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1、F-1 1 jzlf1.htm As filed with the Securities and Exchange Commission on July 31,2023.UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 JIZHILONG HOLDING GROUP LTD(Exact name of Registrant as specified in its charter)Unit
2、ed Kingdom 2833 Not Applicable(State or other jurisdiction of(Primary Standard Industrial(I.R.S.Employerincorporation or organization)Classification Code Number)Identification Number)Floor 1,Office 25 22 Market SquareLONDON,E14 6BUUnited KingdomTEL:+44 07706783950(Address,including zip code,and tele
3、phone number,including area code,of Registrants principal executive offices)Copies to:Approximate date of commencement of proposed sale to the public:As soon as practicable after the effective date ofthis Registration Statement.If any of the securities being registered on this Form are to be offered
4、 on a delayed or continuous basis pursuant toRule 415 under the Securities Act of 1933,check the following box.If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,please check the following box and list the Securities Act registrati
5、on statement number of the earlier effectiveregistration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the Securities Act,check the followingbox and list the Securities Act registration statement number of the earlier effective registra
6、tion statement for the sameoffering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the Securities Act,check the followingbox and list the Securities Act registration statement number of the earlier effective registration statement for the sameoffering.Indicate by check
7、 mark whether the registrant is an emerging growth company as defined in Rule 405 of theSecurities Act of 1933.Emerging growth company xIf an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate bycheck mark if the registrant has elected not to use the
8、extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 7(a)(2)(B)of the Securities Act.xThe Registrant hereby amends this registration statement on such date or dates as may be necessary to delay itseffective date until the Registr
9、ant shall file a further amendment which specifically states that this registrationstatement shall thereafter become effective in accordance with Section 8(a)of the Securities Act,as amended,or untilthe registration statement shall become effective on such date as the Securities and Exchange Commiss
10、ion,actingpursuant to said Section 8(a)may determine.PRELIMINARY PROSPECTUS ORDINARY SHARES We are offering ordinary shares.This is the initial public offering of ordinary shares of .The offeringprice of our ordinary shares in this offering is expected to be$6.50 per share.Prior to this offering,the
11、re has been nopublic market for our ordinary shares.We have applied to list our ordinary shares on the Nasdaq Capital Market under the symbol“JZL”.There is noassurance that such application will be approved,and if our application is not approved,this offering may not becompleted.Investing in our ord
12、inary shares involves a high degree of risk.Before buying any shares,you should carefullyread the discussion of material risks of investing in our ordinary shares in“Risk Factors”.We are an“emerging growth company”as defined under the federal securities laws and,as such,will be subject toreduced pub
13、lic company reporting requirements.See“Prospectus SummaryImplications of Being an EmergingGrowth Company”for additional information.Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapprovedof these securities or passed upon the accuracy or adequacy of t
14、his prospectus.Any representation to thecontrary is a criminal offense.We are a holding company incorporated in the United Kingdom as a holding company.The Ordinary Shares offered inthis prospectus are shares of the United Kingdom holding company.Holders of our Ordinary Shares will own sharesof a Un
15、ited Kingdom holding company.The UK regulatory authorities could disallow our corporate structure,whichwould likely result in a material change in our operations and/or a material change in the value of our OrdinaryShares,including that it could cause the value of our Ordinary Shares to significantl
16、y decline or become worthless.Unless otherwise stated,as used in this prospectus and in the context of describing our operations and consolidatedfinancial information,“we,”“us,”“Company,”or“our,”refers to JIZHILONG HOLDING GROUP LTD,a UnitedKingdom holding company.For a description of our corporate
17、structure,see“Corporate History and Structure.”Seealso“Risk Factors Risks Relating to Our Corporate Structure.”PER SHARE TOTAL Initial public offering price$Underwriting discounts and commissions(1)$Proceeds,before expenses,to us$(1)Does not include accountable and non-accountable expense allowance
18、payable to underwriters.Please see thesection of this prospectus entitled“Underwriting”for additional information regarding underwritercompensation.We expect our total cash expenses for this offering(including cash expenses payable to our underwriters for their out-of-pocket expenses)to be approxima
19、tely$,exclusive of the above commissions.In addition,we will payadditional items of value in connection with this offering that are viewed by the Financial Industry RegulatoryAuthority,or FINRA,as underwriting compensation.These payments will further reduce proceeds available to usbefore expenses.Se
20、e“Underwriting.”II Neither we nor any of the underwriters have authorized anyone to provide any information or to make anyrepresentations other than those contained in this prospectus or in any free writing prospectuses we have prepared.Neither we nor any of the underwriters take responsibility for,
21、and can provide no assurance as to the reliability of,any other information that others may give you.This prospectus is an offer to sell only the shares offered hereby,butonly under circumstances and in jurisdictions where it is lawful to do so.The information contained in this prospectusis current
22、only as of its date,regardless of the time of delivery of this prospectus or of any sale of our common stock.For investors outside the United States:Neither we nor any of the underwriters have done anything that would permitthis offering or possession or distribution of this prospectus in any jurisd
23、iction where action for that purpose isrequired,other than in the United States.Persons outside the United States who come into possession of thisprospectus must inform themselves about,and observe any restrictions relating to,the offering of the shares of ourcommon stock and the distribution of thi
24、s prospectus outside the United States.Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory bodyhas approved or disapproved of these securities or determined if this prospectus is truthful or complete.Anyrepresentation to the contrary is a crimi
25、nal offense.III TABLE OF CONTENTS PageAbout This ProspectusVINTERNATIONAL FINANCIAL REPORTING STANDARDSVIMARKET AND INDUSTRY DATAVITRADEMARKSVISPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSVIIPROSPECTUS SUMMARY1THE OFFERING12RISK FACTORS13INDUSTRY AND MARKET DATA33USE OF PROCEEDS34DIVIDEND POLICY
26、35CAPITALIZATION36CORPORATE HISTORY AND STRUCTURE37MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS38BUSINESS46MANAGEMENT64PRINCIPAL SHAREHOLDERS68DESCRIPTION OF SHARE CAPITAL69SHARES ELIGIBLE FOR FUTURE SALE74TAXATION76UNDERWRITING79WHERE YOU CAN FIND ADDITIONAL I
27、NFORMATION81 IV Table of Contents About This Prospectus This prospectus is part of a registration statement on Form F-1 that we filed with the Securities and ExchangeCommission(the“SEC”).As permitted by the rules and regulations of the SEC,the registration statement filed by usincludes additional in
28、formation not contained in this prospectus.You may read the registration statement and the otherreports we file with the SEC at the SECs website described below under the heading“Where You Can Find MoreInformation”.The information contained in this prospectus is accurate as of the date on the front
29、of this prospectus only,regardlessof the time of delivery of this prospectus or of any sale of our Common Shares.Our business,financial condition,results of operations and prospects may have changed since that date.This prospectus contains summaries of certain provisions contained in some of the doc
30、uments described herein,butreference is made to the actual documents for complete information.In this prospectus,unless the context otherwise requires:references to“Common Shares”or“our shares”refer to common shares of JIZHILONG HOLDING GROUPLTD;references to the“Company,”“we,”“us,”“our”and“JZL”refe
31、r to JIZHILONG HOLDING GROUP LTD;references to“dollars,”“U.S.dollars,”“USD,”“$,”and“US$”are to United States Dollars;“U.S.GAAP”refers to generally accepted accounting principles in the United States;references to the“SEC”are to the United States Securities and Exchange Commission.Market data and cer
32、tain industry data and forecasts used in,or incorporated by reference in,this prospectus wereobtained from sources we believe to be reliable,including market research databases,publicly available information,reports of governmental agencies and industry publications and surveys.We have relied on cer
33、tain data from third-party sources,including internal surveys,industry forecasts and market research,which we believe to be reliablebased on our managements knowledge of the industry.Forecasts are particularly likely to be inaccurate,especiallyover long periods of time.In addition,we do not necessar
34、ily know what assumptions regarding general economicgrowth were used in preparing the third-party forecasts we cite.Statements as to our market position are based on themost currently available data.While we are not aware of any misstatements regarding the industry data presented inthis prospectus,o
35、ur estimates involve risks and uncertainties and are subject to change based on various factors,including those discussed under the heading“Risk Factors”in this prospectus.Our historical results do not necessarilyindicate our expected results for any future periods.Certain figures included in this p
36、rospectus have been subject to rounding adjustments.Accordingly,figures shown astotals in certain tables may not be an arithmetic aggregation of the figures that precede them.We have obtained the statistical data,market data and other industry data and forecasts used in this prospectus and inour SEC
37、 filings incorporated herein by reference from publicly available information.We have not sought the consentof the sources to refer to the publicly available reports in this prospectus.V Table of Contents INTERNATIONAL FINANCIAL REPORTING STANDARDSOur financial statements are prepared in accordance
38、with the International Financial Reporting Standards as issued bythe International Accounting Standards Board.Our fiscal year ends on December 31 of each year as does ourreporting year.We have made rounding adjustments to some of the figures included in this prospectus.Accordingly,numericalfigures s
39、hown as totals in some tables may not be an arithmetic aggregation of the figures that precede them.MARKET AND INDUSTRY DATAThis prospectus contains references to industry market data and certain industry forecasts.Industry market data andindustry forecasts are obtained from publicly available infor
40、mation and industry publications.Industry publicationsgenerally state that the information contained therein has been obtained from sources believed to be reliable,but thatthe accuracy and completeness of that information is not guaranteed.Although we believe industry information to beaccurate,it is
41、 not independently verified by us.Some data is also based on our good faith estimates,which are derivedfrom our review of internal surveys or data,as well as the independent sources referenced above.Assumptions andestimates of our and our industrys future performance are necessarily subject to a hig
42、h degree of uncertainty and riskdue to a variety of factors,including those described in“Risk Factors.”These and other factors could cause futureperformance to differ materially from our assumptions and estimates.See“Cautionary Note Regarding Forward-Looking Statements.”TRADEMARKSWe own or have righ
43、ts to various trademarks,service marks and trade names that we use in connection with theoperation of our business.This prospectus also contains additional trademarks,trade names and service marksbelonging to other companies.Solely for convenience,trademarks,trade names and service marks referred to
