including some of our competitors, are not subject to these prohibitions. In the foreseeable future, some of our suppliers may be owned by the PRC government and our dealings with them are likely to be considered to be with government officials for these purposes. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in mainland China. If our competitors engage in these practices, they may receive preferential treatment from personnel of some companies, giving our competitors an advantage in securing business or from government officials who might give them priority in obtaining new licenses, which would put us at a disadvantage. We could suffer severe penalties if our employees or other agents were found to have engaged in such practices.

Risks Related to this Offering

Prior to this offering, we had a limited public market for our shares of common stock and you may not be able to resell our shares at or above the price you paid, or at all.

Prior to this offering, there was a limited public market for our common stock in the OTC Market. We cannot assure you that an active public market for our common stock will develop or that the market price of our shares will not decline below the public offering price. The public offering price of our shares will be determined in large part by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the trading market following the offering. We cannot assure you that an active trading market for our shares will develop or that the market price of our shares will not decline below the public offering price.

Our Chairman of the Board and our Chief Executive Officer, Mr. Mengdong Tan, own a large percentage of our outstanding stock and could significantly influence the outcome of our corporate matters.

Mr. James Mengdong Tan, our Chairman and CEO, through Good Eastern Investment beneficially owns 55% of our outstanding shares of common stock, and after this offering will beneficially own [●]% of our outstanding common stock. As a result, Mr. Tan will be able to exercise significant influence over all matters that require us to obtain shareholder approval, including the election of directors to our board and approval of significant corporate transactions that we may consider, such as a merger or other sale of our company or its assets. This concentration of ownership in our shares by an executive officer will limit the other shareholders’ ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us.

Future sales of substantial amounts of the shares of common stock by existing shareholders could adversely affect the price of our common stock.

If our existing shareholders sell substantial amounts of the shares following this offering, the market price of our common stock could fall. Such sales by our existing shareholders might make it more difficult for us to issue new equity or equity-related securities in the future at a time and place we deem appropriate. The [●] shares of common stock offered in this offering will be eligible for immediate resale in the public market without restrictions. All remaining shares, which are currently held by our existing shareholders, may be sold in the public market in the future subject to the lock-up agreements and the restrictions contained in Rule 144 under the Securities Act. If any existing shareholders sell a substantial amount of shares, the prevailing market price for our shares could be adversely affected.

The market price of our shares is likely to be highly volatile and subject to wide fluctuations in response to factors such as:

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the shares

We do not anticipate paying cash dividends on our common stock in the foreseeable future.

We do not anticipate paying cash dividends in the foreseeable future. Presently, we intend to retain all of our earnings, if any, to finance development and expansion of our business. PRC capital and currency regulations may also limit our ability to pay dividends. Consequently, your only opportunity to achieve a positive return on your investment in us will be if the market price of our common stock appreciates.

We will have discretion in applying a portion of the net proceeds of this offering and may not use these proceeds in ways that will enhance the market value of our common stock.

Our management will have considerable discretion in the application of the proceeds received by us from this offering. Such proceeds may be used to expand our research and development team, acquire new technological hardware, and expand our sales and marketing team all over China and for working capital and general corporate purposes. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not improve our profitability or increase our common stock price. The net proceeds from this offering may also be placed in investments that do not produce income or that lose value.

Future issuances of capital stock may depress the trading price of our common stock.

Any issuance of shares of our common stock after this offering could dilute the interests of our existing stockholders and could substantially decrease the trading price of our common stock. We may issue additional shares of common stock in the future for a number of reasons, including to finance our operations and business strategy (including in connection with acquisitions, strategic collaborations or other transactions).

Sales of a substantial number of shares of our common stock in the public market could depress the market price of our common stock, and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock