NYSE: CPHI

●
First-to-market generic drugs, which are generic drugs that are new to the PRC marketplace; or

●
Modern Traditional Chinese Medicines (“TCMs”), which are generally comprised of non-synthetic, plant-based medicinal compounds that have been widely used in the PRC for thousands of years. We apply modern production techniques to produce pharmaceutical products in different formulations, such as tablets, capsules or powders.

In selecting generic drugs
to develop and manufacture, we consider several factors, including the number of other manufacturers currently producing the particular
drug, the size of the market for that drug, the proposed or required method of distribution, the existing and expected pricing for that
particular drug in the marketplace, the costs of manufacturing the drug, and the costs of acquiring or developing the formula for the
drug. We believe that generic drugs we have always been selecting to manufacture have large addressable markets and higher profit margins
relative to other generic drugs manufactured and distributed in the PRC.

In addition, China Pharma,
through Helpson, manufactured comprehensive healthcare products and protective products.

1

China Pharma, through Helpson,
currently own and operate two production facilities in Haikou, Hainan Province, PRC. One has a construction area of 663.94 square meters,
the other factory has two buildings with production area of 20,282.42 square meters and 6,593.20 square meters. We implement quality control
procedures in this facility in compliance with the PRC’s Good Manufacturing Practices, or GMP standards, and applicable NMPA regulations
to ensure consistent quality in our products.

The NMPA promulgated Good
Manufacturing Practices for Pharmaceutical Products (2010 revised version) on February 12, 2011 (effective as of March 1, 2011) (the
“Year 2011 GMP Standards”). The Year 2011 GMP Standards outlines the basic principles and standards for the manufacturing
of pharmaceutical products and the management of quality controls in the pharmaceutical products manufacturing industry in the PRC. All
of Helpson’s production lines: tablets, capsules, dry powder, liquid injectables, solid oral solution Cephalosporins (specifically
designated), are in full compliance with the Year 2011 GMP Standards. A newly revised Drug Administration Law (the “New Law”)
came into effect on December 1, 2019. The New Law cancelled the GMP certification but impose the pilot inspection mechanism in the event
that if any production line(s) does not satisfy any pilot inspection under the New Law, the production on such production line(s) could
be suspended. As of the date of this annual report, Helpson’s production lines are in full compliance with the New Law.

Helpson has established a
comprehensive sales network and compliance system while conducting business and selling its products in the Chinese market. Helpson directly
supplies products to hospital and OTC pharmacies through provincial and municipal pharmaceutical logistic companies with legal qualifications
(such as the “Drug Supply License” and GSP certification), covering the primary healthcare institution market. Leveraging our
professional team’s academic-driven promotion model, we provide tailored services to medical institutions, offering evidence-based medical
support to build a value chain from clinical medication to patient health improvement outcomes, thereby achieving sales targets. We strive
to maintain sustained growth amidst a stringent regulatory environment.

Our corporate organizational
chart is set forth below.

2

Industry Background and Market Opportunities

China’s pharmaceutical industry is highly
policy-driven, with policies such as generic drug consistency evaluation and centralized volume-based procurement (CP) exerting a significant
impact on the market landscape. According to the National Bureau of Statistics of China, in the first half of 2024, pharmaceutical enterprises
above a designated size achieved operating income of RMB 1.47 trillion (approximately USD 205 billion), a year-on-year decrease of 1.4%,
and profits of RMB 211.2 billion (approximately USD 29.5 billion), down 1.2% year on year.

Unlike Western markets, China’s pharmaceutical
sector features a large number of small and medium-sized manufacturers, low industrial concentration, and fierce competition over homogeneous
products. Although recent healthcare reform policies have promoted industrial consolidation, the long-standing problem of industry fragmentation
remains prominent.

Population aging and rising healthcare demand
have driven industrial development, while growth is constrained by medical insurance cost-control policies. By the end of 2025, China’s
population aged 60 and above reached 323.38 million, accounting for 23.0% of the total population, a further rise from 310.31 million
(22.0%) in 2024. Professor Chen Youhua of Nanjing University noted that the expanded coverage of pension insurance has raised the proportion
of retirees from 9.26% in 2010 to 15.8% in 2020, and it is projected to exceed 23% by 2030. By the end of 2025, the number of people covered
by basic medical insurance in China reached 1.33 billion, with a coverage rate stable at 95%. The share of personal health expenditure
remains low (27.7% of total health costs in 2020, expected to remain around 27% by 2025), shifting more of the healthcare burden to government
and social funds. This has put pressure on the medical insurance system, as the number of premium payers shrinks relative to the growing
beneficiary population, further exacerbating fund imbalances.

The National Healthcare Security Administration
(NHSA) has expanded the scope of centralized volume-based procurement nationwide, securing winning bids through sharp reductions in drug
prices. Since 2018, eleven batches of national drug procurement have been conducted: the eleventh batch opened for bidding on October
27, 2025, with results announced on November 7, 2025, incorporating 55 drugs and 1,182 consistency-evaluated products. In total, 453 products
were selected, with a selection rate of 57%, covering therapeutic areas including anti-infection, oncology, diabetes, and cardiovascular
diseases.

The centralized procurement policy has favored
specialized and oncology drugs while squeezing out adjuvant therapies, forcing generic drug manufacturers to transition toward innovation.
In 2025, the total revenue of China’s basic medical insurance fund (including maternity insurance) reached RMB 3.59 trillion (approximately
USD 499 billion), with total expenditure of RMB 3.00 trillion (approximately USD 417 billion). For the first time, revenue growth (2.7%)
outpaced expenditure growth (0.8%), leading to more stable operation of the fund.

Rising medical demand and consumption levels have
highlighted the value of innovative and high-quality drugs. The Traditional Chinese Medicine (TCM) revitalization plan issued by the State
Council in 2023 positions TCM as a key pillar of health security. Data from the Medical Logistics and Supply Chain Branch of China Federation
of Logistics & Purchasing shows that the scale of China’s entire TCM industrial chain reached RMB 1.05 trillion (approximately
USD 146 billion) in 2024, a year-on-year increase of 11.6%, and is expected to exceed RMB 1.13 trillion (approximately USD 157 billion)
in 2025. By 2050, when the elderly population will account for more than 30% of China’s total population, demand for premium healthcare
products and services is expected to support steady growth of the pharmaceutical industry.