44、 in thisprospectus may appear without the,or SM symbols,but such references are not intended to indicate,in any way,that we will not assert,to the fullest extent under applicable law,our rights or the right of the applicable licensor tothese trademarks,trade names and service marks.We do not intend
45、our use or display of other parties trademarks,trade names or service marks to imply,and such use or display should not be construed to imply,a relationship with,or endorsement or sponsorship of us by,these other parties.VI Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Various
46、statements contained in this prospectus,including those that express a belief,expectation or intention,as wellas those that are not statements of historical fact,are forward-looking statements.These forward-looking statementsmay include projections and estimates concerning our possible or assumed fu
47、ture results of operations,financialcondition,business strategies and plans,market opportunity,competitive position,industry environment,and potentialgrowth opportunities.In some cases,you can identify forward-looking statements by terms such as“may”,“might”,“will”,“should”,“believe”,“expect”,“could
48、”,“would”,“intend”,“plan”,“anticipate”,“estimate”,“continue”,“predict”,“project”,“potential”,“target,”“goal”or other words that convey the uncertainty of future events oroutcomes.You can also identify forward-looking statements by discussions of strategy,plans or intentions.We havebased these forwar
49、d-looking statements on our current expectations and assumptions about future events.While ourmanagement considers these expectations and assumptions to be reasonable,because forward-looking statementsrelate to matters that have not yet occurred,they are inherently subject to significant business,co
50、mpetitive,economic,regulatory and other risks,contingencies and uncertainties,most of which are difficult to predict and many of whichare beyond our control.These and other important factors,including,among others,those discussed in this prospectusunder the headings“Risk Factors”,“Managements Discus
51、sion and Analysis of Financial Condition and Results ofOperations”and“Business”,may cause our actual results,performance or achievements to differ materially from anyfuture results,performance or achievements expressed or implied by the forward-looking statements in thisprospectus,including among ot
52、her things:our future financial performance,including our expectations regarding our revenue,cost of revenue,operatingexpenses,including capital expenditures related to asset-intensive offerings,our ability to determine reserves andour ability to achieve and maintain future profitability;risks inher
53、ent in an MEDICINAL CHEMICALS&BOTANICAL PRODUCTS business;our ability to develop and market new products;the continued market acceptance of our products;exposure to product liability claims and actions;risks associated with product recalls;the sufficiency of our cash,cash equivalents and investments
54、 to meet our liquidity needs;our ability to manage operations-related risk;our expectations and management of future growth;our expectations concerning relationships with third parties;the impact of COVID-19 on the Company;our ability to maintain,protect and enhance our intellectual property;our abi
55、lity to successfully acquire and integrate companies and assets;the increased expenses associated with being a public company;exposure to product liability and defect claims;protection of our intellectual property rights;damage to our reputation due to negative publicity;changes in the laws that aff
56、ect our operations;inflation and fluctuations in foreign currency exchange rates;our ability to obtain all necessary government support;certifications,approvals,and/or licenses to conduct our business;continued development of a public trading market for our securities;the cost of complying with curr
57、ent and future governmental regulations and the impact of any changes in theregulations on our operations;risks related to our international operations in the United Kingdom,including the implications of the UnitedKingdoms recent withdrawal from the European Union;VII Table of Contents risks associa
58、ted with expansion into new jurisdictions;managing our growth effectively;fluctuations in operating results;emerging market risks;global economy risks;our ability to maintain and enhance our market position;our ability to obtain and maintain adequate insurance coverage;our ability to identify and in
59、tegrate strategic acquisitions,investments and partnerships and to manage ourgrowth;our ability to continue to develop new technologies and/or upgrade our existing technologies;dependence on our senior management and key employees;our ability to maintain the listing of our securities on Nasdaq;our a
60、bility to continue to develop new technologies and/or upgrade our existing technologies;andother factors set forth under“Risk Factors.”We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.You should not rely upon forward-looking stateme
61、nts as predictions of future events.We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about futureevents and trends that we believe may affect our business,financial condition,results of operations and prospects.Theoutcome
62、 of the events described in these forward-looking statements is subject to risks,uncertainties and otherfactors,including those described in the section titled“Risk Factors”and elsewhere in this prospectus.Moreover,weoperate in a very competitive and rapidly changing environment.New risks and uncert
63、ainties emerge from time totime and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-lookingstatements contained in this prospectus.We cannot assure you that the results,events and circumstances reflected inthe forward-looking statements will
64、be achieved or occur,and actual results,events or circumstances could differmaterially from those described in the forward-looking statements.These and other factors are more fully discussed in the“Risk Factors”,“Managements Discussion and Analysis ofFinancial Condition and Results of Operations”and
65、“Business”sections and elsewhere in this prospectus.These riskscould cause actual results to differ materially from those implied by the forward-looking statements contained in thisprospectus.All forward-looking statements included herein attributable to us or any person acting on our behalf are exp
66、resslyqualified in their entirety by the cautionary statements contained or referred to in this section.Any forward-lookingstatement that we make in this prospectus speaks only as of the date of this prospectus.Except as required byapplicable law,we do not undertake any obligation to update or revis
67、e,or to publicly announce any update or revisionto,any of the forward-looking statements in this prospectus,whether as a result of new information,future events orotherwise,after the date of this prospectus.VIII Table of Contents PROSPECTUS SUMMARY The following summary is qualified in its entirety
68、by,and should be read in conjunction with,the more detailedinformation and financial statements appearing elsewhere in this prospectus.In addition to this summary,we urge youto read the entire prospectus carefully,especially the risks of investing in our Ordinary Shares discussed under“RiskFactors”b
69、efore deciding whether to buy our Ordinary Shares.Our Mission JIZHILONG HOLDING GROUP LTD is a full-chain agricultural products company focusing on the development ofborneol(natural borneol).Our corporate mission is to develop the borneol industry and build the borneol brand.Borneol is a kind of pre
70、ciousChinese herbal medicine,with a variety of medicinal values and health care effects.We are committed to maximizingthe medicinal value of the borneol through scientific research and technological innovation,and to contribute topeoples health and happiness.First of all,we will devote to the develo
71、pment of the borneol industry.Borneol is a kind of plant growing in specificareas,and its growth environment and growth cycle have an important influence on its medicinal value.We willoptimize the growth environment of the borneol and improve its yield and quality through scientific planting andmana
72、gement technology.At the same time,we will also study the planting technology of borneol,and explore moreefficient planting methods to meet the market demand.Secondly,we will focus on the research and development of the borneol.Borneol has a variety of medicinal values,including anti-inflammatory,an
73、tibacterial,antioxidant and other effects.We will invest a lot of resources in scientificresearch,deeply explore the pharmacological effects and mechanisms of borneol,and find more application fields.Wewill cooperate with scientific research institutions and experts to jointly carry out the research
74、 and development of theborneol,so as to provide more healthy choices for people.At the same time,we will also pay attention to the innovation and promotion of borneol products.As a kind ofChinese herbal medicine,borneol is used in various forms,including medicinal materials,medicines,health careprod
75、ucts,etc.Through technological innovation and market research,we will develop more kinds of borneol productsto meet the needs of different consumers.We will pay attention to the quality and safety of products to ensure theefficacy and efficacy of borneol products.At the same time,we will also streng
76、then brand promotion and marketing toimprove the awareness and reputation of the brand.Finally,we will pay attention to corporate social responsibility.As an enterprise committed to the development of theborneol industry,we will actively participate in social welfare undertakings and give back to th
77、e society.We willfocus on the development of poor areas and help local farmers improve their planting techniques and income levels.We will also carry out a popular science campaign to improve the publics understanding of the borneol.We willactively participate in the environmental protection work,pr
78、otect the borneol growth environment,and promote thesustainable development.In short,our corporate mission is to develop the borneol industry and build the borneol brand.Through scientificresearch and technological innovation,we will optimize the growth environment of borneol,study thepharmacologica
79、l effect and mechanism of borneol,develop more kinds of borneol products,promote the brand ofborneol,and give back to the society.We will take peoples health and happiness as our own responsibility,and striveto achieve the sustainable development of the borneol industry.1 Table of Contents Overview
80、of Our Company JIZHILONG HOLDING GROUP LTD is a company that develops the whole industry chain of borneol.JIZHILONGHOLDING GROUP LTD,the seedling base cultivation,planting,raw material extraction,product research anddevelopment,deep processing,sales and brand construction comprehensive development.A
81、fter the epidemic,JIZHILONG HOLDING GROUP LTD began to focus on the construction and operation of investment center andheadquarters base,headquarters base plans to cover an area of more than 4,000 square meters,with exhibition hall,physical examination center,office area,Borneol College,warehousing
82、and logistics and other functions.Thecompany takes the research and development and marketing of borneol products as the breakthrough point,carries outthe global market sales layout of borneol,and plans to build thousands of borneol experience center chain worldwide.In the next three years of 2026,t
83、he company will provide healthy life management services for the health industry,provide healthy life management services for the whole people,and make contributions to the social and economicdevelopment and human health.The company adopts the management business model of government+company+base+coo
84、perative+farmers;based on the large-scale operation,the means of health and win-win cooperation as the values,with the wholeindustrial chain and modern production base of the seedling cultivation,breeding,cultivation,biological extraction,logistics,storage and transportation,a number of technical pr
85、oducts have filled the gaps in the industry.At present,the company has established a perfect self-inspection and self-control quality management system,and theproducts are exported to all over the world.At the same time,the companys well-known universities have establishedlong-term cooperation,and t
