Company: IMG
Filing Date: 2025-07-21
Form Type: 10-K
Source: 0001641172-25-020300
Chunk: 32

Company: CIMG Inc.
Filing Date: 2025-07-21
Form: 10-K
Item: Item 1A
Chunk 32
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 a multi-level protection scheme (MLPS), under which network operators are required to perform obligations of security
protection to ensure that the network is free from interference, disruption or unauthorized access, and prevent network data from being
disclosed, stolen or tampered. Under the MLPS, entities operating information systems must have a thorough assessment of the risks and
the conditions of their information and network systems to determine the level to which the entity’s information and network systems
belong-from the lowest Level 1 to the highest Level 5 pursuant to the Measures for the Graded Protection and the Guidelines for Grading
of Classified Protection of Cyber Security. The grading result will determine the set of security protection obligations that entities
must comply with. Entities classified as Level 2 or above should report the grade to the relevant government authority for examination
and approval.

Recently,
the Cyberspace Administration of China has taken action against several Chinese internet companies in connection with their initial public
offerings on U.S. securities exchanges, for alleged national security risks and improper collection and use of the personal information
of Chinese data subjects. According to the official announcement, the action was initiated based on the National Security Law, the Cyber
Security Law and the Measures on Cybersecurity Review, which are aimed at “preventing national data security risks, maintaining
national security and safeguarding public interests.” On July 10, 2021, the Cyberspace Administration of China published a revised
draft of the Measures on Cybersecurity Review, expanding the cybersecurity review to data processing operators in possession of personal
information of over 1 million users if the operators intend to list their securities in a foreign country.

It
is unclear at the present time how widespread the cybersecurity review requirement and the enforcement action will be and what effect
they will have on the life sciences sector generally and the Company in particular. China’s regulators may impose penalties for
non-compliance ranging from fines or suspension of operations, and this could lead to us delisting from the U.S. stock market.

In
addition, our securities may be prohibited from trading on a national exchange or over-the-counter in the United States under the Holding
Foreign Companies Accountable Act, if the PCAOB determines that it cannot inspect or fully investigate our auditors for two consecutive
years.

Also,
on August 20, 2021, the National People’s Congress passed the Personal Information Protection Law, which will be implemented on
November 1, 2021. The law creates a comprehensive set of