3

Intercompany activities between the holding company and our subsidiaries

As of the date of this report,
none of our subsidiaries has distributed any dividends to China Pharma, nor has China Pharma distributed any dividends to the investors.
The Company currently has no intention to distribute earnings to the shareholders and investors. The tables below present cash flow transfer
between China Pharma and Helpson, through China Pharma’s wholly owned subsidiary Onny Investment Limited (“Onny”) for
the year ended December 31, 2025 and 2024. The Company’s management understands that there are no tax consequences for cash flow
transfers between China Pharma and Helpson through Onny.

For the year ended December 31, 2025

No.

Transfer from

Transfer to

Approximate value ($)

Note

1

Helpson (via Onny)

China Pharma

470,000

For the payment of the agent service fees of China Pharma

2

Onny

China Pharma

5,000

For the payment of the agent service fees of China Pharma

For the year ended December 31, 2024

No.

Transfer from

Transfer to

Approximate value ($)

Note

1

Helpson (via Onny)

China Pharma

530,000

For the payment of the agent service fees of China Pharma

Our cash management policy
basically is to allocate the cash resources based on the needs and projection of each subsidiary within the Company. Although the purpose
of all transfers needs to be business operation-related, there is no strict limitation on how much cash can be transferred, because the
Company treats all subsidiaries as a whole group under the Company’s policy of the fund transfer. The cash transfer is requested
when needed and approved by authorized persons based on the amount of cash transfer.

Consistency Evaluation for Generic Drugs

Generic drugs replicate the
active ingredients, dosage, administration route, form, and indications of original patented drugs, matching them in safety, efficacy,
and quality. However, differences in non-active ingredients may cause slight therapeutic variations.

China’s generic drug
industry is advancing toward higher quality. The NMPA enforces lifecycle oversight to ensure safety and efficacy, with consistency evaluations
enhancing generic substitutability for originals, offering affordable, high-quality options. Generics account for approximately 77.8%
of drug sales, vital for chronic and common disease treatment.

In 2025, 16,652 product specifications
passed consistency evaluations, with injectables comprising 39.69%, covering 6,610 drug varieties. The NMPA’s September 2023 draft
Guidelines limit applications for identical products to three years post-initial approval, fostering innovation.

Post-2019 peak, the generic
market dropped to below RMB 850 billion (approximately $118 billion) in 2020 due to the pandemic, stabilizing near RMB 900 billion (approximately
$125 billion) from 2021–2023. Since 2015, consistency evaluations and CP have elevated quality and market share, with R&D focusing
on advanced generics (e.g., insoluble drug delivery, controlled-release formulations). Helpson actively pursues evaluations, with its
flagship Candesartan passing in August 2023.

Helpson has actively promoted
the consistency evaluation process of several important products since 2023; and its flagship product, Candesartan, passed the evaluation
of consistency in August 2023.

4

The PRC Legal System

Legal and Operational Risks Associated with Having the Majority
of the Company’s Operations in China

The PRC legal system is based
on written statutes. The laws, regulations and legal requirements of China are relatively new and are often changing, and their interpretation
and enforcement depend to a large extent on relevant government policy and involve significant uncertainties that could limit the reliability
of the legal protections available to us. New laws and regulations that affect existing and proposed future businesses may also be applied
retroactively.

The PRC government has broad
discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licenses and requiring
actions necessary for compliance. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our
businesses. We cannot assure you that our current ownership and operating structure would not be found in violation of any current or
future PRC laws or regulations. As a result, we may be subject to sanctions, including fines, and could be required to restructure our
operations or cease to provide certain services. In addition, any litigation in China may be protracted and result in substantial costs
and diversion of resources and management attention. Any of these or similar actions could significantly disrupt our business operations
or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,
financial condition and results of operations.

In addition, the enforcement
of laws and regulations in China can change quickly with little advance notice. In 2021, the PRC government initiated a series of regulatory
actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities
in the securities market, enhancing supervision over China-based companies listed overseas, adopting new measures to extend the scope
of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new,
it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations
or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new
laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. or other
foreign exchange. Any action by the Chinese government to exert more oversight and control over foreign investment in China-based companies
could result in a material change in our operation, cause the value of our ordinary shares to significantly decline or become worthless,
and significantly limit, or completely hinder our ability to offer or continue to offer our ordinary shares to investors and cause the
value of such securities to significantly decline or be worthless.

We cannot predict the effects
of future developments in government policy or the PRC legal system in general. We may be required in the future to procure additional
permits, authorizations and approvals for our existing and future operations, which may not be obtainable in a timely fashion or at all,
or may involve substantial costs and unforeseen risks. An inability to obtain, or the incurrence of substantial costs in obtaining, such
permits, authorizations and approvals may have a material adverse effect on our business, financial condition and results of operations.

5

CSRC Filing Requirements and Cybersecurity Review

On February 17, 2023, the
China Securities Regulatory Commission (“CSRC”) promulgated the Provisional Measures on the Administration of Overseas Securities
Offering and Listing by Domestic Companies (“Provisional Measures”), effective March 31, 2023. Under these Provisional Measures,
Chinese entities must comply with state security regulations and not divulge state secrets. The overseas issuers shall appoint a responsible
entity in China to make filings. The relevant Chinese entity shall file with CSRC within three business days of completing any issuance
of new securities overseas.

As the Company is already
publicly listed in the U.S., the Trial Measures (as defined below) do not impose additional regulatory burden on us beyond the obligation
to report to the CSRC any future offerings of our securities, or material events such as a change of control or delisting. In addition,
we believe that we are not subject to cybersecurity review, since we (i) are not network platform operators engaging in data processing
activities that affect or may affect national security; (ii) are not critical information infrastructure operators purchasing cyber products
or services that affect or may affect national security; (iii) are not network platform operators with personal information data of more
than one million users and do not need to obtain any permission or approval from the CAC in accordance with the New Measures for Cyber
Security Review. See “Risk Factor - The approval, filing or other requirements of the China Securities Regulatory Commission
or other PRC regulatory authorities will be required under PRC law in connection with any future issuance of securities overseas, and,
if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing” for more
details.

