# EDGAR Filing Document

**Accession Number:** 0001742518
**File Stem:** 0001213900-26-039499
**Filing Date:** 2026-4
**Character Count:** 513454
**Document Hash:** b1996bb945caa1a5bec0270e4ca42b4f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-039499.hdr.sgml**: 20260402

**ACCESSION NUMBER**: 0001213900-26-039499

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 93

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260402

**DATE AS OF CHANGE**: 20260402

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MMTEC, INC.
- **CENTRAL INDEX KEY:** 0001742518
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** D8
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38766
- **FILM NUMBER:** 26835369

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** ROOM 2302, 23RD FLOOR - FINANCIAL CENTER
- **STREET 2:** 308 CENTRAL DES VOEUX
- **CITY:** 308 DES VOEUX ROAD CENTRAL
- **NON US STATE TERRITORY:** SHEUNG WAN
- **PROVINCE COUNTRY:** K3
- **BUSINESS PHONE:** 85-236908356

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** ROOM 2302, 23RD FLOOR - FINANCIAL CENTER
- **STREET 2:** 308 CENTRAL DES VOEUX
- **CITY:** 308 DES VOEUX ROAD CENTRAL
- **NON US STATE TERRITORY:** SHEUNG WAN
- **PROVINCE COUNTRY:** K3

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MMTec, Inc.
- **DATE OF NAME CHANGE:** 20180601

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

(Mark one)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**For the fiscal year ended December 31, 2025**

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to ____________

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number 001-38766

**MMTEC, INC.**

(Exact name of Registrant as specified in its charter)

**<u>British Virgin Islands</u>**

(Jurisdiction of incorporation or organization)

**c/o MM Future Technology Limited** 

**Room 2302, 23rd Floor**

**308 Des Voeux Road Central**

**Sheung Wan, Hong Kong**

**Tel: +852 36908356**

(Address of principal executive offices)

**Xiangdong Wen, Chief Executive Officer**

**c/o MM Future Technology Limited**

**308 Des Voeux Road Central**

**Sheung Wan, Hong Kong**

**Tel: +852 36908356**

(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| **Common Shares, par value $0.08** | **MTC** | **The NASDAQ Stock Market LLC** |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act: **None.**

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: **None.**

On December 31, 2025, the issuer had 99,587,811 shares issued and outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

☐ Large Accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer

Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

☒ US GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No ☒

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **[PART I](#a_001)** |  |  |
| ITEM 1. | [IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#a_002) | 1 |
| ITEM 2. | [OFFER STATISTICS AND EXPECTED TIMETABLE](#a_003) | 1 |
| ITEM 3. | [KEY INFORMATION](#a_004) | 1 |
| ITEM 4. | [INFORMATION ON THE COMPANY](#a_005) | 29 |
| ITEM 4A. | [UNRESOLVED STAFF COMMENTS](#a_006) | 45 |
| ITEM 5. | [OPERATING AND FINANCIAL REVIEW AND PROSPECT](#a_007) | 45 |
| ITEM 6. | [DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#a_008) | 58 |
| ITEM 7. | [MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#a_009) | 64 |
| ITEM 8. | [FINANCIAL INFORMATION](#a_010) | 65 |
| ITEM 9. | [THE OFFER AND LISTING](#a_011) | 66 |
| ITEM 10. | [ADDITIONAL INFORMATION](#a_012) | 67 |
| ITEM 11. | [QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](#a_013) | 76 |
| ITEM 12. | [DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#a_014) | 76 |
| **[PART II](#a_015)** |  |  |
| ITEM 13. | [DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#a_016) | 77 |
| ITEM 14. | [MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#a_017) | 77 |
| ITEM 15. | [CONTROLS AND PROCEDURES](#a_018) | 77 |
| ITEM 16. | [RESERVED](#a_019) | 78 |
| ITEM 16A. | [AUDIT COMMITTEE FINANCIAL EXPERT.](#a_020) | 78 |
| ITEM 16B. | [CODE OF ETHICS.](#a_021) | 78 |
| ITEM 16C. | [PRINCIPAL ACCOUNTANT FEES AND SERVICES.](#a_022) | 79 |
| ITEM 16D. | [EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.](#a_023) | 79 |
| ITEM 16E. | [PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.](#a_024) | 79 |
| ITEM 16F. | [CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.](#a_025) | 79 |
| ITEM 16G. | [CORPORATE GOVERNANCE](#a_026) | 80 |
| ITEM 16H. | [MINE SAFETY DISCLOSURE](#a_027) | 80 |
| ITEM 16I. | [DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.](#a_028) | 80 |
| ITEM 16J. | [INSIDER TRADING POLICIES](#a_029) | 80 |
| ITEM 16K. | [CYBERSECURITY](#a_030) | 80 |
| **[PART III](#a_031)** |  |  |
| ITEM 17. | [FINANCIAL STATEMENTS](#a_032) | 82 |
| ITEM 18. | [FINANCIAL STATEMENTS](#a_033) | 82 |
| ITEM 19. | [EXHIBITS](#a_034) | 82 |

---

i

**CERTAIN INFORMATION**

Unless otherwise indicated, numerical figures included in this Annual Report on Form 20-F (the "Annual Report") have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

For the sake of clarity, this Annual Report follows the English naming convention of first name followed by last name, regardless of whether an individual's name is Chinese or English. Numerical figures included in this Annual Report have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. Certain market data and other statistical information contained in this Annual Report are based on information from independent industry organizations, publications, surveys and forecasts. Some market data and statistical information contained in this Annual Report are also based on management's estimates and calculations, which are derived from our review and interpretation of the independent sources listed above, our internal research and our knowledge of the PRC information technology industry. While we believe such information is reliable, we have not independently verified any third-party information and our internal data has not been verified by any independent source.

Except where the context otherwise requires and for purposes of this Annual Report only:

Depending on the context, the terms "we," "us," "our company," and "our" refer to MMTEC, INC., a BVI company, and its consolidated subsidiaries:

● MM Future Technology Ltd. ("MM Future"), a Hong Kong incorporated limited company.

● MM Fund Services Limited ("MM Fund"), a Cayman Islands incorporated limited company (dissolved effective as of June 30, 2025).

● MM Capital Management Limited ("MM Capital"), a Cayman Islands incorporated limited company.

● MM Fund SPC ("MM SPC"), a Cayman Islands incorporated segregated portfolio company (disposed on November 18, 2023).

● Gujia (Beijing) Technology Co., Ltd ("Gujia"), a PRC incorporated limited company.

● Meimei Zhengtong (Beijing) Technology Co., Ltd., a PRC incorporated entity (dissolved effective as of June 8, 2018).

● MMBD Trading Limited ("MMBD Trading"), a British Virgin Islands incorporated limited company.

● MM Global Securities, INC. ("MM Global"), a State of Illinois corporation.

● HC Securities (HK) Limited ("HC Securities"), formerly known as MM Global Capital Limited, a Hong Kong incorporated limited company.

● MMBD Investment Advisory Company Limited ("MMBD Advisory"), a State of New York corporation (disposed on November 18, 2023).

● Fundex SPC ("Fundex SPC"), a Cayman Islands incorporated segregated portfolio company (disposed on November 18, 2023).

● Haichuan Zhixin (Beijing) Technology Co., Ltd ("Haichuan Zhixin"), a PRC incorporated limited company (dissolved effective as of December 26, 2025).

● Alpha Mind Technology Limited ("Alpha Mind"), a British Virgin Islands incorporated limited company (disposed on December 28, 2023).

● HAI TEC INC. ("HAI TEC"), a British Virgin Islands incorporated limited company.

● HAI Capital Management Ltd ("Hai Capital"), a British Virgin Islands incorporated limited company.

● HC Investment Limited ("HC Investment"), a Hong Kong incorporated limited company.

● "common shares" refer to our common shares, $0.08 par value per share,

● "China" and "PRC" refer to the People's Republic of China, excluding, for the purposes of this report only, Macau, Taiwan and Hong Kong, and

● all references to "RMB," "yuan" and "Renminbi" are to the legal currency of China, and all references to "USD," "$", and "U.S. dollars" are to the legal currency of the United States.

ii

<u>Regulatory Considerations relating to our Operations in China</u>

MMTEC, our ultimate British Virgin Islands holding company, does not have any substantive operations other than indirectly holding the equity interest in our operating subsidiaries in China and other countries and regions. As of the date of this annual report, (i) the Company's business operations are carried out both inside and outside of China; and (ii) the Company does not maintain any variable interest entity structure or operate any data center in China. The Company, including its Hong Kong subsidiaries, may still be subject to PRC laws relating to, among others, data security and restrictions over foreign investments due to the complexity of the regulatory regime in China, and the recent statements and regulatory actions by the PRC government relating to data security may affect our business operations in China or even our ability to offer securities in the United States. Neither MMTEC nor any of our subsidiaries has obtained the approval from either the China Securities Regulatory Commission (the "CSRC") or the Cyberspace Administration of China (the "CAC") for any offering we may make, and MMTEC does not intend to obtain the approval from either the CSRC or the CAC in connection with any such offering, since the Company does not believe, based upon advice of our PRC counsel, Beijing Jindong Law Firm, that such approval is required under these circumstances or for the time being. There can be no assurance, however, that regulators in China will not take a contrary view or will not subsequently require us to undergo the approval procedures and subject us to penalties for non-compliance. If regulators in China take a contrary view, it could (a) have a significant negative impact on our ability to operate, (b) hinder our ability to offer securities to investors, and/or (c) cause the value of our securities to significantly decline or to become worthless. See "Item 3. Key Information—Risk Factors—Risks Related to Doing Business in China."

Recent statements and regulatory actions by the Chinese government have targeted those companies whose operations involves cross-border data security or anti-monopoly concerns.

With regard to data security, China promulgated several important laws recently. Among them, on June 10, 2021, China promulgated the PRC Data Security Law ("DSL"), which became effective on September 1, 2021. The legislative intent for this law mainly includes regulating data processing activities, ensuring data security, promoting data development and utilization, protecting the data-related legitimate rights and interests of individuals and organizations, and safeguarding national sovereignty, security and development interests. Article 36 provides that any Chinese entity that provides data to foreign judicial or law enforcement agencies (regardless of whether directly or through a foreign entity) without approval from the Chinese authority would likely be deemed to be in violation of DSL. In addition, pursuant to Article 2 of Measures for Cybersecurity Reviews (the "Measures"), the procurement of any network product or service by an operator of critical information infrastructure that affects or may affect national security shall be subjected to a cybersecurity review under the Measures. Pursuant to Article 35 of Cybersecurity Law of the PRC, where "critical information infrastructure operators" purchase network products and services, which may influence national security, the operators are required to be subjected to a cybersecurity review. Our subsidiaries provide market data services and fund management services and do not operate any critical information infrastructure. As a result we do not believe that these new legal requirements are applicable to our PRC or Hong Kong subsidiaries. However, the exact scope of the term "critical information infrastructure operator" remains unclear, so there can be no assurance that our subsidiaries will not be subjected to critical information infrastructure operator review in the future. Furthermore, in the event that any of our PRC or Hong Kong subsidiaries becomes an operator of critical information infrastructure in the future it may be subjected to the above-described regulation.

With regard to anti-monopoly, Article 3 of Anti-Monopoly Law of the People's Republic of China (the "Anti-Monopoly Law") prohibits "monopolistic practices," which include: a) the conclusion of monopoly agreements between operators; b) the abuse of dominant market position by operators; and c) concentration of undertakings which has or may have the effect of eliminating or restricting market competition. Also, according to Article 19 of the Anti-Monopoly Law, the operator(s) will be assumed to have a dominant market position if the following apply: a) an operator has 50% or higher market share in a relevant market; b) two operators have 66% or higher market share in a relevant market; c) three operators have 75% or higher market share in a relevant market. We believe that none of our subsidiaries in China (which, for the avoidance of doubt includes Hong Kong and Macau) has engaged in any monopolistic practices in China, and that recent statements and regulatory actions by the Chinese government do not impact our ability to conduct business, accept foreign investments, or list on a U.S. or other foreign stock exchange. However, there can be no assurance that regulators in China will not promulgate new laws and regulations or adopt new series of interpretations or regulatory actions which may require our Chinese or Hong Kong subsidiaries to meet new requirements on the issues mentioned above. See "Item 3. Key Information—Risk Factors —Risks Related to Doing Business in China."

In general, rules and regulations in China can change quickly with little advance notice, creating substantial uncertainty. Changes in the PRC legal system may adversely affect our business and operation. See "Item 3. Key Information—Risk Factors—Risks Related to Doing Business in China."

Cash transfers within our organization are effected by means of bank wires. For example, if a subsidiary needs a cash advance for working capital needs, management will decide which entity in our organization will loan the required cash to that subsidiary, and we will cause MMTEC or one of our subsidiaries to make the loan. All such loans are interest-free, unsecured and payable on demand. The proceeds of any such loan will be wired to the borrower subsidiary and will be recorded on our books as 'Inter-Company due.' Such loan amounts are eliminated in our consolidated financial statements. Cash transferred outside of our organization to satisfy our obligations to third parties are also effected via wire transfer. During the three years preceding the date of this Annual Report, there have been no distributions or dividends by any of our direct or indirectly held subsidiaries to MMTEC. During that same period MMTEC has not declared any dividends or made any distributions to its shareholders, including its U.S. investors, and we do not anticipate declaring a dividend in the foreseeable future. The enforceability and treatment of the intercompany agreements within our organization, including the intercompany loan agreements described above used in connection with intercompany cash transfers, have not been tested in court. No assets other than cash are transferred within our organization. See "Item 4. Information on the Company—Cash Transfers Within Our Organization" for further information.

iii

**FORWARD-LOOKING STATEMENTS**

This Annual Report contains "forward-looking statements" that represent our beliefs, projections and predictions about future events. All statements other than statements of historical fact are "forward-looking statements" including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management's beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as "may", "will", "should", "could", "would", "predicts", "potential", "continue", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar expressions, as well as statements in the future tense, identify forward-looking statements.

These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of the publicly available information with respect to the factors upon which our business strategy is based on the success of our business.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and management's belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, those factors discussed under the headings "Risk Factors", "Operating and Financial Review and Prospects," "Information on the Company" and elsewhere in this Annual Report.

This Annual Report should be read in conjunction with our audited financial statements and the accompanying notes thereto, which are included in Item 18 of this Annual Report.

iv

**PART I**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not required.

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not required.

**ITEM 3. KEY INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **[Reserved]** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Capitalization and Indebtedness** 

Not required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Reasons for the Offer and Use of Proceeds** 

Not required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Risk factors** 

*You should carefully consider the following risk factors, together with all of the other information included in this Annual Report. Investment in our securities involves a high degree of risk. You should carefully consider the risks described below together with all of the other information included in this Annual Report before making an investment decision. The risks and uncertainties described below represent our known material risks to our business. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, you may lose all or part of your investment.*

 

**Risks Related to Our Business and Industry**

***We have incurred substantial losses in recent periods and may incur losses in the future.***

We have incurred substantial losses in several recent periods as we have sought to expand our operations. We recorded net loss of approximately $56.1 million and $91.2 million for the years ended December 31, 2025 and 2024, respectively, and net income of approximately $45.5 million for the year ended December 31, 2023. Our net loss for the year ended December 31, 2025 was primarily attributable to the allowance for credit losses on notes receivable, loss on sale of notes receivable, and interest expense on convertible promissory notes. Our net loss for the year ended December 31, 2024 was primarily attributable to the allowance for credit losses on notes receivable. Our net income for the year ended December 31, 2023 was primarily attributable to Alpha Mind, a subsidiary we acquired in June 2023 and sold in December 2023. We may incur losses in future periods. If our future revenues do not increase sufficiently, or even if our future revenues increase but we are unable to manage our expenses, we may not achieve and maintain profitability in the future periods.

***Our ability to protect the confidential information of our users may be adversely affected by cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions.***

 ****

Our platform processes certain personal and other sensitive data from our users, which makes it an attractive target and potentially vulnerable to cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions. While we have taken steps to protect the confidential information that we have access to, our security measures could be breached. Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any accidental or willful security breaches or other unauthorized access to our platform could cause confidential user information to be stolen and used for criminal purposes. Security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our relationships with borrowers and investors could be severely damaged, we could incur significant liability and our business and operations could be adversely affected. In addition, we expect the secure transmission of confidential information over public networks to be a critical element of our operations. Our networks, those of our third-party service vendors, and associated clearing corporations, and our customers may be vulnerable to unauthorized access, computer viruses and other security problems. Persons who circumvent security measures could wrongfully use our information or cause interruptions or malfunctions in our operations, which could make our customers hesitant to use our electronic marketplaces. We may be required to expend significant resources to protect against the threat of security breaches or to alleviate problems, including reputational harm and litigation, caused by any breaches.

 ****

 **

***We may pursue strategic alliances, acquisitions or joint ventures, which could present unforeseen integration obstacles.***

 **

These acquisitions may be necessary in order for us to enter into or develop new product areas. Strategic alliances, acquisitions, and joint ventures involve a number of risks and present financial, managerial and operational challenges, including:

● potential disruption of our ongoing business and product development and distraction of management,

● difficulty retaining and integrating personnel and integrating financial and other systems,

● the necessity of hiring additional management and other critical personnel and integrating them into our current operations,

● increasing the scope, geographic diversity and complexity of our operations,

● potential dependence upon, and exposure to liability, losses or reputational damage relating to systems, controls and personnel that are not under our control,

● potential unfavorable reaction to our strategic alliance, acquisition or joint venture strategy by our customers,

● to the extent that we pursue business opportunities outside the U.S., exposure to political, economic, legal, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization, expropriation, price controls, capital controls, exchange controls and other restrictive governmental actions, as well as the outbreak of hostilities,

● conflicts or disagreements between any strategic alliance or joint venture partners and us, and

● exposure to additional liabilities of any acquired business, strategic alliance or joint venture.

As a result of these risks and challenges, we may not realize any anticipated benefits from strategic alliances, acquisitions or joint ventures, and such strategic alliances, acquisitions or joint ventures may in fact materially adversely affect our business, financial condition and results of operations.

***If we are unable to continue to identify and exploit new market opportunities, our future revenues may decline and as a result our business, financial condition and results of operations could be materially adversely affected.***

 ****

As more participants enter our markets, the resulting competition often leads to lower commissions. This may result in a decrease in future revenues in a particular market even if the volume of trades we handle in that market increases. We may not be able to attract new customers or successfully enter new markets. If we are unable to continue to identify and exploit new market opportunities on a timely and cost-effective basis, our future revenues may decline and as a result our business, financial condition and results of operations could be materially adversely affected.

***Our ability to retain our key employees and the ability of certain key employees to devote adequate time to us is critical to the success of our business, and failure to do so may adversely affect our future revenues and as a result could materially adversely affect our business, financial condition and results of operations.***

 ****

Our people are our most important resource and our success depends on the efforts and talent of our employees, including risk management, software engineering, financial and marketing personnel. We must retain the services of our key employees and strategically recruit and hire new talented employees to obtain customer transactions that generate substantially all our revenues. If any of our key employees, including Xiangdong Wen and Min Kong, were to join an existing competitor, form a competing company, or otherwise leave us, some of our customers could choose to use the services of that competitor or another competitor instead of our services, which could adversely affect our future revenues and as a result could materially adversely affect our business, financial condition and results of operations. Our future success depends on our continued ability to attract, develop, motivate and retain qualified and skilled employees. Competition for highly skilled technical, risk management and financial personnel is extremely intense. We may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure. Some of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. In addition, we invest significant time and expenses in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our services and our ability to serve borrowers and investors could diminish, resulting in a material adverse effect to our business.

***Difficult market conditions, economic conditions and geopolitical uncertainties could adversely affect our business in many ways by negatively impacting our future revenues in the financial markets in which we offer services, which could have a material adverse effect on our business, financial condition and results of operations.***

 ****

Difficult market conditions, economic conditions and geopolitical uncertainties have in the past adversely affected and may in the future adversely affect our business and profitability. Our business and financial services industry in general are directly affected by national and international economic and political conditions, broad trends in business and finance, the level and volatility of interest rates, changes in and uncertainty regarding tax laws and substantial fluctuations in the volume and price levels of securities transactions. The financial markets and the global financial services business are, by their nature, risky and volatile and are directly affected by many national and international factors that are beyond our control. Any one of these factors may cause a substantial decline in the U.S. and global financial services markets, resulting in reduced trading volume. These events could have a material adverse effect on our results and profitability. These factors include:

● economic and political conditions in China, the U.S., Europe and elsewhere in the world,

● concerns about terrorism, war and other armed hostilities,

● concerns over inflation and wavering institutional and consumer confidence levels,

● the availability of cash for investment by our dealer customers and their customers,

● the level and volatility of interest rates and foreign currency exchange rates,

● the level and volatility of trading in certain equity and commodity markets, and

● currency values.

In addition, any prolonged slowdown in the Chinese or global economy may have a negative impact on our business, results of operations and financial condition. Economic conditions in China are sensitive to global economic conditions. The global financial markets have experienced significant disruptions since 2008 and the United States, Europe and other economies have experienced periods of recession. The recovery from the lows of 2008 and 2009 has been uneven and there are new challenges, including the escalation of the European sovereign debt crisis from 2011 and the slowdown of China's economic growth since 2012 which may continue. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world's leading economies, including the United States and China. There have also been concerns about the economic effect of the tensions in the relationship between China and surrounding Asian countries. Adverse economic conditions could have negative adverse effects on our business and financial conditions. Additionally, continued turbulence in the international markets may adversely affect our ability to access the capital markets to meet liquidity needs.