86、he world famous experts in the field have participated in the research and development ofa series of products such as borneol camphor biological extraction,and achieved a number of scientific researchachievements.The company makes every effort to build the capital of borneol,establishes a well-known
87、 borneolbrand,and strives to become a leading enterprise in the borneol characteristic health industry.The Industry(1)Industry analysisBorneol,also known as natural borneol,has high medicinal value and health function,is also one of the five incense,the first of the medicine.Natural borneol is extre
88、mely rare.The roots of the natural borosencephala tree native toSumatra,Indonesia,used to be the main source of borneol,but have been nearly exhausted due to long-termoverharvesting.As an emerging industry with great potential,the borneol industry is an industry specially designed tobring a healthy
89、life to human beings.Borneol industry is a kind of culture,is a kind of life,is a kind of health,but alsois a kind of sharing.Borneol on the human health function ten effects:one is soothing the heart and benefiting thebrain,the second is detoxification and beauty enhancement,three is awakening and
90、calming the mind,four is antivirus and anti infection,five is removing heat and nourishing the lungs,six is tonifying vital energy,seven is repelfoulness,eight is apoptotic cancer cells,nine is to solve the problem of skin,ten is facial features care.Major international medical powers have also carr
91、ied out a lot of modern pharmacological research on borneol,theAmerican medical research shows that borneol is a miracle of health care.The German Cancer Research Centerfrom the most basic molecular research to the clinical treatment of cancer,they developed the borneol anti-canceragent,for the prev
92、ention and treatment of cancer has a special curative effect.A health care environment researchinstitute in Japan found that the borneol contains anti-cancer substances.2 Table of Contents Experts agree that:in todays various chemical additives for the disaster of human health situation,the developm
93、ent ofthe borneol is the gift of god,the Gospel of human,borneol will be in the field of human health care from theunknown,to known,to know,will be in health,beauty,epidemic prevention and make new contributions to thetreatment of difficult diseases.With the acceleration of the aging of the society,
94、the health industry known as the silver economy is booming andknown as the sunrise industry.The health industry will be the largest economy in the future.(2)Industry dataThe largest right-turn borneol camphor planting base,Existing forest land of 18,648,000 square meter,0.0045 kg ofbornicles per squ
95、are meter,The annual output of borneol is 84,000 kg and the output value is 23543590.68 US dollars(280.28 US dollars/kg);Of 0.0045 kg of extracted essential oil per square meter,Annual output of essential oil is84,000 kg,Output value of US$23543590.68(US$280.28/kg);Source liquid extract of 0.3003 kg
96、 per square meter,annual output of source liquid is 5.6 million kg,Output value of US$313,910.14(US$56.06/ton);Planting cost:US$2525/ha(including management and transportation costs),Total revenue of per-square meter output value is US$1.052,18,648,000$X1.052=$19,617,696.There are huge business oppo
97、rtunities and fill up the blank market.(3)Industry pain points.At present,there are a large number of sub-health people,and no high-quality products can prevent and improvethem.According to incomplete statistics:dyslipidemia of 1600 people(including hyperlipidemia),hyperlipidemia ofmore than 100 mil
98、lion people,fatty liver about 120 million people,hypertension population 270 million,diabetesreached 92.4 million people,overweight or obesity 70 million-200 million people,on average every 10 seconds havea person with cancer,every 30 seconds a person with diabetes,on average,every 30 seconds,at lea
99、st one person diedof cardiovascular cerebrovascular disease;.The technical threshold is not high,easy to be copied.Most of the borneol products are synthetic technology,and the natural borneol is a scarce resource;.Themarket operation mode is old,with no breakthrough and innovation,and serious homog
100、enization.(4)Industry forecast(for the next three years)The market size of the 2030 health industry will exceed$2242215308725.02.With the acceleration of the agingsociety,the health industry known as the silver economy is booming and is known as the sunrise industry.In2023,the size of the silver eco
101、nomy is expected to reach$64.85,and will be the largest economy in thefuture.In the next three years,the natural borneol industry will occupy the dominant position in the raw materialsupply chain of the industry,and the demand for more and more high-quality and efficient natural borneol p
102、roductswill continue to surge.In the next three years,the borneol market will produce high-tech technology,and the scalewill exceed hundreds of billions.Our Products and Services JIZHILONG HOLDING GROUP LTD under the promotion of the environment,committed to the research of borneolproducts,and has a
103、 number of advanced technologies,dedicated to the development of a variety of borneol seriesproducts,roughly listed as follows:(1)Borneol incense series:used for incense incense,one from animals,such as musk;one from plants,flowers,fruits,stems,leaves,roots,such as borneol incense.In ancient times,t
104、he fumigation method was mainly burning incense andnatural distribution,so the spices used for fumigation were mostly solid,with very little liquid,or although there wasliquid in the extraction process,it was limited by the fumigation method,and finally imped in the incineration solidcarrier.The mod
105、ern incense smoked essential oil is divided into different unilateral varieties from its efficacy,such asawakening,calming,physiotherapy,insect repellent,etc.In professional physiotherapy,several single essential oilsmay be used into compound varieties according to the needs to achieve different phy
106、siotherapy effects.Therefore,inthe borneol incense developed by JIZHILONG HOLDING GROUP LTD,it not only retains the ancient productionprocess,but also has the incense essential oil with modern technology to meet the needs of different groups andoccasions,and JIZHILONG HOLDING GROUP LTD has a strong
107、aroma and little smoke.3 Table of Contents(2)Borneol fragrance box series:fragrance box is the predecessor of sachets,as the name suggests,is made of jade,metal and other materials specially used for serving rice fragrance small box.The literati pay attention to elegance andinterest.When reading and
108、 writing in the study,playing the piano,playing tea and playing chess,burning a furnace ofincense can not only add elegance and interest,but also purify the indoor air.Therefore,the series developed byJIZHILONG HOLDING GROUP LTD meets the needs of literati.(3)Borneol stock solution series:Borneol st
109、ock solution is also known as natural borneol,is the plant essence ofborneol camphor,is a precious natural spice and medicine,made from the fresh branches and leaves of the borneolcamphor tree,with many medicinal effects:.Apoptotic cancer cells(borneol can induce apoptosis of nasopharyngeal carcinom
110、a,lung cancer,thyroid cancer,breast cancer cells);.Comfortable benefit brain(Smell borneol can relieve chest tightness,angina pectoris,headache,Prevention ofAlzheimers disease);.detoxification and beauty(Smell Borneol straight into the heart and lung,Dispoison gas and turbid gas outside thebody,Bloo
111、d live pox hair,Meridian channels);.Awakening and calming the mind(Dual regulation of the central nervous system,Wake up and calm the mind);.Antivirus,anti-infection(borneol antiviral,anti-infection,Prevent respiratory diseases);.Slow down fever(Smell Borneol or apply it to Daui(neck),Pulmonary poin
112、t(both sides of the spine),Can reducethe fever);.Vitality(Smelling Borneol is greatly beneficial to vitality,Enhance human immunity);.Avoiding filth(borneol in the room,Can prevent and block the damage of the disease in the air on the humanbody);.Solve skin problems(borneol used for skin,Can relieve
113、 analgesia,relieve itching,swelling,stasis,acne,muscle,bacteriostasis);.Facial nursing(borneol solution nursing facial features,It can be used for dry eye disease,pinkeye,rhinitis,oralulcer,gingival swelling and pain,deafness,otitis media,etc.).(4)Borneol pillow:JIZHILONG HOLDING GROUP LTD through n
114、ew technology,the natural borneol is placedabove the pillow core,as long as people sleep through breathing,can let the borneol volatilize,to achieve the purposeof health.Because the borneol has the functions of removing disease,borneol awakening,mosquito repellent,mites,filth,antibacterial,anti-infl
115、ammatory,analgesic and so on,the borneol pillow is suitable for insomnia,chronicpharyngitis,rhinitis,diabetes complications,neck and shoulder pain,arteriosclerosis,poor resistance,easy to catch acold,like to drink and often drive people.(5)In the future,JIZHILONG HOLDING GROUP LTD will also combine
116、the different needs of consumer groups,and continue to research and innovate more series of products,so as to make borneol famous all over the world,sothat everyone can use borneol products.Our Solution(1)Main consumer groups of products or servicesWomen aged 25-35 are mainly loyal users of borneol
117、aromatherapy series products;consumers aged above 45 aremainly targeted at the sub-health conditions of middle-aged and elderly people.4 Table of Contents(2)The main reason for the products or services that consumers buy.Natural borneol series of products,to make up for the general quality and effec
118、t of similar products in the marketweakness.Most of the similar products in the international market are synthetic raw materials.Through the borneol series of products,we can improve the human sub-health condition at any time in most scenesand time periods.Employment demand-For college students entr
119、epreneurship and employment,the company recommends them tothe agents in the franchise area for cooperation and promotion,and win-win development.With the improvement of national living standards,the desire to improve their own health and physique.(3)The companys current position in the industry and
120、its target positionAt present,the company is in the global leading position in the base area of its own and joint cultivation.With18,648,000 square meter core area of the borneol planting base.It has formed an industrial layout of seedling basecultivation,planting,raw material extraction,product res
121、earch and development,deep processing,sales and brandconstruction,with nearly 20 single products of multi-series and multi-efficacy products.Borneol industry is anemerging development industry,industry brands are few and scattered,no oligarchic companies.At present,the scaleof the company is the fir
122、st in the industry,but it still needs to continue to innovate,introduce high-tech technology,and enhance its core competitiveness,in order to become a benchmark brand in the big health industry in the scale,brand awareness and product quality in the future.(4)channel of distribution.Regional agent(m
123、unicipal agent,district agent,etc.).Internal introduction of marketing system(company contacts,franchisees,partners,students,etc.).The company uses the new media network platform to promote it(Wechat,Youtube,Tiktok,etc.)(5)Promotion methodChain model in the international market;store partner model,j
124、oint consumer membership model.The company hasoperation investment center and headquarters base,headquarters base covers an area of more than 4,000 squaremeters,with exhibition hall,physical examination center,office area,Borneol College,warehousing and logistics andother functions.The company takes
125、 the extraction technology of exosomes as the high-tech product,integratesproduct research and development and market sales as the breakthrough point,carries out the sales layout of borneolmarket,and plans and builds thousands of borneol experience center chain stores through the marketing center.Th
126、e company will also take borneol natural borneol,essential oil,source liquid and deep processing of borneol healthseries products as the fist,the main line,the business thinking and industrial planning of thousands of stores chain,tobuild borneol capital city name card,create a well-known brand of b