Permissions and Approvals for business operation

As of the date of this report,
the Company and Helpson have obtained all the required permissions and approvals from PRC authorities and have never been denied any applications.
Helpson has never failed to receive or maintain any permissions or approvals, nor were they rejected any such applications. However, the
PRC regulatory authorities may in the future promulgate laws, regulations, or implementing rules that require us, or Helpson, to obtain
additional permissions or approvals to operate our business. Upon that time, we cannot assure that we are able to receive such additional
permissions and approvals on time. If we do not receive or maintain the approval, or inadvertently conclude that such approval is not
required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, we may
be subject to an investigation by competent regulators, fines or penalties, and these risks could result in a material adverse change
in our operations and the value of our common stock, significantly limit or completely hinder our ability to offer or continue to offer
securities to investors, or cause such securities to significantly decline in value or become worthless.

The PRC’s Medical Insurance System

Since its establishment, the
National Healthcare Security Administration (NHSA) has adjusted the drug catalog for 8 consecutive years, with a total of 949 new drugs
added (including 635 via negotiation, 45 via bidding, and 269 via direct inclusion) and 467 drugs removed that were proven ineffective,
prone to abuse, or obsolete. As of October 2025, the cumulative payment for negotiated drugs within the agreement period by the medical
insurance fund has exceeded RMB 460 billion (approximately $65 billion), benefiting over 1 billion patient visits.

The 2025 catalog has taken
effect on January 1, 2026, with 114 new drugs added (105 via negotiation, 7 via bidding, and 2 via centralized procurement) and 29 drugs
removed that are clinically replaceable or have been out of supply for a long time. After the adjustment, the total number of drugs in
the catalog will increase to 3,253, and it is expected to reduce patient costs by more than RMB 60 billion (approximately $8.5 billion).

6

Cost control is the core driver
of policy. The medical insurance fund, which covers approximately 40% of healthcare costs, has a profound impact on industry cash flow.
In the first 11 months of 2025, the medical insurance fund recorded revenue of approximately RMB 2.7 trillion (approximately $380 billion),
expenditure of approximately RMB 2.2 trillion (approximately $310 billion), and a cumulative balance of approximately RMB 4.1 trillion
(approximately $58 billion). The 11th batch of national centralized procurement (October 2025) procured 55 drugs, involving 453 products
from 272 enterprises, covering a total of 490 drugs across 11 batches, freeing up approximately RMB 550 billion (approximately $78 billion)
in medical insurance fund space for new drugs and technologies.

Our Strategy

We believe that the pursuit
of innovation is imperative for providing the basic medical solutions needed by the majority of patients. We are passionate about protecting
human health, and we always adhere to the highest standards of ethics and integrity to fulfill our firm commitment to our customers and
patients.

We believe we are well-positioned
in a comparatively steadily growing industry in one of the fastest-growing economies in the world. With continuing growth of China’s
per capita GDP, and consumption structure upgrade, the establishment of a high-quality health care system has become one of the most important
tasks. We currently manufacture a number of off-patent branded generic drugs. Our diverse portfolio of products and new product pipelines
include products for high-incidence and high-mortality conditions in the PRC, such as cardiovascular, central nervous system (“CNS”),
infectious, and digestive diseases. We launched several epidemic prevention products such as medical masks, surgical masks, KN95 masks,
and N95 masks, and wash-free sanitizers since the outbreak of COVID-19 at year end 2019. In addition, we continue to explore comprehensive
healthcare market after the launch of Noni enzymes in 2018. China has entered a post epidemic era with the end of the dynamic zero-COVID
policy since December 2022, and the burden of being protected from the COVID and other epidemics has fallen on each individual.

Consistent evaluation of our
current existing major products will be the focus of our strategy in the near future. The consistency evaluation of generic drugs will
improve Chinese generic drugs quality and eliminate unqualified enterprises, so that high-quality generic drug companies are expected
to benefit from it. Consistency evaluation, together with the centralized drug procurement, are optimizing the competitive landscape of
the Chinese pharmaceutical industry. We believe that the market space and growth potential for Chinese generic drugs are huge.

A series of medical reform
policies introduced in recent years has profound and far-reaching impact on pharmaceutical companies. Therefore, early considerations
of the transformation and upgrading, as well as product positioning become very important. Based on more than twenty-year experience in
R&D, production and marketing experiences, and our market insights, we have decided to gradually adjust our strategy to produce generic
and innovative drugs with high value in pharma-economics, good clinical efficacy and market differentiation. These include drugs that
treat chronic diseases prevalent in China, such as geriatric diseases, cancers, and nutritional products.

In addition, as another direction
of strategic development, we will actively explore digital interactive healthcare solutions on the Internet. After the advent of the Internet
era, marketing is no longer a vertical down logical relationship, but a decentralized form of interconnection. We will proactively adjust
our business focus and allocate resources to meet market development preferences, provide more convenient user experience, better standard
treatment plans, and bring higher patient satisfaction.

7

Our objective is to leverage
our expertise in the PRC for the development, manufacture and commercialization of pharmaceutical products. We intend to achieve this
objective by:

Promoting Our Existing
Brands to Increase Our National Recognition. We intend to support and grow the existing recognition and reputation of our brands and
to maintain our branded pricing strategy through continued sales and marketing efforts through our production lines. To achieve this goal,
we plan to promote the efficacy and safety profile of our established prescription pharmaceutical products to physicians at hospitals
and clinics in all provinces of PRC through the efforts of our sales force, independent distributors and educational physician conferences
and seminars.

Promoting the progress
of consistency evaluation of our current existing main products. We intend to cope with the latest policies and the GPO requirements.
We aim to make efficient use of our existing human and material resources and strive to create favorable conditions for product sales
and international development through gaining a favorable result in the consistency evaluation.

Exploring on the consumption
healthcare market. Consumption healthcare generally refers to products or services that have certain medical features and can bring
health improvement to consumers but are mainly paid by individuals (less dependent on medical insurance) and have brand effect. We have
observed that it has become a high growth field in recent years. It is not limited by medical insurance and has low penetration rate and
high growth. It covers the fields of consumption of traditional Chinese medicine, physical examination, health care, rehabilitation and
so on. We will continue to actively explore this niche market.

Expanding Our Distribution
Network to Increase Market Penetration. By strategically partnering with regional leaders in key provinces, we will navigate regional
centralized procurement programs (such as volume-based procurement initiatives) to drive growth for both existing and pipeline products.
Building on this foundation, we plan to further extend our market reach to target new opportunities. Additionally, we are deploying digital
marketing channels, collaborating with internet hospitals to enable compliant e-prescription transfers to partnered pharmacies. This S2B2C
(Supplier-to-Business-to-Consumer) model, supported by digital tools, will enhance sales performance and market accessibility.