***Employee misconduct or error could harm us by impairing our ability to attract and retain customers and subjecting us to significant legal liability and reputational harm; moreover, this type of misconduct is difficult to detect and deter and error is difficult to prevent.***

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Employee misconduct or error could subject us to financial losses and regulatory sanctions and could seriously harm our reputation and negatively affect our business. It is not always possible to deter employee misconduct, and the precautions taken to prevent and detect employee misconduct may not always be effective. Misconduct by employees could include engaging in improper or unauthorized transactions or activities, failing to properly supervise other employees, or improperly using confidential information. Employee errors, including mistakes in executing, recording or processing transactions for customers, could cause us to enter into transactions that customers may disavow and refuse to settle, which could expose us to the risk of material losses even if the errors are detected and the transactions are unwound or reversed. If our customers are not able to settle their transactions on a timely basis, the time in which employee errors are detected may be increased and our risk of material loss could be increased. The risk of employee error or miscommunication may be greater for products that are new or have non-standardized terms. It is not always possible to deter employee misconduct or error, and the precautions we take to detect and prevent this activity may not be effective in all cases.

***Financial services firms are highly regulated, and the increased regulatory scrutiny over the last several years may increase the risk of financial liability and reputational harm resulting from adverse regulatory actions.***

In April 2019, the Company acquired the remaining 75.1% of outstanding securities of MMBD Trading Ltd., a British Virgin Islands company ("MMBD"). The acquisition closed on October 18, 2019, following the receipt by the Company of requisite corporate and regulatory approvals, including, without limitation, FINRA CMA application approval, and the Company's Audit Committee's review and approval of the terms and provisions of this transaction involving related parties. Following and as a result of this acquisition, MMBD has become a wholly-owned subsidiary of the Company. On March 23, 2020, the Company acquired all outstanding securities of MMBD Investment Advisory Company Limited ("MMBD Advisory") for a consideration of $1,000. Prior to this transaction, all outstanding securities of MMBD Advisory were owned by Hinman Au, a director and 1.7% shareholder of the Company. MMBD Advisory was formed in January 2018 in the U.S. and was registered as an investment advisor firm under the laws of the State of New York on May 7, 2018. Over the last several years, financial services firms have been operating in an evolving regulatory environment. The industry has experienced an extended period of significant change in laws and regulations governing the financial services industry, as well as increased scrutiny from various regulators. Penalties and fines imposed by regulatory authorities have increased substantially in recent years. We may be adversely affected by changes in the interpretation or enforcement of existing laws, rules, and regulations. There is also increased regulatory scrutiny (and related compliance costs) as we continue to grow and surpass certain consolidated asset thresholds established under the Dodd-Frank Act, which have the effect of imposing enhanced standards and requirements on larger institutions. Broker-dealers and investment advisers are subject to regulations covering all aspects of the securities business, including, but not limited to: sales and trading methods; trade practices among broker-dealers; use and safekeeping of clients' funds and securities; capital structure of securities firms; anti-money laundering efforts; recordkeeping; and the conduct of directors, officers and employees. Any violation of these laws or regulations could subject us to the following events, any of which could have a material adverse effect on our business, financial condition and prospects: civil and criminal liability; sanctions, which could include the revocation of our subsidiaries' registrations as investment advisers or broker-dealers; the revocation of the licenses of our financial advisors; censures; fines; or a temporary suspension or permanent bar from conducting business. Failure to comply with regulatory capital requirements primarily applicable to our company, our bank subsidiaries, or our broker-dealer subsidiaries would significantly harm our business.

***Growth of our business could increase costs and regulatory and integration risks***

Integrating acquired businesses, providing a platform for new businesses, and partnering with other firms involve risks and present financial, managerial, and operational challenges. We may incur significant expense in connection with expanding our existing businesses, recruiting financial advisors, or making strategic acquisitions or investments. Our overall profitability would be negatively affected if investments and expenses associated with such growth are not matched or exceeded by the revenues derived from such investments or growth. Expansion may also create a need for additional compliance, documentation, risk management, and internal control procedures, and often involves hiring additional personnel to address these procedures. To the extent such procedures are not adequate or not adhered to with respect to our expanded business or any new business, we could be exposed to a material loss or regulatory sanction. Financial services firms are subject to numerous actual or perceived conflicts of interest, which are routinely examined by U.S. federal and state regulators and SROs such as FINRA. Our risk management processes include addressing potential conflicts of interest that arise in our business. Management of potential conflicts of interest has become increasingly complex as we expand our business activities. A perceived or actual failure to address conflicts of interest adequately could affect our reputation, the willingness of clients to transact business with us or give rise to litigation or regulatory actions. Therefore, there can be no assurance that conflicts of interest will not arise in the future that could cause result in material harm to our business and financial condition.

***We are generally subject to risks inherent in doing business in the financial markets, and any failure to develop effective compliance and reporting systems could result in regulatory penalties in the applicable jurisdiction and our business could be adversely affected.***

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There are certain additional political, economic, legal, regulatory, operational and other risks inherent in doing business in international financial markets. These risks include:

● less developed automation in exchanges, depositories and national clearing systems,

● additional or unexpected changes in regulatory and capital requirements,

● the impact of the laws and regulations of foreign governmental and regulatory authorities of each country in which we conduct business,

● possible nationalization, expropriation and regulatory, political and price controls,

● difficulties in staffing and managing international operations,

● capital controls and other restrictive governmental actions,

● any failure to develop effective compliance and reporting systems, which could result in regulatory penalties in the applicable jurisdiction,

● fluctuations in currency exchange rates,

● reduced protections for intellectual property rights,

● adverse labor laws,

● outbreak of hostilities, and

● potentially adverse tax consequences arising from compliance with foreign laws and regulations to which our international subsidiaries are subject.

In many countries, the laws and regulations applicable to the securities and financial services industries are uncertain and evolving, and it may be difficult for us to determine the exact requirements of local laws in every market. Our inability to remain in compliance with local laws and regulations in a particular foreign market could have a significant and negative effect not only on our businesses in that market but also on our reputation generally. If we are unable to manage any of these risks effectively, our business could be adversely affected.

***If the value of the U.S. dollar against RMB in which we pay expenses continues to decline or if the value of the U.S. dollar against RMB in which we earn revenues improves dramatically, our financial results could suffer.***

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Significant exchange rate fluctuations can impact our results. Significant movements in the U.S. dollar against RMB, in which we pay expenses or earn profits may have an adverse effect on our financial results. Potential movements in the U.S. dollar against RMB in which we earn revenues could also adversely affect our financial results.

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***We may not be able to obtain additional financing, if needed, on terms that are acceptable, which could prevent us from developing or enhancing our business, taking advantage of future opportunities or responding to competitive pressure or unanticipated requirements.***

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Our business is dependent upon the availability of adequate funding and sufficient capital. If for any reason we need to raise additional funds, we may not be able to obtain additional financing when needed. If we cannot raise additional funds on acceptable terms, we may not be able to develop or enhance our business, take advantage of future opportunities or respond to competitive pressure or unanticipated requirements.

***We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business.***

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Our success is dependent, in part, upon our intellectual property. We generally rely primarily on trade secret, contract, copyright and trademark laws to establish and protect our rights to our proprietary technology, methods and products. It is possible that third parties may copy or otherwise obtain and use our proprietary technology without authorization or otherwise infringe on our rights. We cannot assure you that any of the rights granted under any patent, copyright or trademark that we may obtain will protect our competitive advantages. In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as the laws in the U.S. We may also face claims of infringement that could interfere with our ability to use technology that is material to our business operations. This may limit the comprehensiveness and quality of the data we are able to distribute or sell. In the future, we may have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity. Any such claims or litigation, whether successful or unsuccessful, could result in substantial costs and the diversion of resources and the attention of management, any of which could negatively affect our business. Responding to these claims could also require us to enter into royalty or licensing agreements with the third parties claiming infringement. Such royalty or licensing agreements, if available, may not be available on terms acceptable to us.

***We may experience technology failures while developing and enhancing our software.***

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In order to maintain our competitive advantage, our software is under continuous development. There is risk that software failures may occur and result in service interruptions and have other unintended consequences, which could have a material adverse effect on our business, financial condition and results of operations**.**

***Our operations depend on the performance of the Internet infrastructure and fixed telecommunications networks in China.***

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Almost all access to the Internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT. We primarily rely on a limited number of telecommunication service providers to provide us with data communications capacity through local telecommunications lines and Internet data centers to host our servers. We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China's Internet infrastructure or the fixed telecommunications networks provided by telecommunication service providers. With the expansion of our business, we may be required to upgrade our technology and infrastructure to keep up with the increasing traffic on our platform. We cannot assure you that the Internet infrastructure and the fixed telecommunications networks in China will be able to support the demands associated with the continued growth in Internet usage. In addition, we have no control over the costs of the services provided by telecommunication service providers. If the prices we pay for telecommunications and Internet services rise significantly, our results of operations may be adversely affected. Furthermore, if Internet access fees or other charges to Internet users increase, our user traffic may decline, and our business may be harmed.

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***Any significant disruption in service on our platform or in our computer systems, including events beyond our control, could prevent us from processing or posting transactions on our platform, reduce the attractiveness of our platform and result in a loss of borrowers or investors.***

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In the event of a platform outage and physical data loss, our ability to perform our servicing obligations, process applications or make trades available on our platform would be materially and adversely affected. The satisfactory performance, reliability and availability of our platform and our underlying network infrastructure are critical to our operations, customer service, reputation and our ability to retain existing and attract new borrowers and investors. Our operations depend on our ability to protect our systems against damage or interruption from natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses or attempts to harm our systems, criminal acts and similar events. If there is a lapse in service or damage to our facilities, we could experience interruptions in our service as well as delays and additional expense in arranging new facilities. Any interruptions or delays in our service, whether as a result of third-party error, our error, natural disasters or security breaches, whether accidental or willful, could harm our relationships with our borrowers and investors and our reputation. Additionally, in the event of damage or interruption, our insurance policies currently in place may not adequately compensate us for any losses that we may incur.

***Our platform and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.***

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Our platform and internal systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now or in the future contain, undetected errors or bugs. Some errors may only be discovered after the code has been released for external or internal use. Errors or other design defects within the software on which we rely may result in a negative experience for our users, delay introductions of new features or enhancements, result in errors or compromise our ability to protect user data or our intellectual property. Any errors, bugs or defects discovered in the software on which we rely could result in harm to our reputation, loss of user or liability for damages, any of which could adversely affect our business, results of operations and financial conditions.

***The financial markets in which we operate are generally affected by seasonality which could have a material adverse effect on our financial performance in a given period.***

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Traditionally, the financial markets around the world experience lower volume during the summer and at the end of the year due to a general slowdown in the business environment and, therefore, our transaction volume levels may decrease during those periods. The timing of the holidays also affects transaction volume. These factors could have a material adverse effect on our financial performance in a given period.

***We operate in a rapidly evolving business environment. If we are unable to adapt our business effectively to keep pace with these changes, our ability to succeed will be adversely affected, which could have a material adverse effect on our business, financial condition and results of operations.***

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The pace of change in our industry is extremely rapid. Operating in such a rapidly changing business environment involves a high degree of risk. Our ability to succeed will depend on our ability to adapt effectively to these changing market conditions. If we are unable to keep up with rapid technological changes, we may not be able to compete effectively. To remain competitive, we must continue to enhance and improve the responsiveness, functionality, accessibility and features of our proprietary software, network distribution systems and technologies. Our business environment is characterized by rapid technological changes, changes in use and customer requirements and preferences, frequent product and service introductions embodying new technologies and the emergence of new industry standards and practices that could render our existing proprietary technology and systems obsolete. Our success will depend, in part, on our ability to:

● develop, license and defend intellectual property useful in our business,

● enhance our existing services,

● develop new services and technologies that address the increasingly sophisticated and varied needs of our prospective customers,

● respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis,

● respond to the demand for new services, products and technologies on a cost-effective and timely basis, and

● adapt to technological advancements and changing standards to address the increasingly sophisticated requirements and varied needs of our prospective customers.

We cannot assure you that we will be able to respond in a timely manner to changing market conditions or customer requirements. The development of proprietary electronic trading technology entails significant technical, financial and business risks. Further, the adoption of new Internet, networking or telecommunications technologies may require us to devote substantial resources to modify, adapt and defend our technology. We cannot assure you that we will successfully implement new technologies or adapt our proprietary technology and transaction-processing systems to customer requirements or emerging industry standards, or that we will be able to successfully defend any challenges to any technology we develop. Any failure on our part to anticipate or respond adequately to technological advancements, customer requirements or changing industry standards, or any significant delays in the development, introduction or availability of new services, products or enhancements, could have a material adverse effect on our business, financial condition and results of operations.

***Lack of liquidity or access to capital could impair our business and financial condition.***

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Liquidity, or ready access to funds, is essential to our business. We expend significant resources investing in our business, particularly with respect to our technology and service platforms. As a result, reduced levels of liquidity could have a significant negative effect on us. Some potential conditions that could negatively affect our liquidity include:

● illiquid or volatile markets,

● diminished access to debt or capital markets,

● unforeseen cash or capital requirements, or

● regulatory penalties or fines, or adverse legal settlements or judgments.

The capital and credit markets continue to experience varying degrees of volatility and disruption. In some cases, the markets have exerted downward pressure on availability of liquidity and credit capacity for businesses similar to ours. Without sufficient liquidity, we could be required to limit or curtail our operations or growth plans, and our business would suffer. Notwithstanding the self-funding nature of our operations, we may sometimes be required to fund timing differences arising from the delayed receipt of client funds associated with the settlement of client transactions in securities markets. These timing differences are funded either with internally generated cash flow or, if needed, with funds drawn under our revolving credit facility. We may also need access to capital in connection with the growth of our business, through acquisitions or otherwise. In the event current resources are insufficient to satisfy our needs, we may need to rely on financing sources such as bank debt. The availability of additional financing will depend on a variety of factors such as:

● market conditions,

● the general availability of credit,

● the volume of trading activities,

● the overall availability of credit to the financial services industry,

● our credit ratings and credit capacity, and

● the possibility that our lenders could develop a negative perception of our long- or short-term financial prospects as a result of industry- or company-specific considerations. Similarly, our access to funds may be impaired if regulatory authorities or rating organizations take negative actions against us.

Disruptions, uncertainty or volatility in the capital and credit markets may also limit our access to capital required to operate our business. Such market conditions may limit our ability to satisfy statutory capital requirements, generate commission, fee and other market-related revenue to meet liquidity needs and access the capital necessary to grow our business. As such, we may be forced to delay raising capital, issue different types of capital than we would otherwise, less effectively deploy such capital, or bear an unattractive cost of capital, which could decrease our profitability and significantly reduce our financial flexibility.

***Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments.***

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We may pursue further acquisitions and investments in the future. These transactions are accompanied by risks. For instance, an acquisition could have a negative effect on our financial and strategic position and reputation or the acquired business could fail to further our strategic goals. Moreover, we may not be able to successfully integrate acquired businesses into ours, and therefore we may not be able to realize the intended benefits from an acquisition. We may have a lack of experience in new markets, products or technologies brought on by the acquisition and we may have an initial dependence on unfamiliar supply or distribution partners. An acquisition may create an impairment of relationships with customers or suppliers of the acquired business or our advisors or suppliers. All of these and other potential risks may serve as a diversion of our management's attention from other business concerns, and any of these factors could have a material adverse effect on our business.

***We operate in an intensely competitive industry, which could cause us to lose advisors and their assets.***

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Many of our competitors have substantially greater resources than we do and may offer a broader range of products and services across more markets. Some operate in a different regulatory environment than we do, which may give them certain competitive advantages in the services they offer. For example, certain of our competitors only provide clearing services and consequently would not have any supervision or oversight liability relating to actions of their financial advisors. We believe that competition within our industry will intensify as a result of consolidation and acquisition activity and because new competitors face few barriers to entry, which could adversely affect our ability to recruit new advisors and retain existing advisors. If current or potential clients decide to use our competitors, we could face a significant decline in market share, future fee revenues and future net income.

***We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.***

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We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how or other intellectual property rights held by third parties. We may be from time to time in the future subject to legal proceedings and claims relating to the intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights, know-how or other intellectual property rights that are infringed by our products, services or other aspects of our business without our awareness. Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in China, the United States or other jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management's time and other resources from our business and operations to defend against these claims, regardless of their merits. Additionally, the application and interpretation of China's intellectual property right laws and the procedures and standards for granting trademarks, patents, copyrights, know-how or other intellectual property rights in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory authorities would agree with our analysis. If we were found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own. As a result, our business and results of operations may be materially and adversely affected.

***Increases in labor costs in the PRC may adversely affect our business and results of operations.***

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The economy in China has experienced increases in inflation and labor costs in recent years. As a result, average wages in the PRC are expected to continue to increase. In addition, we are required by PRC laws and regulations to pay various statutory employee benefits, including pension, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee benefits, and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to control our labor costs or pass on these increased labor costs to our users by increasing the fees of our services, our financial condition and results of operations may be adversely affected.

***The laws and regulations governing the financial industry in China are developing and evolving rapidly. If any of our business practices is deemed to violate any PRC laws or regulations, our business, financial condition and results of operations would be materially and adversely affected.***

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Due to the relatively short history of the finance industry in China, the PRC government has yet to establish a comprehensive regulatory framework governing our industry. To comply with existing laws, regulations, rules and governmental policies relating to the online finance industry, we have implemented various policies and procedures to conduct our business and operations. However, due to the lack of detailed rules and the fact that the relevant laws, regulations and rules are expected to continue to evolve, we cannot be certain that our existing practices would not be deemed to violate any existing or future rules, laws and regulations. As of the date of this report, we have never been subject to any material fines or other penalties under any PRC laws or regulations, including those governing our industry in China. However, to the extent that we are not able to fully comply with any existing or new regulations when they are promulgated, our business, financial condition and results of operations may be materially and adversely affected. We are unable to predict with certainty the impact, if any, that future legislation, judicial precedents or regulations relating to the online consumer finance industry will have on our business, financial condition and results of operations. Furthermore, the growth in the popularity of online consumer finance increases the likelihood that the PRC government will seek to further regulate this industry.

***Our operations may be adversely affected by international communication failures, which may affect trade executions and data updates.***

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Any significant disruption in service on our platforms, our computer systems or third-party service providers' systems, including events beyond our control, could reduce the attractiveness of our platforms and result in a loss of customers or investors. In the event of a platform outage and physical data loss, our ability to perform our servicing obligations, and process loan applications would be materially and adversely affected. The satisfactory performance, reliability and availability of our platforms and our underlying network infrastructure are critical to our operations, customer service, reputation, and ability to retain existing and attract new customers, investors and institutional funding partners. Our operations depend on our ability to protect our systems against damage or interruption from natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses, or attempts to harm our systems, criminal acts and similar events. Any interruptions or delays in our service, whether as a result of third-party or our error, natural disasters or security breaches, whether accidental or willful, could harm our relationships with our customers, investors and institutional funding partners and our reputation. Our disaster recovery plan has not been tested under actual disaster conditions, and we may not have sufficient capacity to recover all data and services in the event of an outage. These factors could prevent us from processing loans, damage our brand and reputation, divert our employees' attention, subject us to liability and cause customers, investors and institutional funding partners to abandon our platforms, any of which could adversely affect our business, financial condition and results of operations.

***Our platforms and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.***

Our platforms and internal systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now or in the future contain, undetected errors or bugs. Errors or other design defects within the software on which we rely may result in a negative experience for customers and funding sources, delay introductions of new features or enhancements, result in errors or compromise our ability to protect customer or investor data or our intellectual property. Any errors, bugs or defects discovered in the software on which we rely could result in harm to our reputation, loss of customers or investors or liability for damages, any of which could adversely affect our business, results of operations and financial condition.

***Uncertainties relating to the growth and profitability of the e-commerce industry in China could adversely affect our operating revenue and business prospects.***

Our future results of operations will depend on numerous factors affecting the development of the e-commerce industry in China, which may be beyond our control. These factors include:

● the growth of Internet, broadband, personal computer and mobile penetration and usage in China, and the rate of any such growth,

● the level of trust and confidence of Chinese consumers in online trading, as well as changes in investor demographics and investor tastes and preferences,

● whether alternative lending channels or business models that better address the needs of investor emerge in China, and

● the development of fulfillment, payment and other ancillary services associated with online purchases.

Unfavorable developments in domestic and international politics, including military conflicts, political turmoil and social instability, may also adversely affect investor confidence and reduce investments, which could in turn materially and adversely affect our growth and profitability.

***Any negative publicity or investor complaints with respect to us, investor and our service providers may materially and adversely affect our business and results of operations.***

The reputation of our brands is critical to our business and competitiveness. Any malicious or negative publicity or any publicized incidents in connection with the use of our services, whether or not we are negligent or at fault, including but not limited to those relating to our management, business, compliance with the law, financial conditions or prospects, whether with or without merit, could severely compromise our reputation and harm our business and operating results.

