Company: JL
Filing Date: 2025-07-28
Form Type: 20-F
Source: 0001213900-25-068049
Chunk: 30

Company: J-Long Group Ltd
Filing Date: 2025-07-28
Form: 20-F
Item: Item 3
Chunk 30
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.-listed companies with significant operations in China. On April 21, 2020,
SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement
highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China,
reiterating past SEC and PCAOB statements on matters including the difficulty associated with inspecting accounting firms and audit work
papers in China and higher risks of fraud in emerging markets and the difficulty of bringing and enforcing SEC, Department of Justice
and other U. S. regulatory actions, including in instances of fraud, in emerging markets generally.

On
May 20, 2020, the U. S. Senate passed the HFCA Act requiring a foreign company to certify it is not owned or controlled by a
foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB
inspection. If the PCAOB is unable to inspect the company’s auditors for two consecutive years, the issuer’s securities
are prohibited to trade on a national exchange. On December 2, 2020, the U. S. House of Representatives approved the HFCA Act.

On
May 21, 2021, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily
operating in a “ Restrictive Market”; (ii) prohibit Restrictive Market companies from directly listing on the Nasdaq
Capital Market, and only permit them to list on the Nasdaq Global Select or Nasdaq Global Market in connection with a direct listing;
and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s
auditors.

As
a result of this scrutiny, criticism, and negative publicity, the traded stock of many U. S.-listed Chinese companies sharply decreased
in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC
enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide
scrutiny, criticism, and negative publicity will have on us, our offerings, our business, and our share price. If we become the subject
of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources
to investigate such allegations and/or defend our Company. This situation