Explore CDMO services.
Since the State Council of China issued The Pilot Scheme of Drug Marketing License Holder System in 2016, Helpson has been
actively exploring the CDMO market, especially in the field of high-end manufacturing. Helpson will focus on developing CDMO of pharmaceutical
preparations required in the whole life cycle from preclinical, clinical trials, scale-up manufacturing to drug marketing and make full
use of its more than two decades of whole process experience in China’s pharmaceutical industry to engage in pharmaceutical formula
research, development, NMPA production application, industrialization and commercialization. Helpson strives to achieve internal and external
coordination and complement each other’s resources and advantages.

Acquiring Complementary
Products Lines, Technologies, Distribution Networks and Companies. We intend to selectively pursue strategic acquisition opportunities
that we believe will grow our customer base, expand our product lines and distribution network, enhance our manufacturing and technical
expertise or otherwise complement our business or further our strategic goals. Pursuing strategic acquisitions is a significant component
of our growth strategy. The Company has not identified any strategic acquisition opportunities as of the date of this report on Form 10-K.

8

Products

Helpson currently has a product
portfolio of 22 products, including 19 pharmaceutical products that address a wide variety of diseases and medical indications, and the
remaining are comprehensive healthcare and protective products. All of its pharmaceutical products have demonstrated safety and efficacy
in clinical trials sufficient to obtain approval by the NMPA and are sold on a prescription basis. The following table summarizes the
approved indications for our marketed products and the year in which each of such products was first marketed to our customers.

Year of

Commercial

Product

Indication

Launch

Central Nervous System (CNS) and Cerebral-Cardiovascular Diseases

Cerebroprotein Hydroloysate Injection

Memory decline and attention deficit disorder caused by the sequela of craniocerebral trauma and cerebrovascular diseases.

1996

Gastrodin Injection

Tiredness, loss of concentration, poor sleep, and traumatic syndromes of the brain, including vertigo, neuralgia and headaches.

2005

Propylgallate for Injection

Cerebral thrombosis, coronary heart disease and complications after surgery such as thrombus deep phlebitis.

2006

Ozagrel Sodium for Injection

Acute thrombotic cerebral infarction and dyskinesia associated with cerebral infarction

2006

Alginic Sodium Diester Injection

Ischemic heart disease, cerebrovascular diseases (cerebral thrombosis, cerebral embolism and coronary heart disease) and high lipoprotein blood disease.

2006

Bumetanide for Injection

Various edema diseases (including those associated with heart failure, hepatic cirrhosis, nephropathy, and pulmonary edema), hypertension, acute renal failure, hyperkalemia, hypercalcemia and for the rescue from acute drug poisoning.

2007

Candesartan

Hypertension

2013

9

Anti-infection and Respiratory Diseases

Roxithromycin Dispersible Tablets

Pharyngitis and tonsillitis caused by Streptococcus pyogenes; sinusitis, tympanitis, acute and chronic bronchitis caused by acute bacterial infection, Mycoplasma pneumonia and Chlamydia pneumoniae; urethritis and cervical infection caused by chlamydia trachomatis; skin soft tissue infection caused by sensitive bacteria.

1995

Cefaclor Dispersible Tablets

Tympanitis, lower respiratory tract infection, urinary tract infections and skin/skin tissue infection.

2002

Cefalexin Capsules

Acute tonsillitis caused by sensitive fungi, airway infections, such as pharyngitis, otitis media, nasal sinusitis and bronchitis; pneumonia, respiratory tract infection, urinary tract infections and skin soft tissue infections.

2002

Andrographolide

Detoxification, antibacterial and anti-inflammatory. For sore throat caused by upper respiratory tract infection

2003

Clarithromycin Granules and Capsules

Nasopharynx infection, lower respiratory tract infection, skin tissue infection, acute tympanitis and mycoplasma pneumonia caused by clarithromycin susceptible organisms; urethritis and cervical infection caused by chlamydia trachomatis; and the treatment of legionella infection, mycobacterium avium complex (MAC) infection and helicobacter pylori infection.

2004

Naproxen Sodium and Pseudophedrine Hydrochlorida Sustained Release Tablet

Relieves cold, sinus and flu symptoms, blocked nose caused by anaphylaxis rhinitis, runny nose, fever, sore throat, symptoms of myalgia in the limbs and pain around the joints.

2005

10

Digestive Diseases

Hepatocyte Growth-promoting Factor for Injection

Serious viral hepatitis symptoms caused by various viral hepatitis types (acute, subnormal temperature, chronic serious disease early or middle period of hepatitis).

2005

Tiopronin

Acute and chronic Hepatitis B, and for the relief of drug-induced liver injury.

2009

Compound Ammonium Glycyrrhetate S for Injection

Liver dysfunction caused by acute and chronic hepatitis; supplemental treatment to toxic/trauma hepatitis, liver cancer; also for the indication of food/drug poisoning, and drug allergy.

2009

Omeparzole

Gastroesophageal reflux disease, and other conditions caused by excess acidic formulations in the stomach, including gastric ulcers, recurrent duodenal ulcers and Zollinger-Ellison Syndrome.

2009

Others

Vitamin B6 for Injection

Vitamin supplement.

2005

Granisetron Hydrochloride Injection

Nausea and vomiting caused by radiotherapy and chemotherapy during the treatment of malignant tumors.

2006

Comprehensive Healthcare and Protective Products

Noni Enzyme

natural, healthy and
nutrition-rich a natural, healthy and nutrition-rich food supplement

2018

Sanitizer

75% alcohol wash-free sanitizer

2020

Masks

KN95 Particulate Respirator, Disposable Medical Mask, Particle Filtering Mask, N95 Medical Protective Mask

2020 to 2023

11

Set forth below are our revenues
by product category in millions (USD) for the years ended December 31, 2025 and 2024:

Twelve Months Ended

December 31,
Net

Product Category
2025
2024
Change %
Change

CNS Cerebral & Cardio Vascular
1.32
1.35
-0.03
-2 %

Anti-Viral/ Infection & Respiratory
2.48
2.75
-0.27
-10 %

Digestive Diseases
0.23
0.2
0.03
15 %

Other
0.07
0.18
-0.11
-61 %

Due to the nature of the pharmaceutical
industry, Helpson continually strives to change our product portfolio to respond to changes in market demand. Based on a foundation established
by a number of our widely-recognized prescription products, such as Cefaclor and Roxithromycin, Helpson has launched and will continue
to launch a variety of pharmaceuticals. The core criteria for Helpson’s selection of potential pipeline products are strong market
demand, proven efficacy, and safety. In an effort to gain an advantage in the marketplace, Helpson often seeks to improve the production
process of the new generic products Helpson elects to manufacture or to improve the quality of a proposed product to increase its efficacy.