127、orneol brand,and is committed to becoming theleading enterprise in the borneol industry.5 Table of Contents Our business model(1)Industrialization:forming an industrialization-scale supply chain raw material base,According to the current coreplantation area of 4,612.63 acres,In the next three years,
128、this,Will break through 8236.85 acres of planting area andthe formation of a thousand mu of seedling seedling base,To meet the surging market demand,Form the largest large-scale raw material base in China;In the big health industry chain ushered in a new transformation opportunity and anew era of in
129、novation and reform,As the impact of the epidemic fades and the policy side recovers,Big data andartificial intelligence technologies continue to deepen the empowerment of many big health industries,Combining aseries of breakthroughs in technology,digitalization and life science innovation,The poten
130、tial of the health industrywill be fully unleashed.(2)Branding:With the continuous improvement of peoples health needs,driven by the trend of yearning for health,the international health industry has entered the era of high-quality development,and the growing scale of the healthmarket,which will gen
131、erate many popular health brands favored by people.The company will give full play to theabsolute advantages of natural borneol raw materials and products,in the same industry,the use of the Nobel Prize-winning exosome extraction technology,the product quality to a new height,create more high-tech p
132、roducts,constantly build the brand,strengthen the brand power,maintain the sustainable development and corecompetitiveness advantage.(3)Internationalization:The health industry is undergoing profound changes.Only when every subject in theindustry needs to follow the development trend of the internat
133、ionalization of the industry and have the courage toinnovate can we seize the opportunities.The company will take advantage of the opportunity of raw material shortagein the natural borneol global market to expand international trade channels,consolidate the source position of high-quality global ra
134、w material supply chain,and continuously expand the market scale and market sales share.(4)Capitalization:From the perspective of investment and financing of the medical and health industry,the number ofglobal medical and health investment and financing events in 2022 has reached a record high,and t
135、he popularity ofcapital has increased compared with the same period.Biomedical tens of millions of dollars of financing leadingadvantage,digital health start-ups performance attention.The company will also use capital tools to start the listingprocess,use capital tools to accelerate the development
136、and take-off of the company,and form a leading enterprise inthe industrial chain.Our Competitive Strengths We believe that we have the following strengths that are the key to our past success and future development:Borneol-centric products and health sciences.Except for a few products,all of our pro
137、ducts contain borneolcomponents.With our extensive experience,we use borneol-centered nutrition science and traditional TCM theory asthe basis of our product formulation.Our products focus on the health benefits of borneol ingredients and arebalanced with other types of plants,minerals and herbs.Int
138、ernal production capacity.All of our borneol incense,borneol essential oil,borneol stock,borneol pillow(all ofwhich are our core products)are produced in the original base or specialized factory.Among the products producedby the company,the borneol stock solution series is recognized as the leader i
139、n the field of borneol products in thehighly competitive stock solution market with its advanced extraction technology and equipment,and our borneolproducts have won many awards and recognition.Effective distribution channels.We use multiple distribution methods to sell our products around the globe
140、.The vastmajority of our sales are done through independent dealers.We believe our distribution model is the most appropriateway to market and sell our products because it utilizes the resources and personal connections between our authorizedindependent distributors and their retail customers.This s
141、ales model helps to strengthen consumer education onproduct health benefits and gather feedback to improve our products.Due to the retail customer base of distributors,this is also an effective advertising channel for our products.6 Table of Contents Experienced management team.Our management team i
142、s led by Ms.Jing Li,the chairman.She has been engaged inenterprise management and operation for many years and has rich experience in business operation.She is good atplanting technology,scientific research and development,market strategic layout and capital operation.Mr.JianqunYi,one of our founder
143、s,has a long-term health consultant and company operation management career,and has richpractical experience in enterprise planning,operation and other fields.perennial serve in enterprise management,company operation,venture capital institutions,entity enterprises,etc.,and participate in many enter
144、prise healthconsulting,business contact,investment attraction,etc.In addition,other members of our senior management teamhave extensive experience in their areas of focus,including manufacturing,marketing and sales,operations,financialmanagement,and cross-border business development.Our Challenges J
145、IZHILONG HOLDING GROUP LTD as a company focusing on borneol products and services,it is an emergingtechnology company and has some weaknesses with the characteristics of the borneol industry,which may have anegative impact on the long-term development and competitiveness of the company.Here are some
146、 of the weaknessesthat we may face:(1)Limited market share:JIZHILONG HOLDING GROUP LTD is a relatively new company.Compared with somecompetitors that have established strong brand influence and market share,the companys market share has furtherincreased unprecedented.That could limit the companys sh
147、ort-term sales and revenue growth.(2)Lack of brand recognition:Since JIZHILONG HOLDING GROUP LTD is an emerging company,there isrelatively much room for improvement in its brand awareness.This means that consumers have a limitedunderstanding of the companys products and brands,and may affect their p
148、urchasing decisions about the companysproducts.Building a strong brand recognition in the market takes time and resources,which can be a challenge for anemerging company.(3)Limited product innovation ability:Although JIZHILONG HOLDING GROUP LTD is a company focusing onborneol products and services,t
149、he companys products also face a lack of unique functions and characteristics,andcannot be distinguished from competitors products.This may limit the competitiveness of companies in the marketand make it difficult to attract consumers attention and desire to buy.(4)Supply chain management challenges
150、:JIZHILONG HOLDING GROUP LTD will also face the challenges ofsupply chain management.JIZHILONG HOLDING GROUP LTDs products may need to be purchased fromdifferent suppliers,which may lead to instability in the supply chain and delayed delivery problems.This can affectthe companys ability to deliver p
151、roducts and negatively affect customer satisfaction.(5)Risks of relying on a specific market:JIZHILONG HOLDING GROUP LTD may rely on sales in a specificmarket.If a recession or other disadvantage occurs in the market,the companys sales and revenue could be severelyaffected.We will consider expanding
152、 our market share and reducing our dependence on specific markets to mitigatethis risk.(6)Lack of professional talents:JIZHILONG HOLDING GROUP LTD may face the problem of lack of professionaltalents.If we dont have enough technicians and marketers to support the companys business development,this ma
153、ylimit the companys ability to innovate and market competitiveness.(7)Financial pressure:JIZHILONG HOLDING GROUP LTD as an emerging company,it may face financialpressure.Companies may need to invest significant amounts of money to support product development,marketing,and sales activities.If the com
154、pany cannot obtain sufficient financial support,it may affect the normal operation anddevelopment of its business.In short,once JIZHILONG HOLDING GROUP LTD faces more weaknesses,it may have a negative impact on thelong-term development and competitiveness of the company.However,these weaknesses can
155、be overcome to someextent,by strengthening brand building,improving product innovation,improving supply chain management,strengthening sales and marketing strategies,recruiting professionals and finding financial support.7 Table of Contents We may face the following threats at the operational and de
156、velopment level:(1)Market competition:With the gradual increase of the research and application of the borneol,more enterprisesmay enter the borneol industry and increase the pressure of market competition.Other companies may develop similarproducts that provide more options to consumers,thus posing
157、 a threat to our market share.(2)Regulatory restrictions:The research and development and sales of herbal products are restricted by national andregional regulations.The Borneol industry company needs to comply with the relevant regulations and standards toensure the quality and safety of its produc
158、ts.If there are regulatory changes or new restrictive measures,they mayadversely affect our business operations and development.(3)Technological innovation:The continuous progress and innovation of science and technology may bring newchallenges to the borneol industry.New technologies may change the
159、 way the borneol is extracted and applied,making the traditional borneol products uncompetitive.We need to pay close attention to the trend of science andtechnology,adjust and update our technology and products in time.(4)Brand building:As a Chinese herbal medicine,Borneol has a relatively low brand
160、 awareness.We need tostrengthen brand building and promotion to improve consumers awareness and trust of borneol products.If we do notpay enough attention to brand building,we may be other competitors to seize market share.(5)Changes in market demand:consumers needs and preferences may change over t
161、ime.We need to pay closeattention to the changes in market demand,timely adjust product research and development and promotion strategiesto meet the needs of consumers.If we fail to adapt to the changes in market demand in time,it may lead to a declinein product sales.(6)Environmental protection:The
162、 growth environment of borneol is very important for yield and quality.With theaggravation of environmental pollution and damage,the growth environment of the borneol may be threatened.Weneed to strengthen the awareness of environmental protection,actively participate in environmental protection wor
163、k,to ensure the sustainable development of borneol.In short,in the process of business operation and development,we may face threats such as market competition,legalrestrictions,technological innovation,brand building,changes in market demand and environmental protection.Inorder to deal with these t
164、hreats,the borneol industry company needs to constantly improve its competitiveness,strengthen research and development and innovation ability,optimize product quality and safety,actively participatein marketing and brand building,pay attention to the changes in market demand,strengthen environmenta
165、l protection,so as to realize the sustainable development of the borneol industry.Our market opportunity In todays global situation,we have independent research and development of products and raw materials productionbase,so that we can obtain more development opportunities.First,globalization provi
166、des us with a broader market for borneol products and services.With the increase of globaltrade and the strengthening of international economic ties,we can sell our own products to more countries andregions.This means that we can expand our customer base and increase our sales.In addition,globalizat
167、ion alsoprovides us with more opportunities to cooperate with international partners,which is conducive to jointly developnew markets and products and achieve the purpose of win-win cooperation.8 Table of Contents Second,globalization provides us with more supply chain advantages.We have independent
