Red Flags Detected

• ⚠ Variable Conversion Price (new) — The conversion price is not fixed but floats with the market, which can lead to significant dilution for existing shareholders.
• ⚠ Original Issue Discount (new) — The company receives only $2,000,000 but owes $2,170,000, meaning the effective cost of capital is higher than the stated principal.
• ⚠ 18.0% Per Annum (new) — Upon default, the interest rate jumps to 18%, which could severely strain the company's finances.
• ⚠ 110% of the Portion of the Outstanding Balance Being Prepaid (new) — The company must pay a 10% premium to prepay the note, making early exit expensive.
• ⚠ Delisting (new) — The company has a history of Nasdaq compliance issues and faces immediate delisting risk if it fails the minimum bid price within 12 months after its May 2026 reverse split.
• ⚠ Vie (new) — The company uses a VIE structure, meaning investors hold shares in a Cayman shell with no direct ownership of the Chinese operating business, and the VIE agreements have not been tested in court.
• ⚠ Controlled-company Status (new) — Prospectus discloses controlled-company status under exchange rules, which permits exemptions from certain independent-director and committee requirements.