Helpson also adjusts the delivery
systems and marketing for each of our products based on the product’s target patient group. We believe that maintaining a variety
of delivery systems (e.g. tablets, capsules, injectables and dry powders) for certain of its products targeted at different groups enhances
its competitive position in the marketplace. As a result, its sales and marketing personnel work closely with management and the research
and development personnel to determine which of the products can successfully be marketed for more than one delivery system and which
generic drugs in the marketplace may be good candidates to manufacture and distribute using different delivery systems.

Product Development

Research & development
and innovation represent the core competitive advantage for a company’s sustainable growth. For pharmaceutical companies, products
with proprietary intellectual property are not only strategic resources for comprehensive strength, but also important tools to engage
in social responsibility. Helpson has been focusing on the research and development of both first generic drugs and innovative drugs.
Additionally, Helpson also has actively worked to meet unfulfilled medical needs by sticking to a market-oriented approach and continuously
improving the effectiveness and ease of use of our drugs, which are supported by our well-designed system for intellectual property management.

The PRC State Council issued
“Opinions on Carrying out Consistency Evaluation on Quality and Efficacy of Generic Drugs” on March 5, 2016, requiring
all manufacturers of generic chemical pipeline products to carry out Consistency Evaluations before they may obtain final registration
approval. Drugs failing to meet these requirements may not be re-registered.

Currently, due to this newly
issued NMPA production approved standards and experimental requirements, as with all other Chinese generic pharmaceutical companies, almost
all of Helpson’s pipeline products have undergone major adjustments.

Helpson’s recent research
and development work is mainly aimed at promoting the consistency evaluation of several major products already on the market, as well
as the continued exploration of comprehensive health product categories.

Helpson has recently acquired
formulas for dry eye syndrome, chronic obstructive pulmonary disease, and a pharmaceutical composition for treatment of psoriasis, etc.
It is expected to launch those products as soon as the registration process is completed. In addition, Helpson launched N95 Medical Protective
masks in early 2023. Since China ended its zero-case policy and no longer requires shutdown or quarantine in December 2022, the market
demand for prevention materials, such as masks has surged.

12

Distribution and Customers

Helpson has a well-established
sales network. As its current pharmaceutical product portfolio is comprised mainly of prescription drugs, its major sales targets are
hospitals. As of December 31, 2025, we have been distributing products directly to hospital endpoints and OTC pharmacies through provincially
and municipally licensed pharmaceutical companies (holding valid Drug Supply Licenses and GSP certifications), achieving comprehensive
coverage of primary healthcare markets. Leveraging our professional team’s academic-driven promotion model, we engage with medical institutions
by providing evidence-based medical support. This approach establishes a value chain extending from clinical medication to measurable
patient health outcomes, enabling us to achieve sales targets while maintaining sustainable growth within China’s stringent regulatory
environment.

Due to the nature of Helpson’s
products and current governmental regulations, all of its customers are located in the PRC. Helpson has established long-standing relationships
with key customers.

Production Facilities

China Pharma, through Helpson,
manufacture and package our products at our manufacturing facility in the Haikou Free Trade Zone in Haikou, Hainan Province. The old manufacturing
facility, which was built in 2002, is approximately 8,000 square meters (approximately 12.4 million square feet); and the new building,
approximately 20,000 square meters (approximately 31 million square feet), was completed in 2013. Helpson maintains production lines that
conform to the 2011 GMP standards for various product forms including: tablets, capsules, dry power, liquid injectables, solid oral solution
Cephalosporins (specifically designated); other than that, it also has production lines for health care products and various types of
masks that meet national standards.

All of the existing production
lines have met the GMP Standards which became effective as of March 1, 2011. On December 1, 2019, the newly revised Drug Administration
Law (the “New Law”) came into effect, which cancelled the GMP certification but impose the pilot inspection mechanism.

Raw Materials

Helpson requires a supply
of a wide variety of raw materials to manufacture its products. Helpson employs purchasing staff with extensive knowledge of its products
who work with the product development, and formulations and quality control personnel to source raw materials for the products. Currently,
Helpson relies on numerous suppliers in the PRC and overseas to deliver the required raw materials and believes it has at least three
principal suppliers for each of our most critical raw materials. Historically, Helpson has not had difficulty obtaining raw materials
from suppliers. For the year ended December 31, 2025, the purchases of raw material purchases from its three top suppliers accounted for
26.6%, 26.3%, and 9.6%, respectively. For the year ended December 31, 2024, three top suppliers accounted for 22.9%, 21.3%, and 14.6%,
respectively.

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Competition

We believe we have established
a commercially competitive position in the highly-fragmented pharmaceutical industry in China through our core competitive advantages,
as described below:

Helpson has a highly-efficient commercialization
process for new products, including significant experience with the NMPA registration process.

Helpson has over 20 years
of product-development experience during which time it has implemented processes to efficiently introduce and market new and existing
products to the Chinese market.

Helpson has a market-oriented product portfolio
and product lines.

Helpson’s product focuses
on developing and manufacturing medicines that help large patient groups, such as the infectious disease and cardio vascular disease patient
groups. Its diversified GMP-certified manufacturing facility includes various production lines targeting a variety of delivery mechanisms,
such as tablets, capsules, cephalosprine tablets, cephalosprine capsules, liquid-injectables and dry powder injectables, which enables
it to effectively manufacture a broad range of new drugs; other than that, it also has production lines for health care products and various
types of masks that meet national standards.

We have product diversification to target specific
sub-markets.

We attempt to differentiate
our products from those of our competitors by changing, and, in many cases, improving certain physical aspects of our products to market
under different market segments. For example, to make our Cefaclor product more patient friendly to children and patients with swallowing
problems, we added an enteric coating to make our tablets easier to swallow.