168、 research anddevelopment products and raw materials production base,can better control the quality and cost of products.Byestablishing a global supply chain network,we can manage more effectively the procurement and production processof raw materials and ensure the timely delivery of products.In add
169、ition,we can take advantage of globalization tofind more competitive suppliers and partners to reduce costs and improve efficiency.Third,globalization provides us with more opportunities for innovation.We have the ability to develop our ownproducts,and can continue advanced technologies and ideas ar
170、ound the world,so as to launch new products andtechnologies.Globalization allows us to work together with experts and research institutions from different countriesand regions.Such transnational cooperation can not only accelerate the speed of innovation,but also bring us moreinnovative ideas and id
171、eas.Fourth,globalization provides us with more opportunities for international brands.By promoting and selling productsworldwide,we can build an international awareness and brand image.This will help us to gain more recognition andtrust in the international market and further expand our market share
172、.In addition,we can also take advantage of theopportunity of globalization to cooperate with our brands with other internationally renowned brands(such as Gucci,Hermes,etc.)to jointly launch co-brand products and further enhance the brand value.Fifth,globalization has provided us with more internati
173、onal talent opportunities.As the company expands in theinternational market,we need more talents with an international vision and cross-cultural communication skills.Globalization enables us to attract and retain excellent talents from different countries and regions,and provide stronghuman resource
174、s support for the development of the company.To sum up,we have independent research and development products and raw materials production base,facing manyinternational opportunities in todays global situation.By exploiting these opportunities,companies can achievesustained growth and development by
175、expanding their market,optimizing their supply chain,accelerating innovation,building international brands and attracting international talent.Our Strategy We plan to complete the investment expansion financing and acquisition in 2023.Enter JIZHILONG HOLDINGGROUP LTD industrial ecological platform t
176、o consolidate the raw material supply chain system of 18,648,000 squaremeter;use extraction technology to develop independent brand external body borneol products;agent brand productsin domestic market to expand sales and build chain organization,to open up the sales channel of natural borneol rawma
177、terial for international foreign trade.Start the nasdaq listing process,acquire planting bases and other upstream anddownstream industrial bases.It plans to complete the bell trading in 2024.Complete the protection of international patent intellectual propertyrights of independent brands;expand the
178、domestic market sales of independent brand products;improve the onlineand offline chain institutions of JIZHILONG HOLDING GROUP LTD;finance and acquire the upstream anddownstream enterprises of industrial chain planting base,and form the core value system of profit.Help otherenterprises to create cu
179、stomized enterprise independent brand products;NASDAQ listing bell.9 Table of Contents It plans to complete the brand layout and enter the international market in 2025.Borneol private brand products enterthe international market;financing,merger and acquisition,help more other enterprise brands to e
180、nter theinternational trade market;form the largest digital Borneol product agent retail platform.Implications of Our Being an“Emerging Growth Company”On September 9,2022,the SEC adopted inflation adjustments mandated by the Jumpstart Our Business Startups Actof 2012(the“JOBS Act”).As a result,an“em
181、erging growth company”will lose its emerging growth company statuson the last day of the fiscal year in which it has$1.235 billion or more in total.As a company with less than$1.235billion in revenue during our last fiscal year,we qualify as an“emerging growth company”as defined in the JOBSAct.“An“e
182、merging growth company”may take advantage of reduced reporting requirements that are otherwiseapplicable to larger public companies.In particular,as an emerging growth company,we:may present only two years of audited financial statements and only two years of related ManagementsDiscussion and Analys
183、is of Financial Condition and Results of Operations;are not required to provide a detailed narrative disclosure discussing our compensation principles;objectives and elements and analyzing how those elements fit with our principles and objectives,which iscommonly referred to as“compensation discussi
184、on and analysis”;are not required to obtain an attestation and report from our auditors on our managements assessment of ourinternal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;are not required to obtain a non-binding advisory vote from our shareholders on executive c
185、ompensation orgolden parachute arrangements(commonly referred to as the“say-on-pay,”“say-on frequency”and“say-on-golden-parachute”votes);are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph andCEO pay ratio disclosure;are eligible to claim longer
186、 phase-in periods for the adoption of new or revised financial accounting standardsunder 107 of the JOBS Act;and will not be required to conduct an evaluation of our internal control over financial reporting until our secondannual report on Form 20-F following the effectiveness of our initial public
187、 offering.We intend to take advantage of all of these reduced reporting requirements and exemptions,including the longerphase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBS Act.Ourelection to use the phase-in periods may make it difficult to compar
188、e our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under107 of the JOBS Act.Under the JOBS Act,we may take advantage of the above-described reduced reporting requirements and exemptionsuntil we no longe
189、r meet the definition of an emerging growth company.The JOBS Act provides that we would ceaseto be an“emerging growth company”at the end of the fiscal year in which the fifth anniversary of our initial sale ofcommon equity pursuant to a registration statement declared effective under the Securities
190、Act of 1933,as amended(the“Securities Act”)occurred,if we have more than$1.235 billion in annual revenue,have more than$700 millionin market value of our Class A Ordinary Share held by non-affiliates,or issue more than$1 billion in principal amountof non-convertible debt over a three-year period.10
191、Table of Contents Foreign Private Issuer Status We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934,asamended(the“Exchange Act”).As such,we are exempt from certain provisions applicable to United States domesticpublic companies.For example:We are
192、 not required to provide as many Exchange Act reports,or as frequently,as a domestic public company;For interim reporting,we are permitted to comply solely with our home country requirements,which are lessrigorous than the rules that apply to domestic public companies;We are not required to provide
193、the same level of disclosure on certain issues,such as executive compensation;We are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosuresof material information;We are not required to comply with the sections of the Exchange Act regulating the solicit
194、ation of proxies,consents,or authorizations in respect of a security registered under the Exchange Act;and We are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports oftheir share ownership and trading activities and establishing insider liability for
195、 profits realized from any“short-swing”trading transaction.Implications of Being a Controlled Company Controlled companies are exempt from the majority of independent director requirements.Controlled companies aresubject to an exemption from Nasdaq standards requiring that the board of a listed comp
196、any consist of a majority ofindependent directors within one year of the listing date.Public Companies that qualify as a“Controlled Company”with securities listed on the Nasdaq Stock Market(Nasdaq),must comply with the exchanges continued listing standards to maintain their listings.Nasdaq has adopt
197、edqualitative listing standards.Companies that do not comply with these corporate governance requirements may losetheir listing status.Under the Nasdaq rules,a“controlled company”is a company with more than 50%of its votingpower held by a single person,entity or group.Under Nasdaq rules,a controlled
198、 company is exempt from certaincorporate governance requirements including:The requirement that a majority of the board of directors consist of independent directors;The requirement that a listed company have a nominating and governance committee that is composed entirely ofindependent directors wit
199、h a written charter addressing the committees purpose and responsibilities;The requirement that a listed company have a compensation committee that is composed entirely of independentdirectors with a written charter addressing the committees purpose and responsibilities;and The requirement for an an
200、nual performance evaluation of the nominating and governance committee andcompensation committee.Controlled companies must still comply with the exchanges other corporate governance standards.These includehaving an audit committee and the special meetings of independent or non-management directors.O
201、ur Pre-IPOPrior to the IPO,we total share capital was about 200,000,000 ordinary shares.This time,about 50,000,000 ordinaryshares were offered,which is we expect that the initial public offering price will be no less than US$6.50 per share.Our Corporate Information Our registered office in the Engla
202、nd is located at the offices of FLOOR 1 OFFICE 25,22 MARKET SQUARE,LONDON,UNITED KINGDOM E14 6BU.11 Table of Contents THE OFFERING IssuerJIZHILONG HOLDING GROUP LTD Securities Being Offered Ordinary Shares,par value US$0.0001 per share Offering PriceWe expect that the initial public offering price w
203、ill be US$6.50 per OrdinaryShare.Ordinary Shares OutstandingImmediately Before This Offering Ordinary Shares Ordinary Shares OutstandingImmediately After This Offering Ordinary Shares(or Ordinary Shares if the underwritersexercise their option to purchase additional Ordinary Shares in full).Voting R
204、ightsEach Ordinary Share is entitled to one vote.Use of Proceeds.Product Development.Build upstream and downstream ecological chain.Decoration of physical store storefronts.Online and offline media promotion.Talent Team Building.Build directly operated stores.Market Expansion.Business Negotiation Pr
205、oposed Nasdaq Trading Symboland ListingWe plan to apply to list our Ordinary Shares on the Nasdaq Capital Marketunder the symbol“JZL”This offering is contingent upon us listing ourOrdinary Shares on Nasdaq Capital Market or another national exchange.No assurance can be given that such listing will b
206、e approved or that a liquidtrading market will develop for our Ordinary Shares.Lock-upOur directors,executive officers,and shareholder who own 5%or more ofthe outstanding Ordinary Shares intended agreed with the underwriters notto offer for sale,issue,sell,contract to sell,pledge or otherwise dispos
207、e ofany of our Ordinary Shares or securities convertible into Ordinary Sharesfor a period of 6 months commencing on the date of this prospectus.TheCompany is also prohibited from conducting offerings during this periodand from re-pricing or changing the terms of existing options and warrants.See“Und
208、erwriting”for additional information.Risk factorsSee“Risk Factors”for a discussion of risks you should carefully considerbefore investing in our Ordinary Shares.Transfer Agent Payment and settlement 12 Table of Contents RISK FACTORS An investment in our Ordinary Shares involves a high degree of risk
209、.Before deciding whether to invest in ourOrdinary Shares,you should consider carefully the risks described below,together with all of the other informationset forth in this prospectus,including the section titled“Managements Discussion and Analysis of FinancialCondition and Results of Operations”and