As China's online investing industry is new and the regulatory framework for this industry is also evolving, negative publicity about this industry and the market segment in which we operate may arise from time to time. Negative publicity about China's online investing industry in general may also have a negative impact on our reputation, regardless of whether or not we have engaged in any inappropriate activities. The PRC government has recently instituted specific rules, including the Guidelines, Interim Measures and the CBRC Circular 26, to develop a more transparent regulatory environment for the online consumer finance industry. Any players in China's online consumer finance industry who are not in compliance with these regulations may adversely impact the reputation of the industry as a whole. Furthermore, any negative development or perception of the consumer finance industry as a whole, including campus lending, even if factually incorrect or based on isolated incidents or as result of conduct by other market players, could compromise our image, undermine our trust and credibility, and negatively impact our ability to attract new customers, investors and institutional funding partners. Negative developments in the consumer finance industry, such as widespread customer defaults, fraudulent behavior, the closure of other online consumer finance platforms, or incidents indirectly resulting from the accumulation of large amounts of debt and inability to repay by any particular customer, may also lead to tightened regulatory scrutiny of the sector and limit the scope of permissible business activities that may be conducted by market players in the consumer finance industry. For instance, since 2015, there has been a number of reports of business failures of, or accusations of fraud and unfair dealing against, certain companies in the consumer finance industry in China. If customers, investors or institutional funding partners associate our company with these companies, they may be less willing to engage in borrowing or funding activities on our platform. If any of the foregoing takes place, our business and results of operations could be materially and adversely affected.

***Our business is dependent on our ability to maintain relationships with our business partners and other third parties, and at the same time, we are subject to risks associated with our business partners and other third parties.***

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We currently rely on a number of business partners and other third parties in various aspects of our business. In addition, we cooperate with a number of business partners and other third parties to deliver our services to our customers. Furthermore, if third-party service providers fail to function properly, we cannot assure you that we would be able to find an alternative in a timely and cost-efficient manner, or at all. Pursuing, establishing and maintaining relationships with business partners and other third parties, as well as integrating their data and services with our system, require significant time and resources.

The smooth operation of our business also depends on the compliance by our business partners and other third parties with applicable laws and regulations. Any negative publicity about business partners and other third parties, such as negative publicity about their loan collection practices and any failure by them to adequately protect the information of our customers and investors, to comply with applicable laws and regulations or to otherwise meet required quality and service standards, could harm our reputation. If any of the foregoing were to occur, our business and results of operations could be materially and adversely affected. Our reputation is associated with these business partners and other third parties, and if any of the foregoing were to occur, our reputation may suffer.

***Any lack of requisite approvals, licenses or permits applicable to our business may have a material and adverse impact on our business, financial condition and results of operations.***

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Our business is subject to governmental supervision and regulation by the relevant PRC governmental authorities. Together, these government authorities promulgate and enforce regulations that cover many aspects of the operation of the online retail and the online finance industries. The PRC government extensively regulates the Internet industry. As a result, in certain circumstances it may be difficult to determine what actions or omissions may be deemed to be in violation of applicable laws and regulations.

We have made efforts to obtain all the applicable licenses and permits. We cannot assure you that we have obtained all the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain new ones. If the PRC government determines that we are operating without the proper approvals, licenses or permits or promulgates new laws and regulations that require additional approvals or licenses or imposes additional restrictions on the operation of any part of our business, it has the power, among other things, to levy fines, confiscate our income, revoke our business licenses, and require us to discontinue the relevant parts of our business or to impose restrictions on the affected portion of our business. Any of these actions by the PRC government may have a material adverse effect on our business and results of operations.

***We may be deemed to be a transient investment company.***

We are not engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in those activities. However, under the Investment Company Act of 1940, as amended, a company may be deemed an investment company under Section 3(a)(1)(C) of the Investment Company Act if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis.

In connection with the sale of Alpha Mind to XChange TEC.INC (formerly known as "FLJ Group Limited") ("XChange"), we were issued a Secured Promissory Note in the amount of $153 million (the "XChange Note"). As of the date of this report, we have received repayment from XChange of approximately $9.14 million, and sold $51,988,242 of the outstanding amount, of which the unpaid principal is $50,000,000 and unpaid interest is $1,988,242, to a third party. The maturity date of the XChange Note was extended to December 31, 2025, with a provision that if any balance remains outstanding on that date, it will automatically extend to the end of the following year, pursuant to the Amendments to Secured Promissory Notes entered into by the Company and XChange dated June 30, 2025. The XChange Note is convertible into shares of XChange if the remaining balance of approximately of $93.86 million of the XChange Note is not paid in full by the maturity date. Since we do not hold a controlling interest in XChange, the XChange Note and the XChange shares underlying the XChange Note could be deemed under the Investment Company Act to exceed 40% of our total assets, exclusive of government securities cash items and on an unconsolidated basis, and accordingly, we may be deemed to be a transient investment company.

A transient investment company can avoid being classified as an investment company if it can rely on one of the exclusions under the Investment Company Act. One such exclusion, Rule 3a-2 under the Investment Company Act, allows a transient investment company a grace period of one year from the earlier of (a) the date on which an issuer owns securities and/or cash having a value exceeding 50% of the issuer's total assets on either a consolidated or unconsolidated basis and (b) the date on which an issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer's total assets (exclusive of government securities and cash items) on an unconsolidated basis.

In the event we are deemed to be a transient investment company as a result of the XChange Note, we believe we would qualify for the grace period. We may take actions to cause any investment securities held by us to be less than 40% of our total assets, which may include acquiring assets, engaging in one or more strategic transactions or liquidating our investment securities.

As Rule 3a-2 is available to a company no more than once every three years, and assuming no other exclusion were available to us, we would have to keep within the 40% limit for at least three years after we cease being a transient investment company. This may limit our ability to make certain investments or enter into joint ventures that could otherwise have a positive impact on our earnings. In any event, we do not intend to become an investment company engaged in the business of investing and trading securities.

Classification as an investment company under the Investment Company Act requires registration with the Securities and Exchange Commission ("SEC"). If an investment company fails to register, it would have to stop doing almost all business, and its contracts would become voidable. Registration is time consuming and restrictive and would require a restructuring of our operations, and we would be very constrained in the kind of business we could do as a registered investment company. Further, we would become subject to substantial regulation concerning management, operations, transactions with affiliated persons and portfolio composition, and would need to file reports under the Investment Company Act regime. The cost of such compliance would result in our incurring substantial additional expenses, and the failure to register if required would have a materially adverse impact on our ability to conduct our operations.

***The XChange Note is subject to collection risk due to XChange's going concern uncertainty, which may result in impairment of the XChange Note or receipt of XChange shares with limited value.***

The XChange Note has an outstanding principal balance of approximately $93.86 million as of the date of this report. The XChange Note is secured by all of the issued and outstanding equity of Alpha Mind and all of the assets of Alpha Mind and its subsidiaries. In its Annual Report on Form 20-F for the fiscal year ended September 30, 2025, XChange disclosed that its independent registered public accounting firm included an explanatory paragraph in its audit report questioning XChange's ability to continue as a going concern.

XChange reported that it generated net losses of RMB 71.3 million, RMB 226.8 million, and RMB 748.4 million (approximately $105.1 million) in fiscal years 2023, 2024, and 2025, respectively, and had an accumulated deficit of RMB 4,605.2 million (approximately $646.9 million) as of September 30, 2025. XChange further reported that its current liabilities exceeded its current assets by RMB 909.3 million as of September 30, 2025. XChange's auditors noted that these factors, among others, raise substantial doubt about XChange's ability to continue as a going concern.

XChange has disclosed that it intends to repay the XChange Note using cash flows generated by its operations or through debt or equity offerings or loans, but that it may not be able to obtain financing or fundraising on favorable terms or at all. If XChange fails to perform its payment obligations under the XChange Note, we may exercise our collateral rights with respect to the equity and assets of Alpha Mind. However, there can be no assurance that the value of such collateral will be sufficient to satisfy the amounts owed under the XChange Note. Alpha Mind operates through contractual arrangements with variable interest entities (VIEs) in China, and the enforceability of such arrangements and the ability to realize value from the collateral may be subject to significant legal and regulatory uncertainties in China.

If XChange is unable to continue as a going concern or if the value of the collateral securing the XChange Note declines, we may be required to record an impairment of the XChange Note and may not recover the full amount owed to us. Additionally, if we convert the XChange Note into shares of XChange in accordance with our conversion rights, the value of such shares may be limited or may decline substantially due to XChange's financial difficulties. Any impairment of the XChange Note or decline in the value of XChange shares we receive could have a material adverse effect on our financial condition and results of operations.

**Risks Relating to Our Corporate Structure**

***We will likely not pay dividends in the foreseeable future.***

Dividend policy is subject to the discretion of our Board of Directors and will depend on, among other things, our earnings, financial condition, capital requirements and other factors. There is no assurance that our Board of Directors will declare dividends even if we are profitable. The payment of dividends by entities organized in China is subject to limitations as described herein. Under BVI law, we may only pay dividends from profits of our company, or credits standing in our Company's share premium account, and we must be solvent before and after the dividend payment in the sense that we will be able to satisfy our liabilities as they become due in the ordinary course of business; and the realizable value of assets of our Company will not be less than the sum of our total liabilities, other than deferred taxes as shown on our books of account, and our capital. Pursuant to the Chinese enterprise income tax law, dividends payable by a foreign investment entity to its foreign investors are subject to a withholding tax of 10%. Similarly, dividends payable by a foreign investment entity to its Hong Kong investor who owns 25% or more of the equity of the foreign investment entity is subject to a withholding tax of 5%. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in China currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. The transfer to this reserve must be made before distribution of any dividend to shareholders.

***Our business may be materially and adversely affected if any of our Chinese subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding.***

The Enterprise Bankruptcy Law of China provides that an enterprise may be liquidated if the enterprise fails to settle its debts as and when they fall due and if the enterprise's assets are, or are demonstrably, insufficient to clear such debts. Our Chinese subsidiaries hold certain assets that are important to our business operations. If any of our Chinese subsidiaries undergoes a voluntary or involuntary liquidation proceeding, unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.

***Wholly Owned Foreign Entity (WOFE) is required to allocate a portion of its after-tax profits, to the statutory reserve fund, and as determined by its Board of Directors, to the staff welfare and bonus funds, which may not be distributed to equity owners.***

Pursuant to Company Law of P.R. China (2013 Revision), Wholly Foreign-Owned Enterprise Law of the P.R. China (2000 Revision) and Implementing Rules for the Law of the People's Republic of China on Wholly Foreign Owned Enterprises (2014 Revision), our WOFE entity is required to allocate a portion of its after-tax profits, to the statutory reserve fund, and in its discretion, to the staff welfare and bonus funds. No lower than 10% of an enterprise's after tax-profits should be allocated to the statutory reserve fund. When the statutory reserve fund account balance is equal to or greater than 50% of the WOFE's registered capital, no further allocation to the statutory reserve fund account is required. WOFE determines, in its own discretion, the amount contributed to the staff welfare and bonus funds. These reserves represent appropriations of retained earnings determined according to Chinese law.

***Our failure to obtain prior approval of the China Securities Regulatory Commission for the listing and trading of our common shares on a foreign stock exchange could have a material adverse effect upon our business, operating results, reputation and trading price of our common shares.***

On August 8, 2006, six Chinese regulatory agencies, including the Ministry of Commerce of the People's Republic of China ("MOFCOM"), jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "M&A Rule"), which was amended on June 22, 2009. The M&A Rule contains provisions that require that an offshore special purpose vehicle ("SPV") formed for listing purposes and controlled directly or indirectly by Chinese companies or individuals shall obtain the approval of the CSRC prior to the listing and trading of such SPV's securities on an overseas stock exchange. On September 21, 2006, the CSRC published procedures specifying documents and materials required to be submitted to it by an SPV seeking CSRC approval of overseas listings. However, the application of the M&A Rule remains unclear with no consensus currently existing among leading Chinese law firms regarding the scope and applicability of the CSRC approval requirement. The CSRC has not issued any such definitive rule or interpretation, and we have not chosen to voluntarily request approval under the M&A Rule.

***If we fail to maintain continuing compliance with the PRC state regulatory rules, policies and procedures applicable to our industry, we may risk losing certain preferential tax and other treatments which may adversely affect the viability of our current corporate structure, corporate governance and business operations.***

According to the Guidelines on Foreign Investment issued by the State Council in 2002 and the Catalog on Foreign Invested Industries (2017 Revision) issued by the National Development and Reform Commission and MOFCOM, IT services fall into the category of industries in which foreign investment is encouraged. The State Council has promulgated several notices since 2000 to launch favorable policies for IT services, such as preferential tax treatments and credit support. Under rules and regulations promulgated by various Chinese government agencies, enterprises that have met specified criteria and are recognized as software enterprises by the relevant government authorities in China are entitled to preferential treatment, including financing support, preferential tax rates, export incentives, discretion and flexibility in determining employees' welfare benefits and remuneration. Software enterprise qualifications are subject to annual examination. Enterprises that fail to meet the annual examination standards will lose the favorable enterprise income tax treatment. Enterprises exporting software or producing software products that are registered with the relevant government authorities are also entitled to preferential treatment including governmental financial support, preferential import, export policies and preferential tax rates. If and to the extent we fail to maintain compliance with such applicable rules and regulations, our operations and financial results may be adversely affected.

**Risks Related to Doing Business in China**

***Adverse changes in political, economic and other policies of the Chinese government could have a material adverse effect on the overall economic growth of China, which could materially and adversely affect the growth of our business and our competitive position.***

Our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. Although the PRC economy has been transitioning from a planned economy to a more market-oriented economy since the late 1970s, the PRC government continues to exercise significant control over China's economic growth through direct allocation of resources, monetary and tax policies, and a host of other government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between the Renminbi and foreign currencies, and regulate the growth of the general or specific market. While the Chinese economy has experienced significant growth in the past 30 years, growth has been uneven, both geographically and among various sectors of the economy. Furthermore, the current global economic crisis is adversely affecting economies throughout the world. As the PRC economy has become increasingly linked with the global economy, China is affected in various respects by downturns and recessions of major economies around the world. The various economic and policy measures enacted by the PRC government to forestall economic downturns or bolster China's economic growth could materially affect our business. Any adverse change in the economic conditions in China, in policies of the PRC government or in laws and regulations in China could have a material adverse effect on the overall economic growth of China and market demand for our outsourcing services. Such developments could adversely affect our businesses, lead to reduction in demand for our services and adversely affect our competitive position.

***Uncertainties with respect to the PRC legal system could have a material adverse effect on us.***

The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s, the PRC government has been building a comprehensive system of laws and regulations governing economic matters in general. The overall effect has been to significantly enhance the protections afforded to various forms of foreign investments in China. We conduct our business primarily through our subsidiaries established in China. These subsidiaries are generally subject to laws and regulations applicable to foreign investment in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available to us. In addition, some regulatory requirements issued by certain PRC government authorities may not be consistently applied by other government authorities (including local government authorities), thus making strict compliance with all regulatory requirements impractical, or in some circumstances impossible. For example, we may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, since PRC administrative and court authorities have discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we plan to enter into with our business partners, clients and suppliers. In addition, such uncertainties, including any inability to enforce our contracts, together with any development or interpretation of PRC law that is adverse to us, could materially and adversely affect our business and operations. Furthermore, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other more developed countries. We cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections available to us and other foreign investors, including you. In addition, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention.

***The Chinese government may intervene in or influence our operations at any time, which could result in a material change in our operations and significantly and adversely impact the value of our securities.***

The Chinese government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations as the government deems appropriate to further regulatory, political and societal goals. The Chinese government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could require us to seek permission from Chinese authorities to continue to operate our business adversely affect our business, financial condition and results of operations. Furthermore, recent statements made by the Chinese government have indicated an intent to increase the government's oversight and control over offerings of companies with significant operations in China that are to be conducted in foreign markets, as well as foreign investment in China-based issuers like us. Any such action, once taken by the Chinese government, could significantly limit or completely hinder our ability to offer or continue to offer securities to our investors, and could cause the value of our securities to significantly decline or become worthless.

***Recent regulatory developments in China may subject us to additional regulatory review and disclosure requirement, expose us to government interference, or otherwise restrict our ability to offer securities and raise capitals outside China, all of which could materially and adversely affect our business and the value of our securities.***

In light of the recent statements by the Chinese government indicating its intention to exert more oversight and control over overseas offerings of China-based companies and the proposed CAC review for certain data processing operators in China, we may adjust our business operations in the future, to comply with PRC laws regulating our industry and our business operations. However, such efforts may not be completed in a liability-free manner or at all. We cannot guarantee that we will not be subject to PRC regulatory inspection and/or review relating to cybersecurity, especially when there remains significant uncertainty as to the scope and manner of the regulatory enforcement. If we become subject to regulatory inspection and/or review by the CAC or other PRC authorities, or are required by them to take any specific actions, it could cause suspension or termination of the future offering of our securities, disruptions to our operations, result in negative publicity regarding our company, and divert our managerial and financial resources. We may also be subject to fines or other penalties, which could materially and adversely affect our business, financial condition, and results of operations.

We may be subject to PRC laws relating to, among others, data security and restrictions over foreign investments in value-added telecommunications services and other industry sectors set out in the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2020 Edition). Specifically, we may be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. These PRC laws apply not only to third-party transactions, but also to transfers of information between us and our wholly foreign-owned enterprises in China and Hong Kong, and other parties with which we have commercial relations. These PRC laws and their interpretations and enforcement continue to develop and are subject to change, and the PRC government may adopt other rules and restrictions in the future.

The recent regulatory developments in China, in particular with respect to restrictions on China-based companies raising capital offshore, and the government-led cybersecurity reviews of certain companies with variable-interest entity ("VIE") structure, may lead to additional regulatory review in China over our financing and capital raising activities in the United States. Pursuant to the PRC Cybersecurity Law, which was promulgated by the Standing Committee of the National People's Congress on November 7, 2016 and took effect on June 1, 2017, personal information and important data collected and generated by a critical information infrastructure operator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases internet products and services that affect or may affect national security, it should be subject to cybersecurity review by the Cyberspace Administration of China (the "CAC"). The PRC Cybersecurity Law also establishes more stringent requirements applicable to operators of computer networks, especially to operators of networks which involve critical information infrastructure. The PRC Cybersecurity Law contains an overarching framework for regulating Internet security, protection of private and sensitive information, and safeguards for national cyberspace security and provisions for the continued government regulation of the Internet and content available in China. The PRC Cybersecurity Law emphasizes requirements for network products, services, operations and information security, as well as monitoring, early detection, emergency response and reporting. Due to the lack of further interpretations, the exact scope of "critical information infrastructure operator" remains unclear.

On July 10, 2021, the CAC publicly issued the Cybersecurity Review Measures (the "Draft Measures") for public comments until July 25, 2021. According to the Draft Measures, the scope of cybersecurity reviews is extended to data processing operators engaging in data processing activities that affect or may affect national security. The Draft Measures further requires that any operator applying for listing on a foreign exchange must go through cybersecurity review if it possesses personal information of more than one million users. According to the Draft Measures, a cybersecurity review assesses potential national security risk that may be brought about by any procurement, data processing, or overseas listing. The review focuses on several factors, including, among others, (1) the risk of theft, leakage, corruption, illegal use or export of any core or important data, or a large amount of personal information, and (2) the risk of any critical information infrastructure, core or important data, or a large amount of personal information being affected, controlled or maliciously exploited by a foreign government after a company is listed overseas. While the Draft Measures have been released for consultation purposes, there is still uncertainty regarding the final content of the Draft Measures, its adoption timeline or effective date, its final interpretation and implementation, and other aspects.

Furthermore, the Standing Committee of the National People's Congress passed the Personal Information Protection Law of the PRC ("PIPL"), which will become effective from November 1, 2021, and requires general network operators to obtain a personal information protection certification issued by recognized institutions in accordance with the CAC regulation before such information can be transferred out of China.

On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement requesting additional disclosures from offshore issuers with China-based operating companies before their registration statements will be declared effective, including detailed disclosure related to VIE structures and whether the VIE and the issuer, when applicable, received or were denied permission from the PRC authorities to list on U.S. exchanges and the risks that such approval could be denied or rescinded.

On August 1, 2021, the CSRC stated that it had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory development in China, and that the securities regulators in both countries should strengthen communications on regulating China-related issuers. Our PRC legal counsel, Beijing Jindong Law Firm, has advised us that, in light of our business operations, we should not be required to undergo the CAC review for any offering that we may make. However, if the enacted version of the Draft Measures mandates clearance of cybersecurity review and other specific actions to be completed by companies aiming to offer securities outside China, we cannot assure you that the PRC regulatory authorities will not take a contrary view or will not subsequently require us to undergo the approval procedures and subject us to penalties for non-compliance, or that if we are required to obtain such clearance, such clearance can be timely obtained, or at all. If we become subject to cybersecurity inspection and/or review by the CAC or other PRC authorities or are required by them to take any specific actions, it could cause suspension or termination of the future offering of our securities, including offerings under this registration statement, disruptions to our operations, result in negative publicity regarding our company, and divert our managerial and financial resources. We may also be subject to significant fines or other penalties, which could materially and adversely affect our business, financial condition and results of operations. Furthermore, in the event that our subsidiaries become operators of critical information infrastructure in the future they (and MMTEC) may be subjected to the above-described regulation.