Helpson has a national sales network and a
highly-trained marketing team.

Helpson’s experienced
sales team has industry knowledge and know-how to synergistically combine its strong market insight with successful commercialization
platforms.

Helpson has developed high-quality relationships
with leading hospital and clinic administrators and physicians.

While sales of the pharmaceutical
products to hospitals are made through the distributors, Helpson believes it has established long-term cooperation relationships with
leading hospitals and healthcare clinics throughout China resulting from its long-term promotional efforts and periodic physician seminars,
so that to improve the perception of the products in the marketplace and help identify and select high-volume drugs to develop into new
generic products relatively early in the process.

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Notwithstanding such favorable
positioning, Helpson is subject to intense competition. There are both local and overseas pharmaceutical enterprises that are engaged
in the manufacture and sale of potential substitute or similar pharmaceutical products in the PRC. These competitors may have more capital,
better research and development resources, better manufacturing and marketing capability, and more experience than we do.

Our profitability may be adversely affected if:

●
the number of our competitors increases;

●
competitors engage in increased price competition; or

●
competitors develop new products or product substitutes having comparable medicinal applications or therapeutic effects that are more effective, less costly and/or have more perceived benefits than those produced by us.

In addition, imported products
and China’s admission as a member of the World Trade Organization (“WTO”) creates increased competition. The PRC became
a member of the WTO in December 2001. As a result, competition in the pharmaceutical industry in the PRC intensified generally in two
respects. First, with lower import tariffs, imported pharmaceutical products manufactured overseas may become increasingly competitive
in terms of pricing. Second, we believe that well-established foreign pharmaceutical manufacturers may set up production facilities in
the PRC and compete with domestic manufacturers directly. With the expected increased supply of competitively-priced pharmaceutical products
in the PRC, we may face increased competition from foreign pharmaceutical products, especially in terms of high-end pharmaceutical products,
including certain types of products manufactured by U.S. manufacturers.

Intellectual Property

We regard our packaging designs,
trademarks, trade secrets, patent and similar intellectual property as parts of our core competence that are critical to our success.
We rely on patent, trademark and trade secret law, as well as confidentiality agreements with certain of our employees, distributors and
others to protect our intellectual property rights.

In November 2008, Helpson
purchased the patented medical formula and the manufacturing processes for a cerebral/cardio-vascular indication from a third-party laboratory.
In connection with that acquisition, we obtained the title of the patent. This patent expired in 2025.

In 2012, Helpson acquired
another patent related to a medical formula for the treatment of cerebral/cardio-vascular diseases. This patent expires in 2029.

In 2022, Helpson, our wholly
owned subsidiary, acquired a utility model patent and an invention patent application regarding the creation of an ophthalmic oxygen enriched
atomization therapeutic apparatus from Chengdu Bonier Medical Technology Development Co., Ltd. (“Bonier”). Based on the technology
transfer agreement, Helpson will receive the utility model patent right of the technical invention and the patent application right of
the invention, and Bonier will provide relevant technical services.

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In 2023, Helpson, our wholly
owned subsidiary, acquired an invention patent of medicine composition for treating the chronic obstructive pulmonary disease from Tao
Liu. Based on the technology transfer agreement, Helpson will receive the patent right of the invention, and Tao Liu will provide relevant
technical services.

In 2024, Helpson, our wholly
owned subsidiary, acquired an invention patent of a pharmaceutical composition for treatment of psoriasis disease from Lihua Li. Based
on the technology transfer agreement, Helpson will receive the patent right of the invention, and Lihua Li will provide relevant technical
services.

In 2024, Helpson, our wholly
owned subsidiary, acquired an invention patent of an Apst solid dispersion and preparation method thereof (psoriatic arthritis and moderate
to severe plaque psoriasis) from Li Yong. Based on the technology transfer agreement, Helpson will receive the patent right of the invention,
and Li Yong will provide relevant technical services.

In 2024, Helpson, our wholly
owned subsidiary, acquired an invention patent of a riboflavin stomach floating tablet and a preparation method from Zhao Xijun. Based
on the technology transfer agreement, Helpson will receive the patent right of the invention, and Zhao Xijun will provide relevant technical
services.

In 2024, Helpson, our wholly
owned subsidiary, acquired an invention patent of a pharmaceutical composition for the treatment of gray nail disease from Zhao Chunhai.
Based on the technology transfer agreement, Helpson will receive the patent right of the invention, and Zhao Chunhai will provide relevant
technical services.

In 2024, Helpson, our wholly
owned subsidiary, acquired an invention patent of a drug composition of ansetropi simvastatin from Du Pingping. Based on the technology
transfer agreement, Helpson will receive the patent right of the invention, and Du Pingping will provide relevant technical services.

In 2025, Helpson, our wholly
owned subsidiary, acquired an invention patent of an Apst Vector and Method for Its Preparation from Yan Yang. Based on the technology
transfer agreement, Helpson will receive the patent right of the invention, and Yan Yang will provide relevant technical services.

In 2025, Helpson, our wholly
owned subsidiary, acquired an invention patent of a Captopril microcapsule and Method for Its Preparation from Lijie tang. Based on the
technology transfer agreement, Helpson will receive the patent right of the invention, and Lijie tang will provide relevant technical
services.

In 2025, Helpson, our wholly
owned subsidiary, acquired an invention patent of an Ipragliflozin tablets and Method for Its Preparation from Juan Zhang. Based on the
technology transfer agreement, Helpson will receive the patent right of the invention, and Juan Zhang will provide relevant technical
services.

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In 2026, Helpson, our wholly
owned subsidiary, acquired an invention patent of a Topiroxostat Nanoemulsion and Method for Its Preparation from Xiaoyun Chen. Based
on the technology transfer agreement, Helpson will receive patent right of the invention, and Xiaoyun Chen will provide relevant technical
services.

In 2026, Helpson, our wholly
owned subsidiary, acquired an invention patent of a Prinsepia Utilis Esterol Sublingual Tablets and Method for Its Preparation from Xiaoyan
Zhang. Based on the technology transfer agreement, Helpson will receive patent right of the invention, and Xiaoyan Zhang will provide
relevant technical services.