210、 our consolidated financial statements and related notes.If any of these risksactually occurs,our business,financial condition,results of operations or cash flow could be materially and adverselyaffected,which could cause the trading price of our Ordinary Shares to decline,resulting in a loss of all
211、 or part of yourinvestment.The risks described below and in the documents referenced above are not the only ones that we face.Additional risks not presently known to us or that we currently deem immaterial may also affect our business.Youshould only consider investing in our Ordinary Shares if you c
212、an bear the risk of loss of your entire investment.Risks Related to Our Business We have grown rapidly in recent years and have limited experience operating at our current scale ofoperations.If we are unable to manage our growth effectively,our brand,company culture and financialresults may suffer.W
213、e have grown rapidly in the past year and our recent growth rates and financial results should not be consideredindicators of our future performance.In order to effectively manage and leverage our growth,we must continue toexpand our sales and marketing,focus on innovative product and website develo
214、pment,and upgrade our managementinformation systems.Our continued growth has in the past and may in the future strain our existing resources and wemay experience ongoing operational difficulties in managing our operations in numerous jurisdictions,includingdifficulties in recruiting,training and man
215、aging a dispersed and growing employee base.Failure to expand andmaintain our company culture through growth may harm our future success,including our ability to retain and recruitpersonnel and to effectively focus on and pursue our corporate goals.MEDICINAL CHEMICALS&BOTANICAL PRODUCTS is evolving
216、rapidly and may not evolve as we expect.Even if our net sales continue to grow,our net sales growth rate may decline in the future due to a variety of factors,including macroeconomic factors,changes in supply and supply chain,changes in consumer preferences,increasedcompetition and the maturation of
217、 our business.Accordingly,you should not rely on our net sales growth rates for anyprior period as an indicator of our future performance.Our overall growth in net sales will depend on many factors,including our ability to:1)price our products and services effectively so that we can attract new cust
218、omers and expand our relationships withexisting customers.2)accurately forecast our net sales and plan our operating expenses.3)compete successfully with other companies that are or may be entering our competitive market in the future andrespond to developments in those competitors,such as pricing c
219、hanges and the introduction of new products andservices.4)Complying with existing and new laws and regulations that apply to our business.5)Successfully expanding into existing markets and entering new markets,including new geographic areas andcategories.6)The successful introduction of new products
220、 and enhancements to our products and services and their features,including in response to new trends or competitive dynamics or customer needs or preferences.7)Successfully identifying and acquiring or investing in businesses,products or technologies that we believe willcomplement or expand our bus
221、iness.8)Avoiding disruptions or interruptions in the distribution of our products and services.9)Providing quality support to our customers that meets their needs.10)Hiring,integrating and retaining talented sales,customer service and other personnel.11)Effectively managing the growth of our busines
222、s,personnel and operations,including the opening of newshowrooms.12)Effectively managing the costs associated with our business and operations.13)Maintaining and enhancing our reputation and brand value.13 Table of Contents Because of our limited history of operating our business at our current scal
223、e,it is difficult to assess our currentoperations and future prospects,including our ability to plan for and model future growth.Our limited operatingexperience at this scale,combined with the rapidly evolving nature of the markets in which we sell our products andservices,the significant uncertaint
224、y about how these markets will develop and other economic factors beyond ourcontrol,reduces our ability to accurately forecast quarterly or annual revenues.Failure to effectively manage ourfuture growth could adversely affect our business,financial condition and results of operations.We have limited
225、 sources of working capital and will need substantial additional financing.The working capital required to implement our business strategy and R&D efforts will most likely be provided byfunds obtained through offerings of our equity,debt,debt-linked securities,and/or equity-linked securities,andreve
226、nues generated by us.No assurance can be given that we will have revenues sufficient to sustain our operations orthat we would be able to obtain equity/debt financing in the current economic environment.If we do not havesufficient working capital and are unable to generate sufficient revenues or rai
227、se additional funds,we may delay thecompletion of or significantly reduce the scope of our current business plan;delay some of our development andclinical or marketing efforts;postpone the hiring of new personnel;or,under certain dire financial circumstances,substantially curtail or cease our operat
228、ions.We may need to engage in capital-raising transactions in the near future.Such financing transactions may well causesubstantial dilution to our shareholders and could involve the issuance of securities with rights senior to theoutstanding shares.Our ability to complete additional financings is d
229、ependent on,among other things,the state of thecapital markets at the time of any proposed offering,market reception of the Company and the likelihood of thesuccess of its business model and offering terms.There is no assurance that we will be able to obtain any suchadditional capital through asset
230、sales,equity or debt financing,or any combination thereof,on satisfactory terms or atall.Additionally,no assurance can be given that any such financing,if obtained,will be adequate to meet our capitalneeds and to support our operations.If we do not obtain adequate capital on a timely basis and on sa
231、tisfactory terms,our revenues and operations and the value of our Ordinary Shares and Ordinary Share equivalents would be materiallynegatively impacted and we may cease our operations.We are dependent on certain key personnel and loss of these key personnel could have a material adverse effecton our
232、 business,financial condition and results of operations.Our success is,to a certain extent,attributable to the management,sales and marketing,and research and developmentexpertise of key personnel.We are dependent upon the services of Ms.Jing Li,our Chairman of the Board,for thecontinued growth and
233、operation of our Company,due to his industry experience,technical expertise,as well as hispersonal and business contacts.Additionally,Mr.Xiangyou Yang,performs key functions in the operation of ourbusiness.We may not be able to retain Mr.Zunsong Tang and Mr.Tao Wang for any given period of time.Alth
234、oughwe have no reason to believe that Mr.Jianqun Yi will discontinue his services with us,the interruption or loss of hisservices would adversely affect our ability to effectively run our business and pursue our business strategy as well asour results of operations.We do not carry key man life insur
235、ance for any of our key personnel,nor do we foreseepurchasing such insurance to protect against the loss of key personnel.We may not be able to prevent others from unauthorized use of our intellectual property,which could harmour business and competitive position.We rely on a wide portfolio of intel
236、lectual property to operate our businesses and we may not be able to effectivelyprotect these intellectual property and proprietary rights against infringement,misappropriation or other violation,orefforts to safeguard our intellectual property may be costly.14 Table of Contents We rely on a combina
237、tion of trademark,copyright and trade secret protection laws in the U.S.,the England and otherjurisdictions,as well as confidentiality procedures and contractual provisions,to protect our intellectual propertyrights.We enter into confidentiality agreements with our employees and any third parties wh
238、o may access ourproprietary information,and we rigorously control access to our technology and information.However,we cannotguarantee that we have entered into confidentiality agreements with each party that may have or have had access toour trade secrets or proprietary information.Such agreements m
239、ay be breached by counterparties,who may discloseour proprietary information,including our trade secrets,or claim ownership in intellectual property that we believe isowned by us,and there may not be adequate remedies available to us for any such breach.In addition,we do not enterinto intellectual p
240、roperty assignment agreements in the ordinary course and rely on the intellectual property rights weobtain from our employees by operation of law.The intellectual property rights we obtain by operation of law may notextend to all intellectual property rights developed by our employees and contractor
241、s and individuals not subject toinvention assignment agreements may make adverse ownership claims to our current and future intellectual propertyrights.We therefore may not possess ownership rights in all intellectual property rights that we regard as our own orthat are necessary for the conduct of
242、our business.Intellectual property protection may not be sufficient in the regions in which we operate.Our trademarks or otherintellectual property rights may be challenged by others through administrative process or litigation,and our pendingtrademark applications may not be allowed.In addition,pol
243、icing any unauthorized use of our intellectual property isdifficult,time-consuming and costly,and the steps we have taken may be inadequate to prevent the misappropriationof our intellectual property.In the event that we resort to litigation to enforce our intellectual property rights,suchlitigation
244、 could result in substantial costs and a diversion of our managerial and financial resources.We can provideno assurance that we will prevail in such litigation and some courts in the U.S.and certain foreign jurisdictions areless willing or unwilling to protect trade secrets.Furthermore,it is often d
245、ifficult to maintain and enforce intellectualproperty rights in the England.Statutory laws and regulations in the England are subject to judicial interpretation andenforcement and may not be applied consistently due to the lack of clear guidance on statutory interpretation.Confidentiality and non-co
246、mpete agreements may be breached by counterparties,and there may not be adequateremedies available to us for any such breach.Accordingly,we may not be able to effectively protect our intellectualproperty rights or the intellectual properties licensed from third parties,or to enforce our contractual
247、rights in theEngland and other jurisdictions we operate.In addition,our trade secrets may be leaked or otherwise become available to,or be independently discovered by,ourcompetitors.If any of our trade secrets were to be lawfully obtained or independently developed by a competitor orother third part
248、ies,we would have no right to prevent them from using that technology or information to compete withus.Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on ourbusiness,financial condition and results of operations.We may not be able to prote
249、ct and enforce our trademarks and trade names,or build name recognition in ourmarkets of interest thereby harming our competitive position.The registered or unregistered trademarks or trade names that we own may be challenged,infringed,circumvented,declared generic,lapsed or determined to be infring
250、ing on or dilutive of other marks.We may not be able to protectour rights in these trademarks and trade names,which we need in order to build name recognition.In addition,thirdparties have filed,and may in the future file,for registration of trademarks similar or identical to our trademarks,thereby
251、impeding our ability to build brand identity and possibly leading to market confusion.If they succeed inregistering or developing common law rights in such trademarks,and if we are not successful in challenging suchrights,we may not be able to use these trademarks to develop brand recognition of our