***The PRC government has significant influence over companies with China-based operations by enforcing existing rules and regulation, adopting new ones, or changing relevant industrial policies in a manner that may materially increase our compliance cost, change relevant industry landscape or otherwise cause significant changes to our business operations in China, which could result in material and adverse changes in our operations and cause the value of our securities to significantly decline or be worthless.***

Our operations are located entirely within China. The PRC government has significant influence over the China-based operations of any company by allocating resources, providing preferential treatment to particular industries or companies, or imposing industry-wide policies on certain industries. The PRC government may also amend or enforce existing rules and regulation, or adopt ones, which could materially increase our compliance cost, change the relevant industry landscape, or cause significant changes to our business operations in China. In addition, the PRC regulatory system is based in part on government policies and internal guidance, some of which are not published on a timely basis, or at all, and some of which may even have a retroactive effect. We may not be aware of all non-compliance incidents at all times, and we may face regulatory investigation, fines and other penalties as a consequence. As a result of the changes in the industrial policies of the PRC government, including the amendment to and/or enforcement of the related laws and regulations, companies with China-based operations, including us, and the industries in which we operate, face significant compliance and operational risks and uncertainties. For example, on July 24, 2021, Chinese state media, including Xinhua News Agency and China Central Television, announced a broad set of reforms targeting private education companies providing after-school tutoring services and prohibiting foreign investments in institutions providing such after-school tutoring services. As a result, the market value of certain U.S. listed companies with China-based operations in the affected sectors declined substantially. As of the date of this prospectus, we are not aware of any similar regulations that may be adopted to significantly curtail our business operations in China. However, if such other adverse regulations or policies are adopted in China, our operations in China will be materially and adversely affected, which may significantly disrupt our operations and adversely affect our business.

***We may be subject to anti-monopoly concerns as a result of our doing business in China.***

Article 3 of Anti-Monopoly Law of the People's Republic of China (the "Anti-Monopoly Law") prohibits "monopolistic practices," which include: a) the conclusion of monopoly agreements between operators; b) the abuse of dominant market position by operators; and c) concentration of undertakings which has or may have the effect of eliminating or restricting market competition. Also, according to Article 19 of the Anti-Monopoly Law, the operator(s) will be assumed to have a dominant market position if it has following situation: a) an operator has 50% or higher market share in a relevant market; b) two operators have 66% or higher market share in a relevant market; or c) three operators have 75% or higher market share in a relevant market. We believe none of our subsidiaries in China has engaged in any monopolistic practices in China, and that recent statements and regulatory actions by the Chinese government do not impact our ability to conduct business, accept foreign investments, or list on an U.S. or other foreign stock exchange. However, there can be no assurance that regulators in China will not promulgate new laws and regulations or adopt new series of regulatory actions which may require our Chinese subsidiaries to meet new requirements on the issues mentioned above.

***We rely on offerings of our securities in the United States capital markets to fund our working capital needs. The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing. Our failure to obtain or maintain any requisite approvals would have a material adverse effect on our ability to continue as a going concern, and could result in a loss of your entire investment.***

Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle, that is controlled directly or indirectly by the PRC companies or individuals and that has been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. The CSRC currently has not issued any definitive rule or interpretation concerning whether our offshore offerings are subject to the M&A Rules. The interpretation and application of the regulations remain unclear, and our offshore offerings may ultimately require approval of the CSRC. If the CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain the approval and, even if we obtain such CSRC approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.

On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. As a follow-up, on December 24, 2021, the CSRC issued a draft of the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies, and issued a draft of Administration Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies for public comments. These draft measures propose to establish a new filing-based regime to regulate overseas offerings and listings by domestic companies. Specifically, an overseas offering and listing by a PRC company, whether directly or indirectly, an initial or follow-on offering, must be filed with the CSRC. The examination and determination of an indirect offering and listing will be conducted on a substance-over-form basis, and an offering and listing shall be deemed as a PRC company's indirect overseas offering and listing if the issuer meets the following conditions: (i) any of the operating income, gross profit, total assets, or net assets of the PRC enterprise in the most recent fiscal year was more than 50% of the relevant line item in the issuer's audited consolidated financial statement for that year; and (ii) senior management personnel responsible for business operations and management are mostly PRC citizens or are ordinarily resident in the PRC, and the principal place of business is in the PRC or carried out in the PRC. The issuer or its affiliated PRC entity, as the case may be, shall file with the CSRC for its initial public offering, follow-on offering and other equivalent offering activities. Particularly, the issuer shall submit the filing with respect to its initial public offering and listing within three business days after its initial filing of the listing application, and submit the filing with respect to its follow-on offering within three business days after the completion of the follow-on offering. Failure to comply with the filing requirements may result in fines to the relevant PRC companies, suspension of their businesses, revocation of their business licenses and operation permits and fines on the controlling shareholder and other responsible persons. These draft measures also set forth certain regulatory red lines for overseas offerings and listings by PRC enterprises.

On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, which will become effective on March 31, 2023. On the same date of the issuance of the Trial Measures, the CSRC circulated No. 1 to No. 5 Supporting Guidance Rules, the Notes on the Trial Measures, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Companies and the relevant CSRC Answers to Reporter Questions on the official website of the CSRC, or collectively, the Guidance Rules and Notice. The Trial Measures, together with the Guidance Rules and Notice, reiterate the basic supervision principles as reflected in the Draft Overseas Listing Regulations by providing substantially the same requirements for filings of overseas offering and listing by domestic companies, yet made the following updates compared to the Draft Overseas Listing Regulations, including but not limited to: (a) further clarification of the circumstances prohibiting overseas issuance and listing; (b) further clarification of the standard of indirect overseas listing under the principle of substance over form, and (c) adding more details of filing procedures and requirements by setting different filing requirements for different types of overseas offering and listing. Under the Trial Measures and the Guidance Rules and Notice, initial public offerings or listings in overseas markets by domestic companies, either in direct or indirect form, shall be filed with the CSRC pursuant to the requirements of the Trial Measures within three working days after the relevant application is submitted overseas. The companies that have already been listed on overseas stock exchanges prior to March 31, 2023 or the companies that have obtained the approval from overseas supervision administrations or stock exchanges for its offering and listing prior to March 31, 2023 and will complete their overseas offering and listing prior to September 30, 2023 are not required to make immediate filings for its listing yet need to make filings for subsequent offerings in accordance with the Trial Measures. The companies that have already submitted an application for an initial public offering to overseas supervision administrations but have not yet obtained the approval from overseas supervision administrations or stock exchanges for the offering and listing prior to March 31, 2023 may arrange for the filing within a reasonable time period and should complete the filing procedure before such companies' overseas issuance and listing.

As of the date of this prospectus, we have not received any formal inquiry, notice, warning, sanction, or any regulatory objection from the CSRC with respect to this offering. As the Trial Measures were newly published and there is uncertainty with respect to the filing requirements and the implementation, if we are required to submit to the CSRC and complete the filing procedures of our overseas public offering and listing, we cannot be sure that we will be able to complete such filing in a timely manner. Any failure or perceived failure by us to comply with such filing requirements under the Trial Measures may result in forced rectification, warnings and fines against us and could materially hinder our ability to offer or continue to offer our securities.

On February 24, 2023, the CSRC, Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China jointly revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions. The revised Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, and will come into effect on March 31, 2023 with the Trial Measures. One of the major revisions to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.

As of the date hereof, the revised Provisions have not come into effect. On or after March 31, 2023, any failure or perceived failure by the Company or PRC Subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us. If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for Cybersecurity Review and the Draft Regulation on Network for Data Security (if implemented), are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected. Any failure to obtain or delay in obtaining such approval or completing such filing procedures for our offshore offerings, or a rescission of any such approval or filing if obtained by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities for failure to seek CSRC approval or filing or other government authorization for our offshore offerings. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our listed securities. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities. Our failure to obtain or maintain any requisite approvals would have a material adverse effect on our ability to continue as a going concern, and could result in a loss of your entire investment.

***Rules and regulations in China can change quickly with little advance notice, creating substantial uncertainty. Changes in the PRC legal system may adversely affect our business and operation.***

Our major business operations are conducted in the PRC and therefore regulated by the laws and regulations of the PRC. The PRC legal system is based on the written statutes and involves a unified, multilevel legislative system. The National People's Congress (the "NPC") and its Standing Committee exercise the state power to make laws. The NPC enacts and amends basic laws pertaining to criminal offences, civil affairs, state organs and other matters. The Standing Committee enacts and amends all laws except for basic laws that should be enacted by the NPC. When the NPC is not in session, its Standing Committee may partially supplement and revise laws enacted by the NPC, provided that the changes do not contravene the laws' basic principles. Generally, the PRC laws will go through specific legislative procedures before being promulgated. The legislative authority may propose a bill and then the bill shall be deliberated three times before being voted. However, administrative regulations are formulated by the State Council which reports them to the NPC. The administration regulations are often promulgated with little advance notice, which results in a lack of predictability, and substantial uncertainty. Moreover, the uncertainties may fundamentally impact the development of one or more specific industries and in extreme cases result in the termination of certain businesses. For example, the Opinions on Further Easing the Burden of Excessive Homework and After-School Tutoring for Students Undergoing Compulsory Education, known as "double reduction" education policy, was promulgated by General Office of the CPC Central Committee and General Office of the State Council on July 24, 2021. The "double reduction" education policy comes into effective immediately and has posed a significant impact on the education and training industries, as well as those China-based companies listed in the United States. The resulting unpredictable could materially and adversely affects the market value and the operation of the businesses affected.

Furthermore, the PRC administrative authorities and courts have the power to interpret and implement or enforce statutory rules and contractual terms at their reasonable discretion which makes the business environment much more complicated and unpredictable. It is difficult to predict the outcome of the administrative and court proceedings. The uncertainties may affect our assessments of the relevance of legal requirements, and our business decisions. Such uncertainties may result in substantial operating expenses and costs. Should there were any investigations, arbitrations or litigation with respect to our alleged non-compliance with statutory rules and contractual terms, the management team could be distracted from our primary business considerations, and therefore such a circumstance could materially and adversely affect our business and results of operations. We cannot predict future developments relating to the laws, regulations and rules in the PRC. We may be required to procure additional permits, authorizations and approvals for our operations, which we may not be able to obtain. Our failure to obtain such permits, authorizations and approvals may materially and adversely affect our business, financial condition and the results of operations.

***U.S. regulators' ability to conduct investigations or enforce rules in China is limited.***

The majority of our operations are conducted outside of the U.S. As a result, it may not be possible for the U.S. regulators to conduct investigations or inspections, or to effect service of process within the U.S. or elsewhere outside China on us, our subsidiaries, officers, directors and shareholders, and others, including with respect to matters arising under BVI or U.S. federal or state securities laws. China does not have treaties providing for reciprocal recognition and enforcement of judgments of courts with the U.S. and many other countries. As a result, recognition and enforcement in China of these judgments in relation to any matter, including U.S. securities laws and the laws of the BVI, may be difficult or impossible.

***The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer's public accounting firm within three years. This three-year period will be shortened to two years if the Accelerating Holding Foreign Companies Accountable Act is enacted. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U.S. securities regulatory agencies are unable to conduct such investigations, they may suspend or de-register our registration with the SEC and delist our securities from applicable trading market within the US.***

The Holding Foreign Companies Accountable Act was signed into law on December 18, 2020, and requires Auditors of publicly traded companies to submit to regular inspections every three years to assess such auditors' compliance with applicable professional standards. On June 22, 2021, the U.S. Senate passed the Accelerating Holdings Foreign Companies Accountable Act which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two, thus reducing the time before our securities may be prohibited from trading or delisted. As a result, the time period before our securities may be prohibited from trading or delisted will be reduced. If the U.S. securities regulatory agencies are unable to conduct such investigations, there exists a risk that they may determine to suspend or de-register our registration with the SEC and may also delist our securities from applicable trading market within the US. On December 2, 2021, the SEC adopted final amendments implementing congressionally mandated submission and disclosure requirements of the Holding Foreign Companies Accountable Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB determined that it was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China because of a position taken by one or more authorities in mainland China ("the Mainland China Determination"), and was unable to inspect or investigate completely registered public accounting firms headquartered in Hong Kong because of a position taken by one or more authorities in Hong Kong ("the Hong Kong Determination," and, together with the Mainland China Determination, "the 2021 Determinations"). On December 15, 2022, the PCAOB announced that it had vacated the 2021 Determinations after conducting extensive and thorough inspections and investigations of mainland China and Hong Kong firms in 2022 under a new comprehensive agreement with the PRC. However, the PCAOB also recognized that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect or investigate completely, and if the PCAOB were to encounter any impediment to conducting an inspection or investigation of auditors in mainland China or Hong Kong as a result of a position taken by an authority in either jurisdiction, it would act immediately to consider the need to issue new determinations consistent with the HFCAA.

***We face uncertainty regarding the PRC tax reporting obligations and consequences for certain indirect transfers of the stock of our operating company.***

Pursuant to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises issued by the PRC State Administration of Taxation on December 10, 2009, or Circular 698, where a foreign investor transfers the equity interests of a PRC resident enterprise indirectly by way of the sale of equity interests of an overseas holding company, or an Indirect Transfer, and such overseas holding company is located in a tax jurisdiction that: (i) has an effective tax rate less than 12.5% or (ii) does not tax foreign income of its residents, the foreign investor should report such Indirect Transfer to the competent tax authority of the PRC resident enterprise. The PRC tax authority will examine the true nature of the Indirect Transfer, and if the tax authority considers that the foreign investor has adopted an abusive arrangement in order to avoid PRC tax, they will disregard the existence of the overseas holding company and re-characterize the Indirect Transfer and as a result, gains derived from such Indirect Transfer may be subject to PRC withholding tax at the rate of up to 10%. In addition, the PRC resident enterprise is supposed to provide necessary assistance to support the enforcement of Circular 698. At present, the PRC tax authorities will neither confirm nor deny that they would enforce Circular 698, in conjunction with other tax collection and tax withholding rules, to make claims against our PRC subsidiaries as being indirectly liable for unpaid taxes, if any, arising from Indirect Transfers by shareholders who did not obtain their common shares in the public offering of our common shares.

PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit their ability to distribute profits to us, or otherwise materially and adversely affect us.

On July 4, 2014, the PRC State Administration of Foreign Exchange ("SAFE") promulgated the Circular on Relevant Issues Relating to Domestic Resident's Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaced the former Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via Overseas Special Purpose Vehicles (generally known as SAFE Circular 75) promulgated by SAFE on October 21, 2005. On February 13, 2015, SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, which took effect on June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.

These circulars require PRC residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a "special purpose vehicle." These circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material events. In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration, the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls.

We cannot provide any assurances that all such registration will be completed in a timely manner. Failure by such shareholder or beneficial owners of our company to comply with Circular 37 could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiary's ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

***PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit their ability to distribute profits to us, or otherwise materially and adversely affect us.***

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On July 4, 2014, the PRC SAFE promulgated the Circular on Relevant Issues Relating to Domestic Resident's Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaced the former Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via Overseas Special Purpose Vehicles (generally known as SAFE Circular 75) promulgated by SAFE on October 21, 2005. On February 13, 2015, SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, which took effect on June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.

These circulars require PRC residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a "special purpose vehicle." These circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material events. In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration, the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls.

We cannot provide any assurances that all such registration will be completed in a timely manner. Failure by such shareholder or beneficial owners of our company to comply with Circular 37 could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiary's ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

***PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.***

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As an offshore holding company of our PRC subsidiary, we may make loans to our PRC subsidiary, or we may make additional capital contributions to our PRC subsidiary. Any loans to our PRC subsidiary are subject to PRC regulations and approvals. For example, loans by us to our PRC subsidiary in China, each of which is a foreign-invested enterprise, to finance their activities cannot exceed statutory limits and must be registered with SAFE or its local counterpart.

We may also decide to finance our PRC subsidiary through capital contributions. These capital contributions must be approved by MOFCOM or its local counterpart. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiary or controlled PRC affiliate or capital contributions by us to our subsidiaries or any of their respective subsidiaries. If we fail to receive such registrations or approvals, our ability to capitalize our PRC operations may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business.

On June 15, 2016, SAFE promulgated the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular No.16. SAFE Circular No. 16 stipulates that the use of capital by foreign-invested enterprises, or FIEs shall follow "the principle of authenticity and self-use" within the business scope of such FIEs. The capital of an FIE and capital in Renminbi obtained by the FIE from foreign exchange settlement shall not be used for the following purposes: (i) directly or indirectly used for payment beyond the business scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii) directly or indirectly used for investment in securities or investments other than banks' principal-secured products unless otherwise provided by relevant laws and regulations; (iii) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license; and (iv) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises).

We cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiary or controlled PRC affiliate or with respect to future capital contributions by us to our PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business.

***Governmental control of currency conversion may limit our ability to use our future revenues effectively and the ability of our PRC subsidiary to obtain financing.***

The PRC government imposes control on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. Restrictions on currency conversion imposed by the PRC government may limit our ability to use our future revenues generated in Renminbi to fund our expenditures denominated in foreign currencies or our business activities outside China. Under China's existing foreign exchange regulations, Renminbi may be freely converted into foreign currency for payments relating to current account transactions, which include among other things dividend payments and payments for the import of goods and services, by complying with certain procedural requirements. Our PRC subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, by complying with certain procedural requirements. Our PRC subsidiary may also retain foreign currency in their respective current account bank accounts for use in payment of international current account transactions. However, we cannot assure you that the PRC government will not take measures in the future to restrict access to foreign currencies for current account transactions. Conversion of Renminbi into foreign currencies, and of foreign currencies into Renminbi, for payments relating to capital account transactions, which principally includes investments and loans, generally requires the approval of SAFE and other relevant PRC governmental authorities. Restrictions on the convertibility of the Renminbi for capital account transactions could affect the ability of our PRC subsidiary to make investments overseas or to obtain foreign currency through debt or equity financing, including by means of loans or capital contributions from us. We cannot assure you that the registration process will not delay or prevent our conversion of Renminbi for use outside of China.

***We may be classified as a "resident enterprise" for PRC enterprise income tax purposes; such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.***

The Enterprise Income Tax Law provides that enterprises established outside of China whose "de facto management bodies" are located in China are considered PRC tax resident enterprises and will generally be subject to the uniform 25% PRC enterprise income tax rate on their global income. In addition, a tax circular issued by the State Administration of Taxation on April 22, 2009 regarding the standards used to classify certain Chinese-invested enterprises established outside of China as resident enterprises clarified that dividends and other income paid by such resident enterprises will be considered to be PRC source income, subject to PRC withholding tax, currently at a rate of 10%, when recognized by non-PRC enterprise shareholders. This recent circular also subjects such resident enterprises to various reporting requirements with the PRC tax authorities. Under the implementation rules to the Enterprise Income Tax Law, a *de facto* management body is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and other assets of an enterprise. In addition, the tax circular mentioned above details that certain Chinese-invested enterprises will be classified as resident enterprises if the following are located or resident in China: senior management personnel and departments that are responsible for daily production, operation and management; financial and personnel decision making bodies; key properties, accounting books, company seal, and minutes of board meetings and shareholders' meetings; and half or more of the senior management or directors having voting rights.

Currently, there are no detailed rules or precedents governing the procedures and specific criteria for determining de facto management bodies which are applicable to our company or our overseas subsidiary. If our company or any of our overseas subsidiaries is considered a PRC tax resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, our company or our overseas subsidiary will be subject to the uniform 25% enterprise income tax rate as to our global income as well as PRC enterprise income tax reporting obligations. Second, although under the Enterprise Income Tax Law and its implementing rules dividends paid to us from our PRC subsidiary would qualify as tax-exempted income, we cannot assure you that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, dividends payable by us to our investors and gain on the sale of our common shares may become subject to PRC withholding tax. It is possible that future guidance issued with respect to the new resident enterprise classification could result in a situation in which a withholding tax of 10% for our non-PRC enterprise investors or a potential withholding tax of 20% for individual investors is imposed on dividends we pay to them and with respect to gains derived by such investors from transferring our common shares. In addition to the uncertainty in how the new resident enterprise classification could apply, it is also possible that the rules may change in the future, possibly with retroactive effect. If we are required under the Enterprise Income Tax law to withhold PRC income tax on our dividends payable to our foreign shareholders, or if you are required to pay PRC income tax on the transfer of our common shares under the circumstances mentioned above, the value of your investment in our common shares may be materially and adversely affected. It is unclear whether, if we are considered a PRC resident enterprise, holders of our common shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas.

