Company: JWEL
Filing Date: 2025-08-26
Form Type: F-3
Source: 0001213900-25-080759
Chunk: 26

Company: Jowell Global Ltd.
Filing Date: 2025-08-26
Form: F-3
Chunk 26
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 and comply with the obligations
of the shareholders of Shanghai Juhao under the Agreements.

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Pursuant to these agreements,
Jowell Shanghai has satisfied conditions for consolidation of the VIE under U.S. GAAP and become the primary beneficiary of the VIE for
accounting purpose. Therefore, Shanghai Juhao is considered a VIE under the Statement of Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) 810 “Consolidation”, because the equity investments in Shanghai Juhao
no longer have the characteristics of a controlling financial interest, and the Company, through Jowell Shanghai, is the primary beneficiary
of Shanghai Juhao. A VIE is an entity that either has a total equity investment that is insufficient to finance its activities without
additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such
as through voting rights, right to receive the expected residual returns of the entity. The variable interest holder, if any, that has
a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE. Jowell Shanghai is
deemed to have a controlling financial interest through a series of contractual arrangements and be the primary beneficiary of Shanghai
Juhao because it has both of the following characteristics: (1) the power to direct activities at Shanghai Juhao that most significantly
impact such entity’s economic performance and (2) the obligation to absorb losses of, and the right to receive benefits from, Shanghai
Juhao that could potentially be significant to such entity. Pursuant to the contractual arrangements with Shanghai Juhao, Shanghai Juhao
shall pay service fees equal to all of its net profit after tax payments to Jowell Shanghai. Such contractual arrangements are designed
so that the Shanghai Juhao would operate for the benefit of Jowell Shanghai and ultimately, the Company.

Although the VIE Contractual
Arrangements have been widely adopted by PRC companies seeking for listing aboard, such arrangements have not been truly tested in any
of the PRC courts. The VIE structure is subject to various risks. For example, the contractual arrangements may not be as effective as
direct ownership in exerting our rights over Shanghai Juhao. We expect to rely on the performance by the VIE shareholders of their respective
obligations under the contracts to consolidate financial results of the VIE in our financial statements