Company: JWEL
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041556
Chunk: 135

Company: Jowell Global Ltd.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 19
Chunk 135
---
 to sell their products to the
Company’s online consumers.

A reorganization of the Company’s legal
structure (“ Reorganization”) was completed on November 1, 2019. The Reorganization involved the incorporation of Jowell Global,
a Cayman Islands holding company, the incorporation of Jowell Technology Limited (“ Jowell Tech”), a Hong Kong holding company;
the incorporation of Shanghai Jowell Technology Co., Ltd. (“ Shanghai Jowell”), a wholly foreign-owned entity (“ WFOE”)
of Jowell Tech under the laws of the People’s Republic of China (“ China” or the “ PRC”).

On October 31, 2019 and November 1, 2019, Shanghai
Jowell entered into a series of VIE Agreements with the shareholders of Shanghai Juhao Information Technology Co., Ltd. (“ Shanghai
Juhao”) and its shareholders, as amended on October 10, 2020. These agreements include: 1) an Exclusive Business Cooperation and
Management Agreement; 2) an Equity Interest Pledge Agreement, 3) an Exclusive Option Agreement; 4) Powers of Attorney and 5) Spousal Consent
Letters. Pursuant to these agreements, Shanghai Jowell has the exclusive rights to provide consulting services to Shanghai Juhao related
to the business operation and management of Shanghai Juhao. For such services, Shanghai Juhao agrees to pay service fees equal to all
of its net profit after tax payments to Shanghai Jowell. At the same time Shanghai Jowell has obligation to absorb all of the Shanghai
Juhao’s losses. Such contractual arrangements are designed so that the operations of Shanghai Juhao are solely for the benefit of
Shanghai Jowell and ultimately, the Company. The agreements remain in effect until and unless all parties agree to its termination, except
the Exclusive Option Agreement that the effective term of10years and can be renewed for an additional10years. Until such termination,
Shanghai Juhao may not enter into another agreement for the provision of management consulting services without the prior consent of Shanghai
Jowell. In essence, Shanghai Jowell is able to consolidate the financials of Shanghai Juhao. Therefore, Shanghai Juhao is considered a
Variable Interest Entity 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