***We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.***

As a holding company, we conduct substantially all of our business through our consolidated subsidiaries incorporated in China. We may rely on dividends paid by our PRC subsidiary for our cash needs, including the funds necessary to pay any dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. The payment of dividends by entities established in China is subject to limitations. Regulations in China currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. Our PRC subsidiary is required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves or statutory capital reserve fund until the aggregate amount of such reserves reaches 50% of its respective registered capital. As a result, our PRC subsidiary is restricted in their ability to transfer a portion of their net assets to us in the form of dividends. In addition, if our PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. Any limitations on the ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

***Our current employment practices may be restricted under the PRC Labor Contract Law and our labor costs may increase as a result.***

The PRC Labor Contract Law and its implementing rules impose requirements concerning contracts entered into between an employer and its employees and establishes time limits for probationary periods and for how long an employee can be placed in a fixed-term labor contract. Because the Labor Contract Law and its implementing rules have not been in effect very long and because there is lack of clarity with respect to their implementation and potential penalties and fines, it is uncertain how it will impact our current employment policies and practices. We cannot assure you that our employment policies and practices do not, or will not, violate the Labor Contract Law or its implementing rules and that we will not be subject to related penalties, fines or legal fees. If we are subject to large penalties or fees related to the Labor Contract Law or its implementing rules, our business, financial condition and results of operations may be materially and adversely affected. In addition, according to the Labor Contract Law and its implementing rules, if we intend to enforce the non-compete provision with an employee in a labor contract or non-competition agreement, we have to compensate the employee on a monthly basis during the term of the restriction period after the termination or ending of the labor contract, which may cause extra expenses to us. Furthermore, the Labor Contract Law and its implementation rules require certain terminations to be based upon seniority rather than merit, which significantly affects the cost of reducing workforce for employers. In the event we decide to significantly change or decrease our workforce in the PRC, the Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our circumstances or in a timely and cost-effective manner, thus our results of operations could be adversely affected.

**Risks Related to Ownership of our Common Shares**

***We are not in compliance with Nasdaq Listing Rule 5550(a)(2), the bid price rule. If we are unable to cure the failure within the prescribed time period, our common stock will be subject to delisting. A delisting would materially reduce the liquidity of our common stock and have an adverse effect on our market price.***

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On January 26, 2022, the Nasdaq Listing Qualifications Department notified us that that minimum closing bid price per share for our common stock was below $1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company had a compliance period of 180 calendar days, or until July 25, 2022 (the "Compliance Period"), to regain compliance with Nasdaq's minimum bid price requirement. If at any time during the Compliance Period, the closing bid price per share of the Company's common stock is at least $1.00 for a minimum of 10 consecutive business days, Nasdaq will provide the Company a written confirmation of compliance and the matter will be closed. In the event the Company does not regain compliance by July 25, 2022, the Company may be eligible for an additional 180 calendar day period to regain compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, including by effecting a reverse stock split, if necessary. If the Company chooses to implement a reverse stock split, it must complete the split no later than ten business days prior to the expiration of the second compliance period.

A delisting would materially reduce the liquidity of our common stock and have an adverse effect on our market price. A delisting would also likely make it more difficult for us to obtain financing through the sale of our equity. Any such sale of equity would likely be more dilutive to our current stockholders than would be the case if our shares were listed.

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***If our financial condition deteriorates as a NASDAQ listed company, we may not meet continued listing standards on the NASDAQ Capital Market.***

Our securities are currently listed for trading on the NASDAQ Capital Market. The NASDAQ Capital Market requires companies to fulfill specific requirements in order for their securities to continue to be listed. If our common shares are delisted from the NASDAQ Capital Market at some later date, our shareholders could find it difficult to sell our common shares. In addition, if our common shares are delisted from the NASDAQ Capital Market at some later date, we may apply to have our common shares quoted on the Bulletin Board or in the "pink sheets" maintained by the National Quotation Bureau, Inc. The Bulletin Board and the "pink sheets" are generally considered to be less efficient markets than the NASDAQ Capital Market. In addition, if our common shares are delisted at some later date, our common shares may be subject to the "penny stock" regulations. These rules impose additional sales practice requirements on broker-dealers that sell low-priced securities to persons other than established customers and institutional accredited investors and require the delivery of a disclosure schedule explaining the nature and risks of the penny stock market. As a result, the ability or willingness of broker-dealers to sell or make a market in our common shares might decline. If our common shares are delisted from the NASDAQ Capital Market at some later date or become subject to the penny stock regulations, it is likely that the price of our common shares would decline and that our shareholders would find it difficult to sell their common shares. In addition, we have relied on an exemption to the blue-sky registration requirements afforded to "covered securities." Securities listed on the NASDAQ Capital Market are "covered securities."

***We are a "foreign private issuer," and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.***

We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime. As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

***Common shares eligible for future sale may adversely affect the market price of our common shares, as the future sale of a substantial amount of outstanding common shares in the public marketplace could reduce the price of our common shares.***

The market price of our common shares could decline as a result of sales of substantial amounts of our common shares in the public market, or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future offerings of our common shares.

***Our officers, directors and principal shareholders own a significant percentage of our common shares and will be able to exert significant control over matters subject to shareholder approval.***

Our officers, directors and 5% or greater shareholders, in the aggregate, beneficially own approximately 42.0% of our outstanding common shares. Specifically, our chief executive officer and Chairman, in the aggregate, beneficially own 10.4%, which, in turn, will allow such shareholders to exert substantial influence over matters such as electing directors and approving mergers or other business combination transactions. As a result, our officers, directors and 5% or greater shareholders possess substantial ability to impact our management and affairs and the outcome of matters submitted to shareholders for approval. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their common shares as part of a sale of our company and might reduce the price of our common shares. These actions may be taken even if they are opposed by our other shareholders. See "Major Shareholders."

***We will incur increased costs and become subject to additional regulations and requirements as a result of becoming a newly public company, and our management will be required to devote substantial time to new compliance matters, which could lower our profits or make it more difficult to run our business.***

As a newly public company, we will incur significant legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements and costs of recruiting and retaining non-executive directors. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act and related rules implemented by the Securities and Exchange Commission, or the SEC, and NASDAQ. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. Our management will need to devote a substantial amount of time to ensure that we comply with all of these requirements. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common shares, fines, sanctions and other regulatory action and potentially civil litigation.

***The market price of common shares may be volatile, which could cause the value of your investment to decline.***

The market price of our common shares may be highly volatile and could be subject to wide fluctuations. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of our common shares in spite of our operating performance. In addition, our results of operations could be below the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly results of operations, additions or departures of key management personnel, failure to meet analysts' earnings estimates, publication of research reports about our industry, litigation and government investigations, changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, changes in market valuations of similar companies or speculation in the press or investment community, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, adverse publicity about our industry in or individual scandals, and in response the market price of our common shares could decrease significantly. You may be unable to resell your common shares of at or above the initial public offering price. In the past few years, stock markets have experienced extreme price and volume fluctuations. In the past, following periods of volatility in the overall market and the market price of a company's securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management's attention and resources, or at all.

***Future sales, or the perception of future sales, by us or our existing shareholders in the public market could cause the market price for our common shares to decline.***

The sale of substantial amounts of common shares in the public market, or the perception that such sales could occur could harm the prevailing market price of our common shares. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. If any existing shareholders sell a substantial amount of common shares, the prevailing market price for our common shares could be adversely affected. Our executive officers, directors and certain of our existing shareholders will sign lock-up agreements with the underwriters that will, subject to certain customary exceptions, restrict the sale of our common shares and certain other securities held by them for 180 days following the date of this report. The underwriters may, in their sole discretion and at any time without notice, release all or any portion of the common shares subject to any such lock-up agreements. As restrictions on resale end, the market price of our common shares could drop significantly if the holders of our restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our common shares or other securities.

***As the rights of shareholders under BVI law differ from those under U.S. law, you may have fewer protections as a shareholder.***

Our corporate affairs will be governed by our Memorandum and Articles of Association, the BVI Business Companies Act, 2004, as amended (the "BVI Act"), and the common law of the BVI. The rights of shareholders to take legal action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors under BVI law are governed by the BVI Act and the common law of the BVI. The common law of the BVI is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from the common law of England and the wider Commonwealth, which has persuasive, but not binding, authority on a court in the BVI. The rights of our shareholders and the fiduciary responsibilities of our directors under BVI law are largely codified in the BVI Act but are potentially not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States. In particular, the BVI has a less developed body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. As a result of all of the above, holders of our common shares may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than they would as shareholders of a U.S. company.

***BVI companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.***

Shareholders of BVI companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. Shareholders of a BVI company could, however, bring a derivative action in the BVI courts, and there is a clear statutory right to commence such derivative claims under Section 184C of the BVI Act. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The BVI courts are also unlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to impose liabilities against us, in original actions brought in the BVI, based on certain liability provisions of U.S. securities laws that are penal in nature. There is no statutory recognition in the BVI of judgments obtained in the United States, although the courts of the BVI will generally recognize and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. The BVI Act offers some limited protection of minority shareholders. The principal protection under statutory law is that shareholders may apply to the BVI court for an order directing the company or its director(s) to comply with, or restraining the company or a director from engaging in conduct that contravenes, the BVI Act or the company's Memorandum and Articles of Association. Under the BVI Act, the minority shareholders have a statutory right to bring a derivative action in the name of and on behalf of the company in circumstances where a company has a cause of action against its directors. This remedy is available at the discretion of the BVI court. A shareholder may also bring an action against the company for breach of duty owed to him as a member. A shareholder who considers that the affairs of the company have been, are being or likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, likely to be oppressive, unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the BVI court for an order to remedy the situation.

There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law. Under the general rule pursuant to English company law known as the rule in *Foss v. Harbottle*, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company's affairs by the majority or the Board of Directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to BVI law and the constituent documents of the company. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company's Memorandum and Articles of Association, then the courts may grant relief. Generally, the areas in which the courts will intervene are the following: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts that constitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe or are about to infringe on the personal rights of the shareholders, such as the right to vote; and (4) where the company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders. This means that even if shareholders were to sue us successfully, they may not be able to recover anything to make up for the losses suffered.

***The laws of the BVI may provide less protection for minority shareholders than those under U.S. law, so minority shareholders may have less recourse than they would under U.S. law if the shareholders are dissatisfied with the conduct of our affairs.***

Under the laws of the BVI, the rights of minority shareholders are protected by provisions of the BVI Act dealing with shareholder remedies and other remedies available under common law (in tort or contractual remedies). The principal protection under statutory law is that shareholders may bring an action to enforce the constitutional documents of the company (i.e. the Memorandum and Articles of Association) as shareholders are entitled to have the affairs of the company conducted in accordance with the BVI Act and the Memorandum and Articles of Association of the company. A shareholder may also bring an action under statute if he feels that the affairs of the company have been or will be carried out in a manner that is unfairly prejudicial or discriminating or oppressive to him. The BVI Act also provides for certain other protections for minority shareholders, including in respect of investigation of the company and inspection of the company books and records. There are also common law rights for the protection of shareholders that may be invoked, largely dependent on English common law, since the common law of the BVI for business companies is limited.

***We may not be able to pay any dividends on our common shares in the future due to BVI law.***

Under BVI law, we may only pay dividends to our shareholders if the value of our assets exceeds our liabilities and we are able to pay our debts as they become due. We cannot give any assurance that we will declare dividends of any amounts, at any rate or at all in the future. Future dividends, if any, will be at the discretion of our Board of Directors, and will depend upon our results of operations, cash flows, financial condition, payment to us of cash dividends by our subsidiaries, capital needs, future prospects and other factors that our directors may deem appropriate.

**ITEM 4. INFORMATION ON THE COMPANY**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **History and Development of the Company** 

MMTEC, INC. ("MMTEC") was founded on January 4, 2018 under the laws of the British Virgin Islands (the "BVI"). Our main operations are conducted through and by the PRC based operating entity, Gujia, based in Beijing, China. On April 20, 2018, we incorporated MM Fund for the purpose of providing administration services to the private equity funds industry. On May 28, 2018 and August 8, 2018, we incorporated MM Capital and MM SPC, respectively, for the purpose of providing assets management and investment services to clients. On March 19, 2018, MMTEC acquired a wholly owned subsidiary, MM Future Technology Limited ("MM Future"). MM Future was incorporated in Hong Kong on October 31, 2017 for the purpose of being a holding company for the equity interest in Gujia. In addition, our company acquired 24.9% of the outstanding securities of MMBD Trading on March 28, 2018 and acquired the remaining 75.1% on April 25, 2019. The acquisition was closed on October 18, 2019. MMBD Trading acquired a wholly owned subsidiary, MM Global on August 16, 2017. MM Global located in New York, NY. MM Global changed its corporate name from "MM Global, Inc" to "MM Global Securities, Inc." effective as of February 25, 2019. On March 15, 2019, the Company incorporated HC Securities, a Hong Kong company, for the purpose of providing assets management and investment services to clients. HC Securities is a wholly-owned subsidiary of MMTEC. HC Securities changed its corporate name from "MM Global Capital Limited" to "HC Securities (HK) Limited", effective on December 22, 2021. HC Securities applied license to SFC and was approved on December 21, 2021. HC Securities is licensed on dealing in securities, advising on securities and asset management. On July 9, 2019, we acquired 49% of a newly-formed entity called Xchain Fintech Pte.Ltd., ("Xchain"), a Singapore company, for the purpose of providing technical support for the construction and development of a new solutions for the existing problems of the traditional financial industry, the difficulty experienced by investors in investing and allocating investment assets globally, and the protection of funds and investments by using advanced technologies, such as artificial intelligence, big data analysis and blockchain. On March 23, 2020, we acquired all outstanding securities of MMBD Advisory. MMBD Advisory was formed in January 2018 in the U.S. and is registered as an investment advisor firm under the laws of the State of New York on May 7, 2018. The firm intends to offer non-discretionary investment advisory services to individuals and advisory services to private fund managers. We have developed and deployed a series of platforms which comprise a business chain that enables PRC-based hedge funds, mutual funds, registered investment advisors, proprietary trading groups, and brokerage firms to engage in securities market transactions and settlements globally. Fundex SPC was incorporated on September 13, 2021, as a wholly-owned subsidiary of MM Capital Management Limited, for the purpose of providing asset management services to clients. On June 7, 2023, the Company acquired 85% of Alpha Mind for aggregate purchase price of $99,650,000 and sold its interest in Alpha Mind to XChange on December 28, 2023 for the aggregate purchase price of $153,000,000. On November 18, 2023, the Company disposed of all of its interests in MMBD Advisory, MM Capital, MM SPC and Fundex SPC. On February 16, 2024, the Company incorporated HAI TEC INC. ("HAI TEC") under the laws of the BVI, for the purpose of being a holding company for the equity interest in our operating subsidiaries in China and other countries and regions. HAI TEC is a wholly-owned subsidiary of MMTEC. On March 12, 2025, the Company transferred all outstanding shares in HC Securities to HAI TEC, for a total consideration of HK$16,573,925 (equivalent to approximately $2.13 million). The share transfer was completed on March 12, 2025, resulting in HC Securities becoming a wholly-owned subsidiary of HAI TEC. On June 30, 2025, MM Fund was struck from the Company Register and thereupon dissolved. Haichuan Zhixin, our wholly-owned subsidiary of MM Future incorporated on April 13, 2023, was dissolved on December 26, 2025. On September 26, 2025, the Company incorporated Hai Capital Management Ltd ("Hai Capital") under the laws of the BVI. Hai Capital is a wholly-owned subsidiary of MMTEC. On October 3, 2025, the Company incorporated HC Investment Limited ("HC Investment"), a Hong Kong company. HC Investment is a wholly-owned subsidiary of HAI TEC.

We conduct our business through and based on distinct yet integrated business systems designed to provide support for our (i) Securities Dealers Trading System (securities registration and clearing, account management, risk management, quick trading and execution, and third party access middleware), (ii) Private Fund Investment Management System (multi-account management, fund valuation, risk management, quantitative trading access, liquidation and requisition management) and (iii) Mobile Transaction Individual Client System and PC Client System (Apple IOS, Android, PC, Web). We assist PRC-based financial institutions taking part in the overseas securities trading markets by providing them comprehensive Internet-based securities solutions. These PRC financial institutions, along with Hong Kong broker-dealer customers, may "white label" our trading interface (i.e., put their logos on it, make our trading interface available to their customers without referencing our name, as if it was developed by them in-house), or they can select from among our modular functionalities, such as order routing, trade reporting or clearing on specific products or exchanges where they may not have up-to-date technology to offer their customers a comprehensive range of services and products. We also help PRC-based hedge funds, mutual funds, proprietary trading groups to speed up their integration into the overseas market and offer them additional services, such as fund establishment, issuance, custody, transaction and settlement. We also provide a series of IR solutions service for China Concepts Stock companies, help maintain the relationship between listed companies and the company's equity, debt investors or potential investors. We provide our clients across all industries, sectors, and regions with strategic actionable intelligence and visibility into the capital markets for the long term. We used internally designed and built system with the US brokerage license and the Cayman fund management qualification to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set up the fund to issue securities fund products.

Our principal place of business is located at c/o MM Future Technology Limited, Room 2302, 23rd Floor, 308 Des Voeux Road Central, Sheung Wan, Hong Kong. Our telephone number at this address is +852 36908356. Our registered office in the British Virgin Islands is located at the offices of Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Our agent for service of process in the United States is Corporation Services Company, located at 251 Little Falls Drive, Wilmington, DE 19808. We maintain our website at http://www.haisc.com. The information contained on, or linked from, our website is not a part of this annual report.

The Company had 99,587,811 ordinary shares issued and outstanding as of December 31, 2025.

The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. which can be accessed at www.sec.gov. We maintain a corporate website at www.haisc.com. The information contained in, or accessible from, our website or any other website does not constitute a part of this Annual Report on Form 20-F.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Business Overview** 

We provide comprehensive, Internet-based technology services and solutions to the Chinese language speaking hedge funds, mutual funds, registered investment advisors, proprietary trading groups, and brokerage firms engaging in securities market transactions and settlements globally. We help these financial institutions to accelerate their integration into the overseas market by offering complete suite trading solutions, including services such as fund establishment, issuance, custody, transaction and settlement. These financial institutions may "white label" our trading interface (i.e., put their logos on it, make our trading interface available to their customers without referencing our name), or they can select from among our modular functionalities, such as order routing, trade reporting or clearing on specific products or exchanges to offer their customers a comprehensive range of services and products.

Our Company was founded on January 4, 2018. We have developed and deployed a series of platforms, including the ETN Counter Business System, the PTN Private Fund Investment Management System, the Personal Mobile Transaction Client System, the PC Transaction Client System, the Individual and Institutional Integrated Account Management System, and the Quantitative Investment Transaction Platform, which comprise a business chain that enables Chinese language speaking hedge funds, mutual funds, registered investment advisors, proprietary trading groups, and brokerage firms to engage in securities market transactions and settlements globally.

We conduct our business through and based on distinct yet integrated business systems designed to provide support for (i) Securities Dealers Trading System (securities registration and clearing, account management, risk management, quick trading and execution, and third party access middleware), (ii) Private Fund Investment Management System (multi-account management, fund valuation, risk management, quantitative trading access, liquidation and requisition management) and (iii) Mobile Transaction Individual Client System and PC Client System (Apple IOS, Android, PC, Web). We assist PRC-based financial institutions in taking part in the overseas securities trading markets by providing them with comprehensive Internet-based securities solutions. These PRC financial institutions, along with Hong Kong broker-dealer customers may "white label" our trading interface (i.e., put their logos on it, make our trading interface available to their customers without referencing our name, as if it were their in house product), or they can select services from among our modular functionalities, such as order routing, trade reporting or clearing on specific products or exchanges where they may not have up-to-date technology to offer their customers a comprehensive range of services and products. We also help Chinese language speaking hedge funds, mutual funds, proprietary trading groups to speed up their integration with the overseas market and offer them additional services, such as fund establishment, issuance, custody, transaction and settlement.

In 2019, our company added financial advisory and investment banking business line to the roster of services it offers to its customers. Under this new business line, the Company anticipates providing financial advising and investment banking services, including, among others, investments, restructuring, IPO and secondary offering guidance, and venture funding advice, for PRC-based small and medium-sized enterprises from various industries that seek access to the US capital markets. Specifically, the Company intends to assist its customers in financings and capital formation at different stages of their growth and development.

In 2020, our company used internally designed and built system with the US brokerage license and the Cayman fund management qualification to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set up the fund to issue securities fund products.

In 2021, our company applied for a license for dealing in securities, advising on securities and asset management in Hong Kong and continued to increase our sales force in the fund management services business, market data services business and broker-dealer business. In turn, our company reduce retail business gradually because of the Chinese government's requirements for cross-border data security supervision.

In 2022, the company ramped up investment banking team spending, expended the size of our support teams for our investment banking and fund management services businesses. The company announced that commencing March 6, 2023, the Company relocated its operations from Beijing to Hong Kong Special Administrative Region.

In 2023, the Company attempted to expand the scope of business into insurance agency industry with the completion of the acquisition of Alpha Mind in June 2023. However, in December 2023, the Company sold its interests in Alpha Mind to XChange and abandoned its plans to expand into the insurance industry. As the Company has been seeking business opportunities in US capital market, including through corporate financing, mergers and acquisitions, finance advisory, etc., the Company found it beneficial to sell its interests in Alpha Mind to XChange for consideration of $153 million. The disposition brought considerable income on the Company's financial statements.

**Our System and Solutions**

*Securities Dealers Trading Support System* 

 

**The Electric Trading Network Counter Management System ("ETN")** supports our institutional customers. The system consists of the following business modules:

 

● *Our account management system* that provides customers with a highly adaptable multi-account management system that systematically manages multiple accounts, executes simultaneous transactions among the accounts and guarantees efficiency and fairness in transactions.

 

● *Our risk control system* conducts comprehensive monitoring in the transaction execution process from initial position, decision-making to execution by setting the warning line and open line. It evaluates dynamic control of risks presented by scanning all asset units every 30 minutes. The system provides one-click opening and one-click query functions to facilitate operations by the risk control personnel, so that risks are controlled in a more timely and efficient manner. It supports multi-dimensional risk control and eliminates the transaction of highly risky stocks by setting up a stock pool in which such highly risky stocks are stored.