252、 technologies,products orservices.In addition,there could be potential trade name or trademark infringement claims brought by owners ofother registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks ortrade names.Further,we may in the future enter i
253、nto agreements with owners of such third-party trade names ortrademarks to avoid potential trademark litigation which may limit our ability to use our trade names or trademarks incertain fields of business.15 Table of Contents If we fail to maintain an effective quality control system,our business c
254、ould be materially and adverselyaffected.We place great emphasis on product quality and adhere to stringent quality control measures and have obtainedquality control certifications for our products.To meet our customers requirements and expectations for the qualityand safety of our products,we have
255、adopted a stringent quality control system to ensure that every step of theproduction process is strictly monitored and managed.Failure to maintain an effective quality control system or toobtain or renew our quality standards certifications may result in a decrease in demand for our products orcanc
256、ellation or loss of purchase orders from our customers.Moreover,our reputation could be impaired.As a result,our business and results of operations could be materially and adversely affected.We are subject to risks related to product recalls,and our operation results and financial condition wouldsuf
257、fer if we fail to adequately manage such risks.We have implemented measures in our manufacturing process that are designed to prevent and detect defects andcontaminants in our products.Such measures,however,may not prevent,reveal or detect defects or contaminants inour products,and such defects may
258、not become apparent until after our products have been sold into the market.Consequently,there is a risk that product defects may occur and such defects or contaminants will require a productrecall.Any product recalls and related remedial actions can be costly to our operations and could have a mate
259、rialadverse effect on our business,results of operations and financial condition.Additionally,our third-party suppliersmay be reluctant to implement these stringent measures or may refuse to manufacture our products.These additionalmeasures may strain our relationships with those suppliers or may in
260、crease our cost of goods sold.Furthermore,product recalls could result in negative publicity and public concerns regarding the safety of our products,whichcould harm the reputation of our products and our business and could cause the market value of our Common Sharesto decline.Because we cannot exer
261、t the same level of influence or control over our independent distributors as we couldwere they our own employees,our distributors could fail to comply with our distributor policies andprocedures,which could result in claims against us that could harm our financial condition and operatingresults.Our
262、 distributors are independent and,accordingly,we are not in a position to directly provide the same direction,motivation and oversight as we would if distributors were our own employees.As a result,there can be no assurancethat our distributors will participate in our marketing strategies or plans,a
263、ccept our introduction of new products,orcomply with our distributor policies and procedures.Extensive national and local laws regulate our business and products.Although we have implemented distributorpolicies and procedures designed to govern distributor conduct and to protect the goodwill associa
264、ted with ourtrademarks and tradenames,it can be difficult to enforce these policies and procedures because of the large number ofdistributors and their independent status.Violations by our independent licensed distributors of applicable law or ofour policies and procedures in dealing with customers
265、could reflect negatively on our products and operations andharm our business reputation.16 Table of Contents Because of our dependence on consumer perceptions,adverse publicity associated with harmful effectsresulting from the consumption of our productions,or any similar products distributed by oth
266、er companies,could have a material adverse effect on us.We are highly dependent upon consumer perception of the safety and quality of our products and the ingredients theycontain,as well as that of similar products distributed by other companies.Consumer perception of products and theingredients the
267、y contain can be significantly influenced by scientific research or findings,national media attention andother publicity about product use.A product may be received favorably,resulting in high sales associated with thatproduct that may not be sustainable as consumer preferences change.Future scienti
268、fic research or publicity could beunfavorable to our industry or any of our particular products or the ingredients they contain and may not be consistentwith earlier favorable research or publicity.A future research report or publicity that is perceived by our consumers asless favorable or that ques
269、tions earlier research or publicity could have a material adverse effect on our ability togenerate revenues.As such,period-to-period comparisons of our results should not be relied upon as a measure of ourfuture performance.Adverse publicity in the form of published scientific research or otherwise,
270、whether or notaccurate,that associates consumption of our products or the ingredients they contain or any other similar productsdistributed by other companies with illness or other adverse effects,that questions the benefits of our or similarproducts,or that claims that such products are ineffective
271、 could have a material adverse effect on our reputation,thedemand for our products,our ability to generate revenues and the market price of our Common Shares.Our failure to appropriately respond to changing consumer preferences and demand for new products couldsignificantly harm our customer relatio
272、nships and product sales.Our business is particularly subject to changing consumer trends and preferences.Our continued success depends inpart on our ability to anticipate and respond to these changes,and we may not be able to respond in a timely orcommercially appropriate manner to these changes.If
273、 we are unable to do so,our customer relationships and productsales could be harmed significantly.Furthermore,the nutritional supplements industry in particular is characterized by rapid and frequent changes indemand for products and new product introductions.Our failure to accurately predict these
274、trends could negativelyimpact consumer opinion with respect to the products we distribute.This could harm our customer relationships andcause losses to our market share.The success of our new product offerings depends upon a number of factors,including our ability to:accurately anticipate customer n
275、eeds;innovate and develop new products;successfullycommercialize new products in a timely manner;price our products competitively;manufacture and deliver ourproducts in sufficient volumes and in a timely manner;and differentiate our product offerings from those of ourcompetitors.If we do not introdu
276、ce new products or make enhancements to meet the changing needs of our customers in a timelymanner,some of our products could become obsolete,which could have a material adverse effect on our revenues andoperating results.Any lack of requisite approvals,licenses or permits applicable to our business
277、 operations may harm ourbusiness.We may not be able to obtain all the licenses and approvals that may be deemed necessary to operate our business.Because we operate in multiple jurisdictions,the relevant laws and regulations,as well as their interpretations,couldbe different from the U.S.This can ma
278、ke it difficult to know which licenses and approvals are necessary,or theprocesses for obtaining them.For these same reasons,we also cannot be certain that we will be able to maintain thelicenses and approvals that we have previously obtained,or that once they expire we will be able to renew them.We
279、cannot be sure that our interpretations of the rules and their exemptions have always been or will be consistent withthose of the local regulators.As we expand our businesses,we may be required to obtain new licenses and will be subject to additional laws andregulations in the markets we plan to ope
280、rate in.If we fail to obtain,maintain or renew any required licenses orapprovals or make any necessary filings or are found to require licenses or approvals that we believed were notnecessary or we were exempted from obtaining,we may be subject to various penalties,such as confiscation of therevenue
281、s or assets that were generated through the unlicensed business activities,imposition of fines,suspension orcancelation of the applicable license,written reprimands,termination of third-party arrangements,criminalprosecution and the discontinuation or restriction of our operations.Any such penalties
282、 may disrupt our businessoperations and materially and adversely affect our business,financial condition and results of operations.17 Table of Contents We may experience significant fluctuations in our results of operations and growth rate.We have grown significantly in recent years,and we intend to
283、 continue to expand the scope and geographic reach ofthe services we provide.Our anticipated future growth will likely place significant demands on our management andoperations.Our success in managing our growth will depend,to a significant degree,on the ability of our executiveofficers and other me
284、mbers of senior management to operate effectively and on our ability to further improve anddevelop our financial and management information systems,controls and procedures.In addition,we expect to haveto adapt our existing systems and introduce new systems,train and manage our employees and improve
285、and expandour sales and marketing capabilities.Revenue growth may slow down or decline for any number of reasons,including our inability to attract and retainsellers and buyers,decreased buyer spending,increased competition,slowing overall growth of the borneol market,the emergence of alternative bu
286、siness models,changes in government policies and general economic conditions.Wemay also lose buyers and sellers for other reasons,such as a failure to deliver satisfactory customer or transactionexperience or high-quality services.If we are unable to properly and prudently manage our operations as t
287、heycontinue to grow,or if the quality of our services deteriorates due to mismanagement,our brand name and reputationcould be significantly harmed,and our business,prospects,financial condition and results of operations could bematerially and adversely affected.Our results of operations may fluctuat
288、e significantly as a result of a variety of factors,including those describedabove.As a result,historical period-to-period comparisons of our results of operations are not necessarily indicativeof future period-to-period results.You should not rely on the results of a single fiscal quarter as an ind
289、ication of ourannual results or our future performance.If we fail to effectively promote our business and attract new and retain current buyers and sellers,ourbusiness,results of operations and prospects may be materially and adversely affected.We believe that the effective promotion of our business
290、 is of significant importance to our success.Enhancing ourbrand recognition in the medicinal chemicals&botanical products market is critical to increasing the quantity anddepth of engagement of sellers and buyers with our platform,which,in turn,enhances the appeal and assortment ofproducts and servi
291、ces to buyers.We have conducted and will continue to conduct various marketing and promotionalactivities,including through both digital channels and offline media,aimed at increasing the visibility of our business,the attractiveness of our platform for our sellers and buyers and the growth of buyer
292、traffic on our websites andmobile apps.We cannot assure you,however,that these activities will be effective in achieving the intendedpromotional impact on our business.In addition,our buyers and sellers may have conflicting views regarding some ofthe new initiatives we introduce to improve our platf