As of December 31, 2025, Helpson
owns 15 registered trademarks, including marks for eight of the 19 pharmaceutical products Helpson manufactures, including the tradenames
Fukexing, Beisha, Shiduotai, Xinuo, Pusenlitai, Pusenouke, Shuchang, Shenkaineng, XERONINE, and Aronino, as well as marks for the HPS
logo, two HELPSON logos and two other logos.

Environmental Matters

Helpson complies with the
Environmental Protection Law of China as well as applicable local regulations. In addition to statutory and regulatory compliance, Helpson
actively ensures the environmental sustainability of the operations. Penalties may be levied upon them if we fail to adhere to and maintain
certain standards. Such failure has not occurred in the past, and Helpson does not anticipate that it will occur in the future, but no
assurance can be given in this regard.

Regulations

Regulations Relating to
Pharmaceutical Manufacture Industry. The pharmaceutical manufacture industry in China is highly regulated. The primary regulatory
authority is the NMPA, including its provincial and local branches. As a developer and producer of medicinal products, Helpson is subject
to regulation and oversight by the NMPA and its provincial and local branches. The Medicinal Product Administration Law of the People’s
Republic of China provides the basic legal framework for the administration of the production and sale of pharmaceuticals in China and
covers the manufacturing, distribution, packaging, pricing and advertising of pharmaceutical products. These regulations set forth detailed
rules with respect to the administration of pharmaceuticals in China. We are also subject to other PRC laws and regulations that are applicable
to business operators, manufacturers and distributors in general.

Registration and Approval
of Medicine. Pursuant to the PRC Provisions for Drug Registration, a medicine must be registered and approved by the NMPA before it
can be manufactured and sold. The registration and approval process requires the manufacturer to submit to the NMPA a registration application
containing detailed information concerning the efficacy and quality of the medicine and the manufacturing process and the production facilities
the manufacturer expects to use. A series of policies on consistency evaluation and drug review process have been issued in recent years,
and potentially more reforms and adjustments are underway in order to promote the pharmaceutical industry in China in line with the international
standards. In this context, we believe that the uncertainties in the timetables for obtaining NMPA production approvals for products under
research are increasing. If a manufacturer chooses to manufacture pre-clinical medicine, it is also required to conduct pre-clinical trials,
apply to the NMPA for permission to conduct clinical trials and go through the clinical trials. If a manufacturer chooses to manufacture
a post-clinical medicine, it only needs to go through clinical trials. In both cases, a manufacturer needs to file clinical data with
the NMPA for approval to manufacture after clinical trials are completed.

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New Medicine. If a
new medicine is approved by the NMPA, the NMPA will issue a new medicine certificate to the manufacturer and impose a monitoring period
from one to five years. During the monitoring period, the NMPA will monitor the safety of the new medicine and will not accept new medicine
certificate applications for identical medicine by another pharmaceutical company, nor will it approve the production or import o identical
medicine by other pharmaceutical companies. As a result of these regulations, the holder of a new medicine certificate has the exclusive
right to manufacture it during the monitoring period. We currently have the new medicine certificates for our Pusenouke, Cefaclor dispersible
tablets and Roxithromycin dispersible tablets and Bumetanide for injection products.

National Production Standard
and Provisional Standard. In connection with the NMPA’s approval of a new medicine, the NMPA will normally direct the manufacturer
to produce the medicine according to a provisional national production standard, or a provisional standard. A provisional standard is
valid for two years, during which time the NMPA closely monitors the production process and quality consistency of the medicine to develop
a national final production standard for the medicine, or a final standard. Three months before the expiration of the two-year period,
the manufacturer is required to apply to the NMPA to convert the provisional standard to a final standard. Upon approval, the NMPA will
publish the final standard for production. The NMPA has no statutory timeline to complete its review and grant approval for the conversion.
In practice, the approval for conversion to a final standard is time-consuming and could take a number of years. However, during the NMPA’s
review period, the manufacturer may continue to produce the medicine according to the provisional standard.

Transitional Period.
Prior to the latter of (1) the expiration of a new medicine’s monitoring period or (2) the date when the NMPA grants a final standard
for a new medicine after the expiration of the provisional standard, the NMPA will not accept applications for identical medicine nor
will it approve the production of identical medicine by other pharmaceutical companies. Accordingly, the manufacturer will continue to
have an exclusive production right for the new medicine during this transitional period.

Continuing NMPA Regulation

Pharmaceutical manufacturers
in China are subject to continuing regulation by the NMPA. If the labeling or its manufacturing process of an approved medicine is significantly
modified, a new pre-market approval or pre-market approval supplement will be required by the NMPA. A pharmaceutical manufacturer is subject
to periodic inspection and safety monitoring by the NMPA to determine compliance with regulatory requirements.

The NMPA has a variety of
enforcement actions available to enforce its regulations and rules, including fines and injunctions, recall or seizure of products, imposition
of operating restrictions, partial suspension or complete shutdown of production and criminal prosecution.

Pharmaceutical Product Manufacturing

Permits and Licenses for
Pharmaceutical Manufacturers. A pharmaceutical manufacturer must obtain a pharmaceutical manufacturing permit from the NMPA’s
relevant provincial branch. This permit is valid for five years and is renewable for an additional five-year period upon its expiration.
Our current pharmaceutical manufacturing permit, issued by the NMPA, will expire on June 8, 2030. We are confident the permit will be
valid through expiration, upon then the Company will be able to renew it.

Good Manufacturing Practice.
A pharmaceutical manufacturer must meet the Good Manufacturing Practice standards, or GMP standards, for each of its production facilities
in China in respect of each form of pharmaceutical product it produces. GMP standards include staff qualifications, production premises
and facilities, equipment, raw materials, environmental hygiene, production management, quality control and customer complaint administration.
Prior to December 1, 2019, if a manufacturer meets the GMP standards, the NMPA will issue to the manufacturer a Good Manufacturing Practice
certificate, or a GMP certificate, with a five-year validity period. However, for a newly established pharmaceutical manufacturer that
meets the GMP standards, the NMPA will issue a GMP certificate with only a one-year validity period. The Year 2011 GMP Standards became
effective on March 1, 2011, and pharmaceutical manufacturers (except for manufacturers of injectables, blood products or vaccines, which
had a three-year grace period) had a five-year grace period to upgrade existing facilities to comply with the revisions.