 

● *Our fast transaction system* features in one-click booking, fast transaction and combined booking to rapidly and efficiently integrate the centralized transaction system to ensure efficiency and accuracy of transactions.

*Private Fund Investment Management System*

 

**The Private Fund Trading Network Management System ("PTN")** is an in-house developed system that supports institutional customers. The system consists of the following modules:

● *Our account management system* – the PTN investment management system sets up account management functions such as risk control, clearing, accounting, reporting, and trading, etc. for fund operating and investment.

● *Our fund valuation system* – this system provides a package of valuation services, including valuation validation, investment monitoring, and information disclosure, with general and grouped valuation options provided to users upon demands.

● *Our fund risk management platform* – this system provides all-round risk control management for users in the entire process from transaction, compliance to risk control on three dimensions: transaction risk control, process risk control and risk control setting.

● *Our quantitative transaction access* – this system provides the user with efficient and fast quantitative transaction access modes including the standardized API and customized H5, SDK, APP, PC, to ensure rapid development and operation.

*Mobile Transaction Individual Client System and PC Client System* – As a result of our internal research and development efforts and upgrades, we have developed a mobile application for business transaction and social networking for our broker-dealer customers, and an efficient and fast transaction-only PC client system for their individual investor customers. This system provides the end users with real time comprehensive market information (bid/ask price, volume, breaking news, etc.) access through dedicated cross-border lines. We utilize dedicated Sino-US cross-border lines to provide end users with high-speed and stable market data, help them to apply for market licenses, and provide integrated market information-related solutions to the users, who may choose to pay monthly or yearly. We also provide end users with testing and debugging services.

**Our Financial Technology Solutions** 

*One-stop broker technology system solution -* we provide the following solutions to our broker customers:

● modular website building, online account opening system.

● modular PC-based trading clients and mobile APP trading clients for retail customers.

● market data center to help them apply for exchange quotations.

● ETN investment management system, backstage ERP system and commission clearing and settlement system.

● assistance to deployment system and undertaking operation and maintenance services.

*One-stop private fund investment management fund solution* – for small and medium-sized private funds with a management scale of more than $1 million and less than $100 million, we provide the following one-stop establishment and investment trading solutions to assist with:

● establishing private equity funds, registration, administration, and management of such funds.

● building PTN investment management system, deployment of investment transaction, fund management, risk control, ERP and other modules.

● opening trading accounts, handling valuation, liquidation and investment redemptions.

● marketing.

**Corporate History and Background**

● **MMTEC, INC.** –We formed MMTEC, INC., our BVI holding company on January 4, 2018.

● **MM Future** – Our wholly-owned Hong Kong subsidiary, was incorporated on October 31, 2017.

● **Gujia** – Our operating company in China and a wholly-owned subsidiary of MM Future.

● **Meimei Zhengtong (Beijing) Technology Co., Ltd.,** – A PRC incorporated entity (dissolved effective as of June 8, 2018).

● **MM Fund** – Our wholly-owned Cayman Islands subsidiary, which was incorporated on April 20, 2018 (dissolved effective as of June 30, 2025).

● **MM Capital** – Our wholly-owned Cayman Islands subsidiary, was incorporated on May 28, 2018, and was disposed on November 18, 2023.

● **HC Securities (HK) Limited** – Formerly known as MM Global Capital Limited, a wholly-owned Hong Kong subsidiary, was incorporated on March 15, 2019.

● **MM SPC** – MM SPC was incorporated on August 8, 2018, as a wholly-owned subsidiary of MM Capital, was disposed on November 18, 2023.

● **MMBD Trading** – Our wholly-owned subsidiary of MMTEC, acquired in October 2019.

● **MM Global Securities, INC.** – Our operating company in New York and a wholly-owned subsidiary of MMBD Trading Limited.

● **MMBD Investment Advisory Company Limited** – Our wholly-owned subsidiary of MMTEC, acquired in March 2020, was disposed on November 18, 2023.

● **Fundex SPC** – Fundex SPC was incorporated on September 13, 2021, as a wholly-owned subsidiary of MM Capital, was disposed on November 18, 2023.

● **Haichuan Zhixin** – Our wholly-owned subsidiary of MM Future, was incorporated in April 2023 (dissolved effective as of December 26, 2025).

● **Alpha Mind** – Our 85% owned subsidiary of MMTEC, acquired on June 7, 2023 and disposed on December 28, 2023.

● **HAI TEC** – Our wholly-owned subsidiary of MMTEC, was incorporated on February 16, 2024.

● **Hai Capital** – Our wholly-owned subsidiary of MMTEC, was incorporated on September 26, 2025.

● **HC Investment** – Our wholly-owned subsidiary of HAI TEC, was incorporated on October 3, 2025.

Gujia was established on June 9, 2015 under the laws of China with registered capital of RMB 10 million (approximately $1.51 million). Its original shareholders were Xiangdong Wen, who owned 75% and Peng Dong, which owned 25%. On January 29, 2016, Gujia increased its registered capital to RMB20.83 million (approximately $3.15 million). As result of the capital contribution, Xiangdong Wen decreased his equity ownership to 48%, Peng Dong decreased his equity ownership to 12%, and added an individual shareholder Zhen Fan, who owned 40%. On June 6, 2016, Gujia increased its registered capital to RMB 26.04 million (approximately $3.94 million). As result of the capital contribution, Xiangdong Wen decreased his equity ownership to 38.4%, Peng Dong decreased his equity ownership to 9.6%, and Zhen Fan decreased his equity ownership to 32%. New shareholders Beijing Yiyi Angel Investment Management Co. Ltd. owned 6.7%, Zhoushan Xianhe Investment Partnership (Limited Partnership) owned 10% and Shanghai Lanhong Investment Management Center (Limited Partnership) owned 3.3%. On November 30, 2017, Peng Dong transferred his 9.6% equity ownership to Xiangdong Wen; Beijing Yiyi Angel Investment Management Co. Ltd. transferred its 6.7% equity ownership to Zhen Fan; and Shanghai Lanhong Investment Management Center (Limited Partnership) transferred its 3.3% equity ownership to Zhen Fan Zhoushan Xianhe Investment Partnership (Limited Partnership) kept the same equity ownership. On January 29, 2018, Xiangdong Wen transferred his 48% equity ownership to MM Future, Zhen Fan transferred his 42% equity ownership to MM Future, Zhoushan Xianhe Investment Partnership (Limited Partnership) transferred its 10% equity ownership to MM Future . MM Future became the sole shareholder of Gujia.

Pursuant to the Securities Purchase Agreement dated as of April 25, 2019, the Company agreed to purchase the remaining 75.1% of outstanding securities of MMBD Trading. Prior to the consummation of this acquisition, (i) the Company held 24.9% of outstanding securities of MMBD, and (ii) each of Xiangdong Wen (the Chairman of the Board and Chief Executive Officer) and Zhen Fan (the former Chief Executive Officer) beneficially owned 37.55% of outstanding securities of MMBD, respectively. The Company agreed to pay the aggregate purchase price of $185,000 for such securities to be equally divided between the two shareholders of MMBD. The acquisition closed on October 18, 2019, following the receipt by the Company of requisite corporate and regulatory approvals, including, without limitation, FINRA CMA application approval, and the Company's Audit Committee's review and approval of the terms and provisions of this transaction involving related parties. Following and as a result of this acquisition, MMBD became a wholly-owned subsidiary of the Company.

Pursuant to the investment agreement dated as of March 23, 2020, the Company acquired all outstanding securities of MMBD Advisory for a consideration of $1,000, which was subsequently given up by the Hinman Au. Prior to this transaction, all outstanding securities of MMBD Advisory were owned by Hinman Au, a director of the Company. MMBD Advisory was formed in January 2018 in the U.S. and is registered as an investment advisor firm under the laws of the State of New York on May 7, 2018. The firm intends to offer non-discretionary investment advisory services to individuals and advisory services to private fund managers.

Pursuant to the Equity Acquisition Agreement dated as of May 16, 2023, the Company acquired an 85% ownership stake in Alpha Mind for a consideration of $99,650,000 on June 7, 2023. Pursuant to an Equity Acquisition Agreement dated as of November 22, 2023, the Company sold all of its interests in Alpha Mind to XChange for consideration of $153 million on December 28, 2023, which was paid in the form of a Secured Promissory Note made by XChange (the "XChange Note"). On April 26, 2024, the Company entered into a "Share Transfer Commitment Letter for Secured Promissory Note" with XChange (the "Commitment Letter"). Pursuant to the Commitment Letter, XChange reaffirmed its promise to pay the principal sum of $153,000,000 under the XChange Note, together with interest on the unpaid note on or prior to June 30, 2024 (the "Maturity Date"). In addition, pursuant to the Commitment Letter if XChange fails to pay the amounts due under the XChange Note, the Company will have the right to convert the unpaid principal and interest to shares of XChange at a discount of between 20% and 70% of the market price of such shares. The Maturity Date of the XChange Note was extended to December 31, 2025, with a provision that if any balance remains outstanding on that date, it will automatically extend to the end of the following year, pursuant to the Amendments to Secured Promissory Notes entered into by the Company and XChange dated June 30, 2025.

On November 18, 2023, the Company entered into a Share Transfer Agreement (the "Share Transfer Agreement 1") with Top Fintech Inc. Pursuant to the Share Transfer Agreement 1, the Company agreed to transfer all outstanding securities of MMBD Advisory, the wholly-owned subsidiary of the Company, to Top Fintech Inc., for a total consideration of $1,000. The disposition was closed on November 18, 2023, after the signing of Share Transfer Agreement 1 and ending in five days.

On November 18, 2023, the Company entered into a Share Transfer Agreement (the "Share Transfer Agreement 2") with Capital Jasmine Ltd. Pursuant to the Share Transfer Agreement 2, the Company agreed to transfer all outstanding securities of MM Capital, the wholly-owned subsidiary of the Company, to Capital Jasmine Ltd., for a total consideration of $500. The disposition was closed on November 18, 2023. As a result of the transaction, the Company no longer holds an interest in MM Capital or its two wholly-owned subsidiaries, MM SPC and Fundex SPC.

On February 16, 2024, the Company incorporated HAI TEC INC. ("HAI TEC") under the laws of the BVI, for the purpose of being a holding company for the equity interest in our operating subsidiaries in China and other countries and regions. HAI TEC is a wholly-owned subsidiary of MMTEC.

On March 12, 2025, the Company transferred all outstanding shares in HC Securities to HAI TEC, for a total consideration of HK$16,573,925 (equivalent to approximately $2.13 million). The share transfer was completed on March 12, 2025, resulting in HC Securities becoming a wholly-owned subsidiary of HAI TEC.

MM Fund was dissolved on June 30, 2025. Haichuan Zhixin was dissolved on December 26, 2025.

On September 26, 2025, the Company incorporated Hai Capital Management Ltd ("Hai Capital") under the laws of the BVI. Hai Capital is a wholly-owned subsidiary of MMTEC.

On October 3, 2025, the Company incorporated HC Investment Limited ("HC Investment"), a Hong Kong company. HC Investment is a wholly-owned subsidiary of HAI TEC.

**Industry and Market Background** 

Over the past several years, China has seen a steady increase in the rate of individual net worth and investment appetite for domestic and overseas equity investments, including an increase in investment demand of private equity funds.

There are two main channels which can currently be utilized by Chinese investors to invest in the U.S. securities markets:

<u>Ways to invest from within the PRC</u>:

● *Qualified Domestic Institutional Investor* ("QDII"): this status allows domestic investors to invest in publicly trading securities on foreign securities markets (excluding venture capital and private equity funds securities) via certain fund management institutions, insurance companies, securities companies and other assets management institutions which have been approved by China Securities Regulatory Commission ("CSRC"). These entities, in turn, offer investment opportunities to individual investors to invest in overseas stocks and fixed return securities.

● *Qualified Domestic Limited Partner*: this status allows qualified domestic limited partners to invest in overseas private funds and private equities. Only a few companies have obtained this status to date.

● *Qualified Domestic Investment Enterprise*: this platform allows mainland PRC investors to tap into a wider variety of foreign asset classes compared to the QDII by accessing offshore private equity, hedge funds and real assets, in addition to listed equities and debt securities that are already covered by the existing QDII. This platform is generally viewed as broad in scope, administration and lacking regulatory clarity.

● *Outbound Direct Investment* – Chinese companies headquartered in the Shanghai Free Trade Zone may conduct almost all equity investments via this platform as it is not subject to any investment quotas. However, this platform is ill-suited for small scale operations as it only contemplates investments by institutional/corporate investors, not individuals.

● *Qualified Domestic Individual Investor* is a new investment channel promoted by the Chinese government. It is expected to give PRC based individual investors who have at least RMB1 million of net assets more freedom to invest their money in overseas assets. It is expected that the PRC investors will be able to put money directly into overseas shares, bonds, mutual funds, insurance products, financial derivatives and property through this initiative. It is also expected to allow them to make direct investments in companies through mergers and acquisitions. No official date has been given for the launch of the scheme as of yet.

<u>Ways to invest from outside of the PRC</u>:

Many Chinese already have their assets in bank accounts outside China such as in Hong Kong, Singapore, Taiwan, U.S., or other countries. These investors may invest these funds in any available investment. We believe that these investors will benefit from a trading platform and service based in Mandarin Chinese.

*Growth of Chinese private fund markets* 

 

There are several notable aspects of development of Chinese private fund industry in recent years:

● *Rapid rate of growth.* According to Asset Management Association of China, by the end of December 2021, the number of registered private fund managers has reached 24,610, with a total dollar amount of RMB 19.76 trillion. The number of registered private funds has reached 124,117.

● *Substantial number of QDII funds under management and amount of QDII quota.* As of the end of 2021, the number of funds has reached 174, with a total cumulative amount of $157.519 billion. Among them, fund companies in the securities category rank first among various institutions with a quota of US$84.58 billion, accounting for 54%.

**Competition**

The development of financial information technology and the emergence of Internet securities brokers, such as Tigerbroker and Futu Securities, through an innovative Internet product development model, have changed the experience of the Internet trading platforms, by optimizing the account opening process, improving the market response rate, and impacting the traditional retail brokers. Traditional brokers mainly rely on conventional financial system providers for solutions. Financial technology companies provide various financial transaction solutions for their customers, including financial transactions such as online trading, front desk transactions and backstage clearing systems, which charge different costs according to different technical solutions.

There are several types of entities that provide investment system support in the U.S. securities markets for domestic (PRC) brokers and private funds.

● *The traditional retail brokerage system development company in USA.* At present, there are no U.S. securities technology suppliers specialized in providing services for the Chinese market, most of U.S. securities technology suppliers have focus on domestic market, and there is no entire indigenous overseas investment system suit for Chinese market.

 

● *The traditional retail brokerage system development company in Hong Kong.* At present, there are four mainstream technology suppliers in Hong Kong, which are Hundsun technology (HongKong) Inc., Ayers Solutions Limited, Ebroker Systems LTD and iAsia Online Systems Limited. Among these, Hundsun technology has a shareholding in Ayers Solutions Limited. Hundsun and iAsia are public companies.

● *The traditional private funds management system development company.* Most of the large private funds use Bloomberg system, but we focus on the private equity funds with assets management amount between $1 million to $200 million, our main competitor in this field is Hundsun Technologies.

For the private funds' administrator service, there are two types of companies that provide the service:

● *Traditional Hong Kong securities dealers*, including Galaxy Securities (Hong Kong), Haitong International Securities, CITIC International Securities, BOC International, Guosen Securities (Hong Kong), engage in trades of Hong Kong as well as U.S. securities. These dealers mainly conduct their business through offline business departments of domestic (PRC) dealers. These dealers generally buy a system or use the U.S. broker system, offer a total solution for the private funds.

● *The traditional private funds fund administrator service*, including Apex Fund Services, Citco Fund Services, etc.

The Hong Kong market mainly relies on the following four securities system development service companies providing services for traditional securities firms and financial institutions: Hundsun.com Co., Limited, Ayers Solutions Limited, eBroker Systems Limited, and iAsia Online Systems Limited:

● **Hundsun.com Co., Limited** is a Hong Kong holding subsidiary of Hundsun Technologies Inc., located in Hong Kong, mainly providing integrated accounts, securities and futures solutions for the Hong Kong financial industry.

● **Ayers Solutions Limited** ("Ayers") is a member of the Shanghai DZH Group. Ayers was incorporated in 2001 and specialized in developing securities and futures trading systems and settlement system for local and global financial institutions. Ayers has developed a comprehensive system that supports trading in multi-market, multi-currency, feature-rich sets of tools in an integrated platform with flexible application settings. Ayers has built an extensive network of global exchange connectivity, risk management solutions and API and FIX technology support. Ayers also specializes in providing trading systems and settlement system solutions for securities companies and futures companies in Hong Kong and its surrounding countries and regions.

● **iAsia Online Systems Limited** ("iAsia") is a financial software developer that supplies flexible and cost-effective applications, ranging from online trading, front-end trading and back-office settlement systems for various financial products to retail solutions. This company offers a wide range of financial products including securities, futures, commodities, options, unit trust, saving plan, leveraged FX and bullion systems. iAsia systems handle transaction settlement, monitor risk exposure, offer front end trading and inquiry to its users. All products are being used by market participants or financial houses.

● **eBroker Systems Limited** is a financial technology solution provider focusing on the provision of financial software solutions services to financial institutions. Its solutions are engineered to perform a variety of functions for both front office and back office.

In addition to the above-referenced companies, we compete with the following entities for providing services to the private equity/fund industry:

● **OP Investment Management Ltd**. ("OPIM") is a leading asset management company based in Hong Kong, and a member of the Oriental Patron Financial Group. It manages both global and Asian-based fund vehicles with expertise across every major regional market from China, Korea, India to the Middle East. OPIM is a fully licensed holder of Hong Kong SFC Type 4 & Type 9 licenses.

● **AssetMark Financial Holdings, Inc.** ("AssetMark") is a U.S. turnkey asset management platform, purchased by a Chinese listed brokerage. It has provided professional and serial investment solutions to U.S. investment advisers over the past 20 years. As of March 31, 2016, the total assets under management on the AssetMark platform were about $28.5 billion, serving more than 6,700 investment advisers and over 87,000 investors.

**Our Strategies**

Our key market strategies include:

●  ***Providing free, flexible and open securities technology services -*** we provide one-stop integrated solutions to small and medium-sized broker customers, by replacing a technical fee model with a free technical system featuring open system underlay access, standardized access interface and module products. The purpose is to build a more open technical platform that provides a wide variety of financial products and more open technical services for Internet securities.

 ****

Specifically, as we face increased competition, we also innovate when it comes to attracting new users. The general approach is to, by use of free platform, attract traffic and customers early on in the process, and then establish and maintain an environment connecting various users for which we can then charge our users. In this effort, we:

● Aim, when we compete with traditional technology developers, to provide free technical base platforms for securities business, which meet the traditional securities business in terms of functionality, security, etc., so as to attract more traditional securities companies to switch to our technical products,

● Develop better, more innovative products and offer functionalities and user experience beyond of what traditional technology developers may offer; we accomplish that by providing incentive to switch to our services for free,

● Provide, in addition to our basic set of technical products, value-added technical products, such as intelligent investment customers service, intelligent trading service, AI user analysis tools, etc., to help securities companies expand their business lines. We intend to charge for these product offerings in the future, but only if our users fully or partially use these free products first,

● Provide fund products, intelligent investment products or other types of financial products through MM Fund Services Limited. We intend to become a channel distributor to help small and medium-sized securities firms to provide competitive financial products on free platforms. As more securities brokers use our free products, we will put these products directly in the securities business platform for free as a part of our standard module. As wholesalers of these products, we anticipate deriving revenue from this approach in the future, and

● Establish an internal system where are able to connect different securities firms from one technical platform, so that their structured financial products and fixed income products can be circulated on one (our) platform.

Many small and medium-sized brokers do not have the capacity for research and development and are unwilling to bear high development costs. A licensed broker wishing to develop its own products and to build a comprehensive research and development team will need teams of engineers, developers of IOS and Android applications, of PC applications, and websites and online account set-up system. Most small- and medium-sized brokers are reluctant to invest in incur such costs.

We (i) make most technical systems free, open part of the core code, in an effort to build a more open technical platform to help admit more small and medium sized brokers; (ii) modularize products to help small and medium-sized broker customers to carry out development, lower the technical threshold, and facilitate customization; (iii) help small and medium-sized broker customers to deploy the system within one to four weeks to commence business immediately and provide system security solutions and post-maintenance; (iv) provide technical support in Chinese by offering solutions for technical interface with major U.S. exchanges and clearing banks; (v) deliver rapidly iterative products by providing multiple modules of personalized portfolio solutions and a better Internet experience for small and medium-sized broker customers; and (vi) use cloud technology to provide services with more varieties of financial products, to help small and medium-sized brokers to gain competitive advantages in attracting their customers.

Focus on serving small and medium sized private equity funds by lowering the setting up threshold, we believe that we can help our fund customers overcome the entry barrier, and make it possible to bring such funds to overseas stock markets. According to our analysis, we believe that small and medium sized private equity funds with assets under management ("AUM") between $1 million and $100 million, especially those with AUM between $2 million and $20 million, will become the bulk of our customers.