293、orm,which can diminish our attempts to maintain a positivenetwork effect and negatively affect our buyer and seller base.Further,any negative publicity relating to our productsor services,regardless of its veracity,could harm our reputation and cause buyers and sellers to leave our platform,which wo
294、uld have a material adverse effect on our business,financial condition and results of operations.If ourmarketing efforts are not successful in attracting new and retaining current buyers,our business,prospects,financialcondition and results of operations could be materially and adversely affected.18
295、 Table of Contents We are subject to risks related to online transactions and payment methods.We accept payments using a variety of methods,including credit card,debit card,PayPal,credit accounts(includingpromotional financing)and customer invoicing.As we offer new payment options to our customers,w
296、e may besubject to additional regulations,compliance requirements and fraud.For certain payment methods,including creditand debit cards,we pay interchange and other fees,which may increase over time and raise our operating costs andlower profitability.We are also subject to payment card association
297、operating rules and certification requirements,including the Payment Card Industry Data Security Standard and rules governing electronic funds transfers,whichcould change or be reinterpreted to make it difficult or impossible for us to comply.As our business changes,we mayalso be subject to differen
298、t rules under existing standards,which may require new assessments that involve costsabove what we currently pay for compliance.If we fail to comply with the rules or requirements of any provider of apayment method we accept,if the volume of fraud in our transactions limits or terminates our rights
299、to use paymentmethods we currently accept,or if a data breach occurs relating to our payment systems,we may,among other things,be subject to fines or higher transaction fees and may lose,or face restrictions placed upon,our ability to accept creditcard and debit card payments from customers or to fa
300、cilitate other types of online payments.If any of these eventswere to occur,our business,financial condition and operating results could be materially adversely affected.We may suffer losses as a result of orders placed with fraudulent credit card data even if the associated financialinstitution app
301、roved payment of the orders.Under current credit card practices,we may be liable for fraudulent creditcard transactions.We may also suffer losses from other online transaction fraud,including fraudulent returns.If weare unable to detect or control credit card or transaction fraud,our liability for t
302、hese transactions could harm ourbusiness,financial condition and operating results.If we fail to maintain and enhance our brand,our business,prospects and results of operations may bematerially and adversely affected.We believe that maintaining and enhancing our brand is significantly important to t
303、he success of our business.A well-recognized brand is critical to increasing the number of buyers and sellers and the level of their engagement and,inturn,enhancing the attractiveness of our products and services to them.Despite conducting a number of brandpromotion and recognition activities from t
304、ime to time,we cannot assure you that these activities will be successful inthe future or that we will be able to achieve the brand promotion effects that we expect.In addition,our competitorsmay increase the intensity of their marketing campaigns,which may force us to increase our advertising spend
305、 tomaintain our brand awareness.If our brand is harmed or we are forced to increase our marketing expenses,ourbusiness,prospects,financial condition and results of operations could be materially and adversely affected.We operate in a competitive market.If we fail to retain our current market positio
306、n,our business and results ofoperations could be materially and adversely affected.The markets for our products and services are competitive and rapidly evolving.The successful execution of ourstrategy depends on our ability to continuously attract and retain sellers and buyers,expand the market for
307、 ourproducts and services,continue technological innovation and offer new capabilities to sellers and buyers.We havemany competitors not only among other medicinal chemicals&botanical products companies,but also physicalstores and a large and fragmented group of other offline retailers.We compete wi
308、th these current and potentialcompetitors for both sellers and buyers.From time to time,our buyers may decide not to continue purchasingproducts on our platform for various reasons,including choosing to shop in offline retail stores once more.Our sellersmay also decide to switch to our competitors s
309、ervices.Some of our existing or potential competitors may havegreater resources,capabilities and expertise in management,technology,finance,product development,sales,marketing and other areas.Further,the internet facilitates competitive entry and comparison shopping,whichenhances the ability of new,
310、smaller or lesser known businesses,including businesses from outside England,tocompete against us.As a result of these various types of current and potential competitors,we may fail to retain ormay lose our current market position,we may fail to continue to attract new and maintain our existing buye
311、rs andsellers,and we may be required to increase our spending or maintain lower prices,which could materially andadversely affect our business,prospects,financial condition and results of operations.19 Table of Contents If we are not able to respond successfully to technological or industry developm
312、ents,including changes to thebusiness models deployed in our industry,our business may be materially and adversely affected.The medicinal chemicals&botanical products market is characterized by rapid technological developments,frequentlaunches of new products and services,changes in buyer needs and
313、behavior and evolving industry standards.As aresult,participants in the medicinal chemicals&botanical products industry constantly change their product offeringsand business models and adopt new technologies to,among other things,increase cost efficiency and adapt to buyerpreferences.There can be no
314、 assurances that our key competitors will not adopt a more effective business strategythan us or that our competitors will not be able to more quickly adapt to industry changes than we will.If we fail tosuccessfully and timely respond to technological or industry developments,it could result in a lo
315、ss of sellers andbuyers,and our brand,business,prospects,financial condition and results of operations could be materially andadversely affected.We rely on many counterparties and third-party providers in our business,and the nonperformance or loss ofa significant third-party provider through bankru
316、ptcy,consolidation,or otherwise,could adversely affect ouroperations.We are party to agreements with third-party companies in various aspects of our business model,including the lessorsof our fulfillment centers and various logistics providers.If we are unable to maintain or renew leases,or lease ot
317、hersuitable premises on acceptable terms,or if our existing leases are terminated for any reason(including in connectionwith a lessors loss of its ownership rights to such premises),or if a leases terms(including rental charges)arerevised to our detriment,such matters could have a material adverse e
318、ffect on our business,financial condition andresults of operations.If these third parties do not comply with applicable legal or administrative requirements,were todefault on their obligations,or if we lose a significant provider through bankruptcy,consolidation or otherwise,wemay be subject to liti
319、gation with these third-party providers,fail to renew the respective agreements on commerciallyacceptable terms and,therefore,face the need of switching to new third-party providers,who may provide services tous at higher prices,and any of the following of which could have a material adverse effect
320、on our business,prospects,financial condition and results of operations.We may have difficulties with sourcing the products we sell through our Direct Sales business.Besides connecting,and facilitating transactions between,buyers and sellers on our Marketplace,we sell productsdirectly to our buyers
321、through our Direct Sales business.In our Direct Sales business,we purchase and hold inventoryof a selection of products in our fulfillment centers to be sold directly to buyers,and therefore are dependent on oursuppliers we source the products from.There can be no assurance that we will be able to t
322、imely replace any of oursuppliers in case their products are no longer available to us or otherwise procure the supply of products to ourfacilities to be sold through the Direct Sales business,which may adversely affect our business,prospects,financialcondition and results of operations.Computer vir
323、uses,undetected software errors and hacking may cause delays or interruptions on our systemsand may reduce the use of our services and damage our brand reputation.Our online systems,including our websites,mobile apps and our other software applications,products and systems,could contain undetected e
324、rrors,or“bugs,”that could adversely affect their performance.While we regularly updateand enhance our websites and IT platform and introduce new versions of our mobile apps,the occurrence of errors inany such updates or enhancements may cause disruptions in the provision of our services and may,as a
325、 result,causeus to lose market share,and our reputation and brand,business,prospects,financial condition and results ofoperations could be materially and adversely affected.20 Table of Contents In addition,computer viruses and cyber security compromises have in the past,which to date have not been m
326、aterial,and may in the future cause delays or other service interruptions on our systems.However,we may be subject tohacking attempts by malicious actors who seek to gain unauthorized access to our information or systems or to causeintentional malfunctions,loss or corruption of data or leakages of o
327、ur buyers and sellers personal data.While weemploy various antivirus and computer protection software in our operations,we cannot provide any assurance thatsuch protections will successfully prevent all hacking attempts(whether through the use of“denial of service”attacksor otherwise)or the transmis
328、sion of any computer viruses which,if not prevented,could significantly damage oursoftware systems and databases,cause disruptions to our business activities(including to our e-mail and othercommunications systems),result in security breaches and the inadvertent disclosure of confidential and/or sen
329、sitiveinformation and hinder access to our platform.We may incur significant costs to protect our systems and equipment against the threat of,and to repair any damagecaused by,computer viruses and hacking.Moreover,if a computer virus or other compromise of our systems becomeshighly publicized,our re
330、putation could be materially damaged,resulting in a decrease in the use of our products andservices.The inadvertent transmission of computer viruses could also expose us to liability and legal action,whichmay adversely affect our business,financial condition and results of operations.We may be unabl
331、e to effectively communicate with our buyers and sellers through email,other messages orsocial media.We rely on newsletters in the form of emails and other messaging services in order to promote our platform andinform our buyers of our product offerings and/or the status of their orders,or inform ou
332、r sellers of any updates on theterms and conditions of the sale of their products on our Marketplace.Changes in how webmail services organize andprioritize emails could reduce the number of buyers and sellers opening our emails.For example,some webmailservices offer tools and features that could res
333、ult in our emails and other messages being shown as“spam”or as lowerpriority to our consumers,which could reduce the likelihood of consumers opening or responding positively to them.Actions by third parties to block,impose restrictions on,or charge for the delivery of emails and other messages,aswell as legal or regulatory changes with respect to“permission-based marketing”or generally limiting ou