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All of Helpson’s existing
production lines have met the Year 2011 GMP Standards. On December 1, 2019, the newly revised Drug Administration Law (the “New
Law”) came into effect. One of the major amendments is the cancellation of GMP certification. The New Law eliminated the requirement
that drug administration authorities shall assess drug manufacture enterprises and drug trading enterprises, and issue assessment certificates.
Instead, it requires that drug manufacturing enterprises and drug trading enterprises establish and improve the quality management systems
of manufacture and trade of drugs and ensure that the process of manufacturing and trading of drugs always meets all legal requirements.
This means a stricter form of supervision is implemented compared to the prior GMP certificates system. Helpson’s production lines
are subject to pilot inspections under the New Law.

We believe that GMP inspection
only switches to another form, which includes flight inspection, drug production license inspection (for on-site management and quality
system), as well as product inspection.

Product Liability and Consumers Protection

Product liability claims may
arise if any of our pharmaceutical products have a harmful effect on any consumer who may make a claim for damages or compensation as
an injured party. The General Principles of the Civil Law of the PRC, which became effective in January 1987, stated that manufacturers
and sellers of defective products causing property damage or injury shall incur civil liabilities for such damage or injuries. The Civil
Code of the PRC, which came into force on January 1, 2021, stipulates that if damage is caused to others due to defects in products, the
infringed can claim compensation from the manufacturer of the products or the seller of the products. If the defect is caused by the producer,
the seller shall have the right to recover compensation from the producer. If the product is defective due to the fault of the seller,
the producer shall have the right to recover from the seller after making compensation.

The Product Quality Law of
the PRC was enacted in 1993 and amended in 2000 to strengthen the quality control of products and protect consumers’ rights and
interests. Under this law, manufacturers and distributors who produce or sell defective products may be subject to confiscation of earnings
from such sales, revocation of business licenses and imposition of fines, and in severe circumstances, may be subject to criminal liability.

The Law of the PRC on the
Protection of the Rights and Interests of Consumers was promulgated on October 31, 1993 and became effective on January 1, 1994 to protect
consumers when they purchase or use goods or services. All business operators must comply with this law when they manufacture or sell
goods and/or provide services to customers. In extreme situations, pharmaceutical product manufacturers and distributors may be subject
to criminal liability if their goods or services lead to the death or injuries of customers or other third parties.

Other Regulations

In addition to the regulations
relating to pharmaceutical industry in China, Helpson is subject to the regulations applicable to a foreign invested enterprise in China.

Foreign Currency Exchange.
Pursuant to the Foreign Currency Administration Rules promulgated in 1996 and amended in 1997 and various regulations issued by the
State Administration of Foreign Exchange, or the SAFE, and other relevant PRC government authorities, Renminbi is freely convertible only
to the extent of current account items, such as trade-related receipts and payments, interests and dividends. Capital account items, such
as direct equity investments, loans and repatriation of investment, require the prior approval from the SAFE or its local counterpart
for conversion of Renminbi into a foreign currency, such as U.S. dollars, and remittance of the foreign currency outside the PRC.

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Payments for transactions
that take place within the PRC must be made in Renminbi. Unless otherwise approved, PRC companies other than foreign investment enterprises
(FIEs) must convert foreign currency payments they receive from abroad into Renminbi. On the other hand, FIEs may retain foreign currency
in accounts with designated foreign exchange banks, subject to a cap set by the SAFE or its local counterpart.

Dividend Distribution.
Under the PRC regulations governing dividend distributions by wholly foreign-owned enterprises and Sino-foreign equity joint ventures,
wholly foreign-owned enterprises and Sino-foreign equity joint ventures in the PRC may pay dividends only out of their accumulated profits,
if any, determined in accordance with PRC accounting standards and regulations. Additionally, these foreign-invested enterprises are required
to set aside certain amounts of their accumulated profits each year, if any, to fund certain reserve funds. These reserves are not distributable
as cash dividends.

PCAOB Regulations

As auditors of companies that
are traded publicly in the United States and a firm registered with the PCAOB, our auditor is required by the laws of the United States
to undergo regular inspections by the PCAOB. We are required by the Holding Foreign Companies Accountable Act (“HFCAA”) to
have an auditor that is subject to the inspection by the PCAOB. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign
Companies Accountable Act, or AHFCAA, and on December 29, 2022, the Consolidated Appropriations Act, 2023 (the “CAA”),
which the AHFCAA forms a part, was signed into law, and it officially reduced the number of consecutive non-inspection years required
for triggering the prohibitions under the HFCAA from three years to two. On December 15, 2022, the PCAOB announced in the 2022 Determination
its determination that the PCAOB was able to secure complete access to inspect and investigate accounting firms headquartered in mainland
China and Hong Kong,. Although currently the PCAOB is able to secure complete access for the inspection and investigation of accounting
firms headquartered in mainland China and Hong Kong, due to the previous history that the PAOCB was at one time not able to do so, should
the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken
by any authority in either jurisdiction, including by the CSRC or the MOF, the PCAOB will make determinations under the HFCAA as and when
appropriate. We cannot assure you whether NYSE American or other regulatory authorities would apply additional and more stringent criteria
to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel
and training, or sufficiency of resources, geographic reach, or experience as it relates to the audit of our financial statements. There
is a risk that the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an
authority in a foreign jurisdiction or any other reasons, and that the PCAOB may re-evaluate its determinations as a result of any obstruction
with the implementation of the Protocol. Such lack of inspection or re-evaluation could cause trading in the Company’s securities
to be prohibited under the HFCAA to ultimately result in a determination by a securities exchange to delist the Company’s securities.
In addition, under the HFCAA, as amended by the AHFCAA, our securities may be prohibited from trading on the NYSE American or other U.S.
stock exchanges if our auditor is not inspected by the PCAOB for two consecutive years, and this ultimately could result in our Common
Stock being delisted by the NYSE American.

Employees

As of December 31, 2025, we
had 221 employees, among which 215 employees were full-time employees and 6 employees were temporary employees. None of our employees
is represented by a labor union and, in general, we consider our relationship with our employees to be good.

As required by applicable
Chinese law, we have entered into employment contracts with substantially all of our officers, managers and employees. We are working
towards entering into employment contracts with those employees who do not currently have employment contracts with us. The PRC enacted
a new Labor Contract Law, which became effective on January 1, 2008. We have updated our employment contracts and employee handbook and
are in compliance with such law.

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