Large equity funds tend to set up their accounts through well-known brokers, and choose the services of fund administrators that are highly ranked across the globe. In contrast, small and medium sized private equity funds, especially those at the early stage with assets under management below $20 million, are faced with the following challenges: (i) limited capacity for fundraising at the early stage, typically small AUM of initial fund; (ii) small AUM equity funds makes it hard to cover the initial cost for attorneys and administrators; (iii) unfamiliar with the process for setting up overseas equity funds, lack of related laws and regulations, difficult to open bank accounts and brokerage trading accounts; (iv) loss of oversea growth opportunity. Many fund managers' domestic customers have already had their own personal investments overseas. It will be easier for these fund managers to attract their investors' overseas assets and invest in their oversea funds; (v) need tools for marketing and promotion, including brand promotion, as well as further information about overseas market; and vi) failure of overseas investment platform and system support to meet their needs, especially the needs of financial accounting and risk management.

For such funds, we will provide (i) a package solution that will optimize the set-up process and reduce the set-up cost to help them to invest in overseas markets; (ii) personal service to help them to solve issues related to the regulations and supervision of overseas funds and account set-up; (iii) completely Chinese language based PTN investment management system, free of charge to provide fund valuation, redemption management, and risk-control financial management system, free estimate of fund value, and a system for risk control and financial management that is customized for China's private equity funds; (iv) assistance in brand promotion and marketing, by providing additional market information, and organizing industry gatherings to promote their development; and (v) providing quantitative interface and open data to meet needs for access to small scale funds by localizing the U.S. financial industry standards so that more local quantitative funds can be interfaced with the U.S. stock market according to native technical standards.

●  ***Minimize technical barriers to securities trading*** – We aim to assist small- to medium-sized securities dealers, online financial management enterprises, Internet traffic platforms and individuals in their efforts to expand their respective businesses and lower the threshold for participation of the traditional securities industry.

●  ***Utilize cloud computing technologies, open financial platforms, and more diversified financial product*** - We help small and medium- sized securities brokerage firms build system on the cloud, we focus on providing backstage support for institutional clients, and develop a wide variety of technical and financial products for them.

●  ***Support PRC private equity funds to participate in overseas markets*** –We strive to minimize and possibly eliminate the cost of setting up the private equity funds, allowing our customers to use and rely on our technologies. We focus on small private funds with assets under management ranging from $1 million to $200 million.

●  ***Focus on the Chinese market, and all the markets that use Chinese as the native language-*** The U.S. securities market is the largest securities market in the world. We want to rely on financial technology to lower transaction threshold for all Chinese speaking investors to invest in U.S. securities market, and make it more convenient for them to invest.

**Our Competitive Strengths**

We believe that the following competitive strengths distinguish us from our competitors:

●  ***Product advantages and technology accumulation –*** by means of our technological advantages, better Internet experience and one-stop securities dealers solutions, we simplify the process of overseas investment transactions and lower the threshold of securities trading, making it easier for Chinese investors to get involved in global investment. We also provide (i) a complete product line from ENT, PTN to mobile end trading platform and PC-side trading platform, thus covering most of the operating systems required by broker-dealers and private equity funds; (ii) a stable market, trading system tested and relied for a period of time; (iii) rapid product development and iteration - we can develop products which meet the customer's latest demands; and (iv) understanding of financial markets and information technology development.

●  ***Sound marketing strategies*** - We follow the same rules for both brokerage firms and private equity customers: we provide free technical systems yet charge a fee for post financial or additional premium services to encourage more brokers-dealers and private equity funds to use our technical products and services. (i) through free technical system services that change the delivery mode of the securities industry developers, we reduce the operating costs of small and medium-sized brokerage firms, (ii) with more choices for small and medium-sized brokerage firms, to help their customers respond to changes in the Internet, we provide better tools and platforms that enable customers choose and customize their services, and (iii) by helping private equity funds overcome the set-up threshold issue, we enable more private equity funds step into the overseas stock market and grow with them.

●  ***Innovative and open Internet idea -*** By using cloud technology, we help traditional financial institutions cope with the changes in traditional online securities trading. Based on cloud technology that helps more brokerage firms minimize the access threshold of technology, we stick to the user-centered product development model, and use faster deployment systems to meet customers' demand and reduce their technical service costs. We maintain an open technical environment and provide an open platform for all users who want to access overseas investment transactions. We are also able to provide customized product service for users. We believe that the new generation of Chinese investors has a more sophisticated understanding of financial transactions, which requires a better user experience and more innovative products and service.

We will (i) be more open minded, make accessible most of the bottom core code, make accessible the bottom system interface, and complete the most challenging task so as to help customers use simple tools for development on our platform; (ii) quickly develop and update products so as to be in better preparation for changes in the online securities trading industry; (iii) provide more tools for our customers to help them become business partners and help them grow.

●  ***A professional team with diversified backgrounds*** - Our team members are from Internet companies, financial enterprises and traditional securities information system development companies. They are familiar with the financial market, and have expertise in the development of securities information technology. Members of this diverse backgrounds teamwork in their respective areas with efficiency and professionalism.

●  ***Better ecology and environment -*** With the acquisition of MMBD Trading and MM Global in the United States, we are able to provide better services to non-U.S. small and medium-sized brokerage firms to access the U.S. market, and also to the small and medium-sized private equity funds with deeper understanding of their needs.

●  ***Market opportunities*** - Traditional financial markets rely more and more on information technology. In dealing with the overseas market, under the barrier of language, market mechanism and cultural background, we rely on technology to change the relationship between brokerage firms and traditional information technology developers. As the earliest participants in this model, we enjoy favorable market opportunities. At the same time, there has been an increasing demand for China's small and medium-sized private equity funds to go overseas, as well as more Chinese investors investing outside of China. At the early stage development of this industry, we will actively participate in the development of industry service standards and service system, and make good use of this market opportunity.

●  ***Localized service -*** 24/7 customer service in complete Chinese language. From trading API document to technology support, we strive to create a more user-friendly environment for our customers. We also provide more pleasant user trading experience for Chinese customers. They will get more localized trading experience, without trial and error, and easier and more pleasant investment in overseas markets. Back on the Chinese market, we understand the rules of the United States. We also understand better the needs of Chinese investors. And we provide more localized private fund services and more financial products and services support. With the system support of MM Fund and PTN, we will provide a more localized private fund administration service to our clients. We will respond to their request in a timely manner, being more attentive to their needs and requests.

Individual investors and private equity funds coming from China and Hong Kong markets are increasingly relying on financial systems developed by traditional system developing companies. Our competitive strengths are primarily in the following areas:

●  ***Reliance on our technological advantages, rich Internet experience and one-stop securities dealer solutions:*** We make overseas investment transactions more convenient by lowering the trading threshold, making it easier for Chinese investors to get involved in global investment. We also provide smoother user trading experience for Chinese customers. They will get more localized trading experience, without trial and error, becoming easier and smoother investing in overseas markets. Back on the Chinese market, we understand the rules of the United States, we also have a better understanding of needs of Chinese investors.

●  ***More localized private equity fund services*** . Based on the system support from MM Fund Service Limited and PTN, we will provide more localized private fund administrator service for our clients.

●  ***Reducing the technical access threshold of the securities industry*** . Rely on cloud technology to help more brokerage firms to minimize the access threshold of technology. We insist in user-centered product development model, faster deployment systems to meet customers' demand and reduce their technical service costs. We adhere to an open technical environment and provide an open platform for all users who want to access overseas investment transactions. We also provide customized product service for users. The new generation of Chinese investors has an updated understanding of the transactions, which requires a better user experience and more innovative products and service.

●  ***Localized user experience*** . 24/7 customer support in complete Chinese language service. From trading API document to technology support, we make our customers more competitive in trading space by providing service in their native language.

**Marketing** 

We aim to offer these and other similarly situated financial services providers with a full spectrum of technical system solutions. Specifically, we intend to open an office in Hong Kong for such future customers and retain local sales force to promote our services in the market and increase our brand exposure. In addition, we intend to increase our sales and marketing teams in Shanghai and Beijing to offer our technical solutions to the PRC private fund industry participants. We also intend to hold conference, educational and other events to promote our brand recognition.

**Research and Development** 

Our technology is critical to our operations. The following are some of our technology development milestones:

● In October 2015, our Shanghai Branch was founded; the Shanghai Technical Research and Development Center started operation.

● In December 2015, the ETN Counter Business System was launched for trial operation.

● In August 2016, the PTN Private Fund Investment Management System was launched for operation.

● In December 2016, the 4th version of the ETN Investment Management System was successfully employed. The Sino-US Special Line was completed and the Market and Quantitative Transaction Platform started operation.

We intend to maintain the research and development input in product design at no less than 35% of our company's total input, and an incentive mechanism for research and development personnel should be formulated to achieve breakthrough in product design stability and security and personalization.

**Employees** 

Our principal offices are located in Hong Kong Special Administrative Region; we also have a technical research & development center in Beijing, office in Shenzhen, China, and we also operate a broker-dealer in New York City. As of April 2, 2026, we employed 31 people on a full-time basis, comprised of 3 employees in management, 20 employees in sales and marketing, 2 employee in research and development, and 6 employees in administration.

**Intellectual Property Rights** 

We rely on our technology copyright to protect our domestic business interests and ensure our competitive position in our industry. We have placed a high priority on the management of our intellectual property. Some products that are material to our operating results incorporate technology copyright. Although technology copyright is important to the continued success of our products, we do not believe that our business, as a whole, is dependent on, or that its profitability would be materially affected by the revocation, termination, expiration or infringement upon any particular patent or copyright. We have applied for software copyright protection in China covering our software technology. We applied to National Copyright Administration of the P.R.C. for 27 software copyrights, which was approved on June 28, 2018, March 14, 2019 and September 1, 2021.

**Properties** 

Our headquarters is located at Room 2302, 23/F, 308 Des Voeux Road Central, Hong Kong. Our research and development center is located in Beijing. All of the facilities are leased. We believe our facilities are adequate for our current needs and we do not believe we will encounter any difficulty in extending the terms of the leases by which we occupy our respective premises. A summary description of our facilities locations follows:

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| | | | |
|:---|:---|:---|:---|
| **Office** | **Address** | **Rental Term** | **Space** |
| Headquarters | Room 2302, 23/F, 308 Des Voeux Road Central, Hong Kong | October 25, 2025 – October 24, 2026 | 969 sq. Ft. |
| New York Center | 575 Lexington Avenue New York, NY, 10022, USA | February 1, 2025 – February 28 , 2026 | Approximately 200 sq. Ft. |
| Beijing Research & Development Center | AF, 16/F, Block B, Jiacheng Plaza, 18 Xiaguangli, Chaoyang District, Beijing 100027 | December 1, 2025 – November 30, 2027 | 6,920.66. sq. Ft. |
| Beijing Center | Room 2501, Block A, Yuanyangxinganxian Building, Xiaguangli, Chaoyang District, Beijing 100027 | October 8, 2024 – October 7, 2026 | 4,262.72 sq. Ft. |
| Shenzhen Center | Room 401-10, Fangda Building, Keji Nan 12<sup>th</sup> Road, Nanshan District, Shenzhen, Guangdong | March 13, 2025 – March 12, 2026 | 269.1 sq. Ft. |

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**Legal Proceedings**

In the normal course of business, MM Global is engaged in various trading and brokerage activities on a principal and agency basis through a clearing broker. As a regulated FINRA broker-dealer MM Global is subject to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA rules may have occurred. As such, MM Global has responded to FINRA inquires. MM Global submitted a Letter of Acceptance, Waiver, and Consent for the purpose of proposing a settlement of the alleged rule violations on September 9, 2022. Without admitting or denying the findings by FINRA related to Case Number 20190626230, the Company was censured, fined $450,000. Two individuals' registration capacities were suspended for 45 days, fined $20,000 and $5,000 respectively. The Company elected to pay the fine via a 36 months' installment plan with $38,250 installment fee. As of December 31, 2025, all the Company's fine has been fully paid.

Other than MM Global, we are currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse effect on our business, financial condition, results of operations or cash flows.

**Government Regulation**

**Regulation of Foreign Currency Exchange and Dividend Distribution**

***Foreign Currency Exchange.*** The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations (1996), as amended on August 5, 2008, the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996) and the Interim Measures on Administration on Foreign Debts (2003). Under these regulations, Renminbi is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for most capital account items, such as direct investment, loans, repatriation of investment and investment in securities outside China, unless the prior approval of SAFE or its local counterparts is obtained. In addition, any loans to an operating subsidiary in China that is a foreign invested enterprise, cannot, in the aggregate, exceed the difference between its respective approved total investment amount and its respective approved registered capital amount. Furthermore, any foreign loan must be registered with SAFE or its local counterparts for the loan to be effective. Any increase in the amount of the total investment and registered capital must be approved by the MOFCOM or its local counterpart. We may not be able to obtain these government approvals or registrations on a timely basis, if at all, which could result in a delay in the process of making these loans.

The dividends paid by the subsidiary to its shareholder are deemed shareholder income and are taxable in China. Pursuant to the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), foreign-invested enterprises in China may purchase or remit foreign exchange, subject to a cap approved by SAFE, for settlement of current account transactions without the approval of SAFE. Foreign exchange transactions under the capital account are still subject to limitations and require approvals from, or registration with, SAFE and other relevant Chinese governmental authorities.

***Dividend Distribution.*** The principal regulations governing the distribution of dividends by foreign holding companies include the Company Law of China (1993), as amended in 2013, the Foreign Investment Enterprise Law (1986), as amended in 2000, and the Administrative Rules under the Foreign Investment Enterprise Law (1990), as amended respectively in 2001 and 2014.

Under these regulations, wholly foreign-owned investment enterprises in China may pay dividends only out of their retained profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, wholly foreign-owned investment enterprises in China are required to allocate at least 10% of their respective retained profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends, and a wholly foreign-owned enterprise is not permitted to distribute any profits until losses from prior fiscal years have been offset.

***Circular 37.*** On July 4, 2014, SAFE issued Circular 37, which became effective as of July 4, 2014. According to Circular 37, Chinese residents shall apply to SAFE and its branches for going through the procedures for foreign exchange registration of overseas investments before contributing the domestic assets or interests to a SPV. An amendment to registration or filing with the local SAFE branch by such Chinese resident is also required if the registered overseas SPV's basic information such as domestic individual resident shareholder, name, operating period, or major events such as domestic individual resident capital increase, capital reduction, share transfer or exchange, merger or division has changed. Although the change of overseas funds raised by overseas SPV, overseas investment exercised by overseas SPV and non-cross-border capital flow are not included in Circular 37, we may be required to make foreign exchange registration if required by SAFE and its branches.

Moreover, Circular 37 applies retroactively. As a result, Chinese residents who have contributed domestic assets or interests to a SPV, but failed to complete foreign exchange registration of overseas investments as required prior to implementation of Circular 37, are required to send a letter to SAFE and its branches for explanation. Under the relevant rules, failure to comply with the registration procedures set forth in Circular 37 may result in receiving a warning from SAFE and its branches, and may result in a fine of up to RMB 300,000 for an organization or up to RMB 50,000 for an individual. In the event of failing to register, if capital outflow occurred, a fine up to 30% of the illegal amount may be assessed.

Chinese residents who control our Company are required to register with SAFE in connection with their investments in us. If we use our equity interest to purchase the assets or equity interest of a Chinese company owned by Chinese residents in the future, such Chinese residents will be subject to the registration procedures described in Circular 37.

**Cash Transfers Within Our Organization**

During each of the fiscal years ended December 31, 2023, 2024 and 2025, the only transfer of assets among MMTEC and its subsidiaries have consisted of cash. During that same period, there have been no distributions or dividends by any of our direct or indirectly held subsidiaries to MMTEC. During that same period MMTEC has not declared any dividends or made any distributions to its shareholders, including its U.S. investors, and we do not anticipate declaring a dividend in the foreseeable future.

MMTEC routinely provides cash to its subsidiaries either by way of capital contribution or by way of loan. All such loans are interest-free, unsecured and payable on demand. The proceeds of any such loan will be wired to the borrower subsidiary and will be recorded on our books as "Inter-Company due." Such loan amounts are eliminated in our consolidated financial statements. Cash transferred outside of our organization to satisfy our obligations to third parties are also effected via wire transfer.

MMTEC is a holding company incorporated in the British Virgin Islands, and we do not have any substantive operations other than indirectly holding the equity interest in our operating subsidiaries in China and other countries and regions. MMTEC relies on dividends paid by our subsidiaries and capital raised from the sale of our securities to satisfy our cash needs. The payment of dividends to MMTEC by our subsidiaries is effected by means of dividends by those entities to their direct parent and, as applicable, a redividend by that entity to MMTEC. Such dividends are effected by resolution of the board of directors of each such entity (after provision for applicable tax obligations).

China is a foreign exchange administration country. Capital injections, cross-border trade and services transactions settled in foreign exchange, overseas financing and profit repatriations are subject to the foreign exchange administration regulations. The Authority dealing with foreign exchange in China is the SAFE and its local branches. A Chinese subsidiary owned by a foreign company must apply for registration of foreign exchange with the SAFE after the issuance of a business license and obtain a foreign exchange registration certificate. When the Chinese subsidiaries apply to repatriate dividends to foreign shareholders, they must submit the application form to SAFE with the proof that such dividends have been subjected to all applicable tax withholding. A Chinese subsidiary can only distribute dividends out of its accumulated profits, which means that any accumulated losses must be more than offset by its profits in other years, including the current year.

The cash transfers within the organization during the above-referenced periods were as follows:

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|:---|:---|:---|:---|:---|:---|:---|
| **For The Year 2025** | **For The Year 2025** | **For The Year 2025** | **For The Year 2025** | **For The Year 2025** | **For The Year 2025** | **For The Year 2025** |
| **Company <br> (Wire transfer from)** | **Company <br> (Wire transfer to)** | **Amount** | **Amount** | **Equivalent<br> to amount<br> (USD)** | **Purpose** | **Asset<br> Type** |
| MMTEC | MM Future | US$ | 3230000 | 3230000 | Capital contribution | Cash |
| MMTEC | HAI TEC | HK$ | 4000 | 514 | Capital contribution | Cash |
| MMTEC | HAI TEC | US$ | 670000 | 670000 | Capital contribution | Cash |
| MM Future | Gujia | RMB | 15033356 | 2100000 | Capital contribution | Cash |
| MM Global | MMBD Trading | US$ | 500000 | 500000 | Withdraw investment | Cash |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **For The Year 2024** | **For The Year 2024** | **For The Year 2024** | **For The Year 2024** | **For The Year 2024** | **For The Year 2024** | **For The Year 2024** |
| **Company <br> (Wire transfer from)** | **Company <br> (Wire transfer to)** | **Amount** | **Amount** | **Equivalent<br> to amount<br> (USD)** | **Purpose** | **Asset<br> Type** |
| MMTEC | MMBD Trading | US$ | 480000 | 480000 | Capital contribution | Cash |
| MMTEC | MM Future | US$ | 2700000 | 2700000 | Capital contribution | Cash |
| MMTEC | HC Securities | HK$ | 1948898 | 250000 | Capital contribution | Cash |
| MMTEC | HAI TEC | HK$ | 120000 | 15379 | Capital contribution | Cash |
| MM Future | Gujia | RMB | 13141334 | 1850000 | Capital contribution | Cash |
| MMBD Trading | MM Global | US$ | 465000 | 465000 | Capital contribution | Cash |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **For The Year 2023** | **For The Year 2023** | **For The Year 2023** | **For The Year 2023** | **For The Year 2023** | **For The Year 2023** | **For The Year 2023** |
| **Company <br> (Wire transfer from)** | **Company <br> (Wire transfer to)** | **Amount** | **Amount** | **Equivalent<br> to amount<br> (USD)** | **Purpose** | **Asset<br> Type** |
| MMTEC | MMBD Trading | US$ | 355000 | 355000 | Capital contribution | Cash |
| MMTEC | MM Future | US$ | 205000 | 205000 | Capital contribution | Cash |
| MMTEC | HC Securities | HK$ | 5779911 | 740000 | Capital contribution | Cash |
| MM Global | MMBD Trading | US$ | 220000 | 220000 | Withdraw investment | Cash |
| MM Future | HC Securities | HK$ | 1482779 | 190000 | Intercompany loan for working capital | Cash |
| MM Future | Gujia | RMB | 5896208 | 825000 | Capital contribution | Cash |
| MMBD Trading | MM Future | US$ | 220000 | 220000 | Intercompany loan for working capital | Cash |
| MMBD Trading | MM Global | US$ | 355000 | 355000 | Capital contribution | Cash |

---

The enforceability and treatment of the intercompany agreements within our organization, including the intercompany loan agreements described above used in connection with intercompany cash transfers, have not been tested in court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Organizational Structure** 

The following chart illustrates the Company's organizational structure as of April 2, 2026:

![](ea028404601_img1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Property, Plant and Equipment** 

For a listing of our properties, see "Item 4.B. Business Overview - Properties."

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

Not applicable.

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2025, 2024 and 2023 should be read in conjunction with our consolidated financial statements and related notes to those consolidated financial statements that are included elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in this report.

Unless otherwise indicated, references to the "Company", "us" or "we" refer to MMTEC and its consolidated subsidiaries.

**Special Note Regarding Forward-looking Statements**

All statements other than statements of historical fact included in this report including, without limitation, statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this report, words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of a number of factors, including those set forth under the risk factors and business sections in this report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Operating Results** 

**Overview**

Our Company develops and deploys a series of platforms, including the ETN Counter Business System, the PTN Private Fund Investment Management System, the Personal Mobile Transaction Client System, the PC Transaction Client System, the Individual and Institutional Integrated Account Management System, and the Quantitative Investment Transaction Platform, which collectively comprise a business chain that enables Chinese language speaking hedge funds, mutual funds, registered investment advisors, proprietary trading groups, and brokerage firms to engage in securities market transactions and settlements globally.

In 2019, our company added financial advisory and investment banking business line to the roster of services it offers to its customers. Under this new business line, the Company anticipates providing financial advising and investment banking services, including, among others, investments, restructuring, IPO and secondary offering guidance, and venture funding advice, for PRC-based small and medium-sized enterprises from various industries that seek access to the US capital markets. Specifically, the Company intends to assist its customers in financings and capital formation at different stages of their growth and development.

Our company used internally designed and built system with the US brokerage license and the Cayman fund management qualification to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set up the fund to issue securities fund products.

The value of the RMB, the main currency used in China, fluctuates and is affected by, among other things, changes in China's political and economic conditions. The conversion of RMB into foreign currencies such as the U.S. dollar have generally been based on rates set by the People's Bank of China, which are set daily based on the previous day's interbank foreign exchange market rates and current exchange rates on the world financial markets.

**Basis of Presentation**

The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and with the rules and regulations of the U.S. Securities and Exchange Commission for financial information.

The Company's consolidated financial statements include the accounts of MMTEC and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**Comparison of Results of Operations for the Years Ended December 31, 2025, 2024 and 2023.**

***Revenue***

The following table sets forth the components of our net revenues by amounts and percentages of our total net revenues for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **US$** | **%** | **US$** | **%** |
| **Net revenues:** |  |  |  |  |
| Placement agent services | 807500 | 100.0% | 1860000 | 99.6% |
| Other revenue | - | -% | 8333 | 0.4% |
| **Total net revenues** | **807500** | **100.0%** | **1868333** | **100.0%** |

---

For the years ended December 31, 2025 and 2024, our fully owned subsidiary, MM Global, operates as a securities broker-dealer, generated Placement agent services revenue of $807,500 and $1,860,000, and other related revenue of nil and $8,333, for the years ended December 31, 2025 and 2024, respectively.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2024** | **2024** | **2023** | **2023** |
|  | **US$** | **%** | **US$** | **%** |
| **Net revenues:** |  |  |  |  |
| Consulting services |  | -% | 800000 | 92.0% |
| Software development and maintenance |  | -% | 24098 | 2.8% |
| Placement agent services | 1860000 | 99.6% | 45837 | 5.2% |
| Other revenue | 8333 | 0.4% | - | -% |
| **Total net revenues** | **1868333** | **100.0%** | **869935** | **100.0%** |

---

For the years ended December 31, 2024 and 2023, we had revenue from Consulting service of nil and $800,000, which relating to our financial advisory and investment banking business. Our revenue from Software development and maintenance sales to our customers were nil and $24,098 for the years ended December 31, 2024 and 2023, respectively. As a result of business development and our acquisition of MMBD Trading, which has a fully owned subsidiary, MM Global, that engages in a single line of business as a securities broker-dealer, our Company also had Placement agent services revenue of $1,860,000 and $45,837, and other related revenue of $8,333 and nil, for the years ended December 31, 2024 and 2023, respectively.

 ***Cost of Revenue***

Cost of revenue consists primarily of internal labor cost and related benefits, and other overhead costs that are directly attributable to services provided.

 ****

For the years ended December 31, 2025, 2024 and 2023, cost of revenue was $633,000, $343,083 and $172,948, respectively.

***Gross Profit and Gross Margin***

Our gross profit was $174,500 for the year ended December 31, 2025, representing gross margin of 21.6%. Gross profit was $1,525,250 for the year ended December 31, 2024, representing gross margin of 81.6%. Gross profit was $696,987 for the year ended December 31, 2023, representing gross margin of 80.1%. Our gross margin decreased primarily attributable to increased costs associated with placement agent service for the year ended December 31, 2025.

***Operating Expenses***

 ****

During the years ended December 31, 2025, 2024 and 2023, operating expenses included selling and marketing, payroll and related benefits, professional fees, and other general and administrative expenses.

***Selling and Marketing Expenses***

Selling and marketing expenses totaled $342,816 for the year ended December 31, 2025, as compared to $715,976 for the year ended December 31, 2024, a decrease of $373,160 or 52.1%. During the year ended December 31, 2025, the decrease was primarily attributable to the decreased need of related expenses of investment banking business.

Selling and marketing expenses totaled $715,976 for the year ended December 31, 2024, as compared to $901,319 for the year ended December 31, 2023, a decrease of $185,343 or 20.6%. During the year ended December 31, 2024, the decrease was primarily attributable to the decreased need of related expenses of investment banking business.

***Payroll and Related Benefits***

 ****

Payroll and related benefits totaled $1,909,154 for the year ended December 31, 2025, as compared to $2,082,886 for the year ended December 31, 2024, a decrease of $173,732 or 8.3%. The decrease in payroll and related benefits is primarily due to personnel changes of the Company.

Payroll and related benefits totaled $2,082,886 for the year ended December 31, 2024, as compared to $2,512,781 for the year ended December 31, 2023, a decrease of $429,895 or 17.1%. As a result of the reduction of software development business, the Company decreased the level of spending on software development department.

***Professional Fees***

For the years ended December 31, 2025, 2024 and 2023, Professional Fees consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended**<br>**December 31,**<br>**2025** | **Year Ended**<br>**December 31,**<br>**2024** | **Year Ended**<br>**December 31,**<br>**2023** |
| Audit fees | $305417 | $326498 | $581909 |
| Legal fees | 190982 | 183809 | 230499 |
| Financial consulting fees | 84842 | 166225 | 191255 |
| Others | 43911 | 28667 | 27611 |
|  | $625152 | $705199 | $1031274 |

---

● For the year ended December 31, 2025, audit fees decreased by $21,081, or 6.5%, as compared to the year ended December 31, 2024. The decrease was primarily due to the decrease of annual audit fee. For the year ended December 31, 2024, audit fees decreased by $255,411, or 43.9%, as compared to the year ended December 31, 2023. The decrease was primarily due to the absence of audit fees associated with business acquisitions or material corporate actions during 2024.

● For the year ended December 31, 2025, legal fees increased by $7,173, or 3.9%. The increase was primarily attributable to the Company incurred additional legal expenses in connection with its F-3 Shelf Registration on Nasdaq . For the year ended December 31, 2024, legal fees decreased by $46,690, or 20.3%. The decrease was primarily attributable to the reduced expenditures associated with SEC- related legal matters.

● For the year ended December 31, 2025, financial consulting fees decreased by $81,383, or 49.0%. For the year ended December 31, 2024, financial consulting fees decreased by $25,030, or 13.1%. The decrease was primarily attributable to the less demand for financial consulting in 2025 and 2024 respectively.

● For the year ended December 31, 2025, other miscellaneous items increased by $15,244, or 53.2%. For the year ended December 31, 2024, other miscellaneous items increased by $1,056, or 3.8%. The variances were primarily attributable to the normal fluctuation of the Company's business.

***Other General and Administrative Expenses***

For the years ended December 31, 2025, 2024 and 2023, other general and administrative expenses consisted of the following:

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| | | | |
|:---|:---|:---|:---|
|  | **Year Ended**<br>**December 31,**<br>**2025** | **Year Ended**<br>**December 31,**<br>**2024** | **Year Ended**<br>**December 31,**<br>**2023** |
| Rent and related utilities | $436912 | $468298 | $458422 |
| Technical service fee | 7743 | 7986 | 27363 |
| NASDAQ application and listing fee | 90100 | 85000 | 53981 |
| Travel and entertainment | 176519 | 65386 | 153475 |
| Bad debt expense |  | 164800 |  |
| Regulatory Fee | 56699 | 12398 | 5677 |
| Others | 331665 | 277753 | 393032 |
|  | $1099638 | $1081621 | $1091950 |

---

● For the year ended December 31, 2025, rent and related utilities decreased by $31,386, or 6.7%, as compared to the year ended December 31, 2024. The decrease was primarily attributable to the reduction in rental price in renewed lease agreement. For the year ended December 31, 2024, rent and related utilities increased by $9,876, or 2.2%, as compared to the year ended December 31, 2023. The increase was primarily attributable to the changes in short-term lease.

● For the year ended December 31, 2025, technical service fee decreased by $243, or 3.0%. For the year ended December 31, 2024, technical service fee decreased by $19,377, or 70.8%. The decrease was primarily attributable to demand for technical service reduction in 2025 and 2024.

● For the year ended December 31, 2025, NASDAQ application and listing fees increased by $5,100, or 6.0%, as compared to the year ended December 31, 2024. For the year ended December 31, 2024, NASDAQ application and listing fees increased by $31,019, or 57.5%, as compared to the year ended December 31, 2023. The increase was primarily attributable to the increase of NASDAQ annual listing fees.

● For the year ended December 31, 2025, travel and entertainment expenses increased by $111,133, or 170.0%, as compared to the year ended December 31, 2024. The increase was primarily due to the increase of travel expenses for management. For the year ended December 31, 2024, travel and entertainment expenses decreased by $88,089, or 57.4%, as compared to the year ended December 31, 2023. The decrease was primarily due to the reduction of corporate travel expenditures of the Company's management.

● For the year ended December 31, 2025, 2024 and 2023, bad debt expense was nil, $164,800, and nil, respectively. The Company fully recorded allowance for bad debts of loan receivable from HY Future Limited of $164,800 in 2024.

&nbsp;&nbsp;&nbsp;&nbsp;

● For the year ended December 31, 2025, regulatory fees increased by $44,301, or 357.3%, as compared to the year ended December 31, 2024. For the year ended December 31, 2024, regulatory fees increased by $6,721, or 118.4%, as compared to the year ended December 31, 2023. The regulatory fees mainly consist of SEC filing fee and the fine paid by the Company in connection with a settlement entered into with FINRA in 2022.

● Other general and administrative expenses were primarily comprised of office supplies, internet service fee, and depreciation. For the year ended December 31, 2025, other general and administrative expenses increased by $53,912, or 19.4%, compared to the year ended December 31, 2024. The increase is mainly attributable to higher miscellaneous office expenses in 2025. For the year ended December 31, 2024, other general and administrative expenses decreased by $115,279, or 29.3%, compared to the year ended December 31, 2023. The decrease was primarily attributable to the stabilization of office expenditures at routine operational levels, in contrast to the costs incurred in 2023.

***Loss from Operations***

As a result of the foregoing, for the year ended December 31, 2025, loss from operations amounted to $3,802,260, as compared to $3,060,432 for the year ended December 31, 2024, an increase of $741,828, or 24.2%. For the year ended December 31, 2024, loss from operations amounted to $3,060,432, as compared to $4,840,337 for the year ended December 31, 2023, a decrease of $1,779,905, or 36.8%.

***Other Income (Expense)***

Other income (expense) mainly includes interest income from bank deposits and receivables, interest income from notes receivable, interest expense on convertible promissory notes, impairment on long-term investment and recovery of the impairment, recovery of bad debt allowance on loan receivable, allowance for credit losses on notes receivable, loss on sale of notes receivable, other income (expense), and foreign currency transaction gain (loss).

Other expense, net, totaled $52,264,012 for the year ended December 31, 2025, as compared to other expense of $88,083,323 for the year ended December 31, 2024, a decrease of $35,819,311, which was mainly attributable to a decrease in interest income from notes receivable of $3,190,193 and increase in interest income from bank deposits of $283,952, increase in interest expense from the convertible promissory notes of $6,263,338, decrease in allowance for credit losses on notes receivable of $66,348,938, and increase in loss on sale of notes receivable of $21,292,430.

Other expense, net, totaled $88,083,323 for the year ended December 31, 2024, as compared to other expense of $3,008,043 for the year ended December 31, 2023, an increase of $85,075,280, which was mainly attributable to an increase in interest income from notes receivable of $4,553,242, decrease in interest expense from the convertible promissory notes of $2,272,292, increase in allowance for credit losses on notes receivable of $90,236,242.

***Income Taxes***

We have $8,973 of income tax expense for the year ended December 31, 2025, $24,525 of income tax expense for the year ended December 31, 2024, and nil for the year ended December 31, 2023.

***Net Loss from Continuing Operations***

Our net loss from continuing operations was $56,075,245 for the year ended December 31, 2025, as compared to net loss from continuing operations of $91,168,280 for the year ended December 31, 2024, a decrease of $35,093,035, or 38.5%.

Our net loss from continuing operations was $91,168,280 for the year ended December 31, 2024, as compared to net loss from continuing operations of $7,848,380 for the year ended December 31, 2023, a decrease of $83,319,900, or 1,061.6%.

***Net Income from Discontinued Operations***

On May 16, 2023, the Company acquired 85% of Alpha Mind which is an agency to sell insurance products in PRC, through VIE. On November 22, 2023, the Company entered into an Equity Acquisition Agreement to sell all of the outstanding shares of Alpha Mind to XChange. The transaction was closed on December 28, 2023. On November 18, 2023, the Company disposed of all outstanding securities of MMBD Advisory, MM Capital, MM SPC and Fundex SPC.

As a result, the results of operations for our insurance agency business and investment administrative and advisory business are reported as discontinued operations under the guidance of Accounting Standards Codification 205. Our net income from discontinued operations was $53,267,761 for the year ended December 31, 2023, and $19,003 for the year ended December 31, 2022. The increase in income from discontinued operations was mainly due to gain on sale of discontinued operations of approximately $53.82 million as the Company sold Alpha Mind to XChange for a total consideration of $153,000,000.

***Net Income (Loss)***

As a result of the factors described above, our net loss was $56,075,245 for the year ended December 31, 2025. Our net loss was $91,168,280 for the year ended December 31, 2024. Our net income was $45,419,381 for the year ended December 31, 2023.

***Foreign Currency Translation Adjustment***

Our reporting currency is the U.S. dollar. The functional currency of our parent company, MMTEC, and MM Future, MM Fund, MMBD Trading, HC Securities, MM Global and HAI TEC is the U.S. dollar. The functional currency of Gujia and Haichuan Zhixin is RMB. The financial statements of our subsidiaries whose functional currency is the RMB are translated to U.S. dollars using period end rates of exchange for assets and liabilities, average rate of exchange for revenue and expenses and cash flows, and at historical exchange rates for equity. As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation gain of $20,277 and $69,610 for the years ended December 31, 2025 and 2024 respectively, and a foreign currency translation loss of $138,414 for the year ended December 31, 2023. This non-cash adjustment had the effect of decreasing our reported comprehensive loss in 2025 and 2024, and decreasing our reported comprehensive income in 2023.

***Comprehensive Income (Loss)***

As a result of our foreign currency translation adjustment, we had a comprehensive loss of $56,054,968 and $91,098,670 for the years ended December 31, 2025 and 2024, a comprehensive income of $45,372,059 for the year ended December 31, 2023.

***Foreign Currency Exchange Rate Risk***

We have operations in China. Thus, our revenues and operating results may be impacted by exchange rate fluctuations between RMB and US dollars. For the years ended December 31, 2025, 2024 and 2023 we had unrealized foreign currency translation gain of approximately $20,000 and $70,000, unrealized foreign currency translation loss of approximately $138,000, respectively, because of changes in the exchange rate.

***Inflation***

The effect of inflation on our revenue and operating results was not significant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Liquidity and Capital Resources** 

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. As of December 31, 2025 and 2024, we had cash balance of approximately $8,190,000 and $2,870,000, respectively. A portion of these funds are kept in financial institutions located in China.

Under applicable PRC regulations, foreign invested enterprises, or FIEs, in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, a foreign invested enterprise in China is required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until the cumulative amount of such reserves reach 50% of its registered capital. These reserves are not distributable as cash dividends.

In addition, a majority of our businesses and assets are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People's Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People's Bank of China. Approval of foreign currency payments by the People's Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers' invoices, shipping documents and signed contracts. These currency exchange control procedures imposed by the PRC government authorities may restrict the ability of our PRC subsidiary to transfer its net assets to the Parent Company through loans, advances or cash dividends.

The current PRC Enterprise Income Tax ("EIT") Law and its implementing rules generally provide that a 10% withholding tax applies to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes unless the jurisdiction of incorporation of such enterprises' shareholder has a tax treaty with China that provides for a different withholding arrangement.

The following table sets forth a summary of changes in our working capital from December 31, 2024 to December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | | **December 31, 2024 to** | **December 31, 2024 to** |
|  | | | **December 31, 2025** | **December 31, 2025** |
|  |<br>**December 31,**<br>**2025** |<br>**December 31,**<br>**2024** |<br>**Change** | **Percentage**<br>**Change** |
| **Working capital:** |  |  |  |  |
| Total current assets | $8363307 | $3020546 | $5342761 | 176.9% |
| Total current liabilities | 669202 | 7320692 | (6651490) | (90.9)% |
| Working capital | $7694105 | $(4300146) | $11994251 | (278.9)% |

---

Our working capital increased by $11,994,251 to $7,694,105 as of December 31, 2025 from working capital deficiency of $4,300,146 as of December 31, 2024. The increase in working capital was primarily attributable to an increase in cash and cash equivalents of approximately $5,316,000, a decrease in salary payable of approximately $141,000, an increase in advance from customer of approximately of $100,000, a decrease in accrued liabilities and other payables of approximately $6,518,000.

Because the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the consolidated balance sheets.

**Cash Flows for the Years Ended December 31, 2025, 2024 and 2023**

The following summarizes the key components of our cash flows for the years ended December 31, 2025, 2024 and 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended<br> December 31,**<br> **2025** | **Year Ended<br> December 31,**<br> **2024** | **Year Ended<br> December 31,**<br> **2023** |
| Net cash provided by (used in) operating activities | $(3693655) | $722853 | $(5151508) |
| Net cash provided by (used in) investing activities | 9000000 | 629540 | (86538549) |
| Net cash provided by (used in) financing activities |  | (241750) | 89666750 |
| Effect of exchange rate on cash and cash equivalents | 9916 | (1188) | (27104) |
| Net increase (decrease) in cash and cash equivalents | $5316261 | $1109455 | $(2050411) |

---

Net cash flow used in operating activities for the year ended December 31, 2025 was $3,693,655, which primarily reflected our net loss from continuing operations of $56,075,245, and the changes in operating assets and liabilities primarily consisting of a decrease of operating lease liability of approximately $427,000, a decrease in accrued liabilities and other payables of approximately $123,000, an increase in prepaid expenses and other current assets of approximately $23,000, an increase in advance from customer of $100,000, a decrease in salary payable of $143,000, and adjusted for non-cash items consisting of noncash lease expense $403,000, depreciation of approximately $84,000, allowance for credit losses on notes receivable of approximately $23,887,000, imputed interest expense of approximately $8,686,000, loss on sale of notes receivable of approximately $21,292,000 and interest income of approximately of $1,363,000.

Net cash flow provided by operating activities for the year ended December 31, 2024 was $722,853, which primarily reflected our net loss from continuing operations of $91,168,280, and the changes in operating assets and liabilities primarily consisting of a decrease in accounts receivable of approximately $92,000, a decrease in notes receivable of approximately $5,141,000, a decrease of operating lease liability of approximately $430,000, a decrease in accrued liabilities and other payables of approximately $1,735,000, a decrease in prepaid expenses and other current assets of approximately $105,000, an increase in salary payable of $29,000, and adjusted for non-cash items consisting of noncash lease expense $422,000, depreciation of approximately $47,000, allowance for credit losses on notes receivable of approximately $90,236,000, allowance for bad debt of approximately $165,000, accrued taxes of approximately $25,000, imputed interest expense of approximately $2,272,000 and interest income of approximately of $4,471,000.

Net cash flow used in operating activities for the year ended December 31, 2023 was $5,151,508, which primarily reflected our net loss from continuing operations of $7,848,380, and the changes in operating assets and liabilities primarily consisting of a decrease in accounts receivable of approximately $108,000, offset by a decrease of operating lease liability of approximately $399,000, a decrease in accrued liabilities and other payables of approximately $181,000, an increase in prepaid expenses and other current assets of approximately $241,000, a decrease in salary payable of $63,000, and adjusted for non-cash items consisting of noncash lease expense $396,000, depreciation of approximately $46,000, recovery from bad debts of $550,000, recovery of impairment on long-term investment of approximately $439,000, foreign currency transaction gain of approximately $4,700, and imputed interest expense of $4,200,000, and interest income of approximately $50,000.

Net cash flow provided by investing activities was $9,000,000 for the year ended December 31, 2025 as compared to net cash flow provided by investing activities of $629,540 and net cash flow used in investing activities of $86,538,549 for the year ended December 31, 2024 and 2023. During the year ended December 31, 2025, the Company received $4,000,000 from notes receivable and $5,000,000 from the sale of notes receivable. During the year ended December 31, 2024, the Company made payments for purchases of property and equipment of approximately $5,000, received from loan from third parties of approximately $635,000. During the year ended December 31, 2023, the Company made payments for purchases of property and equipment of approximately $1,000, paid for business acquisition, net of cash required of $87,000,000, offset by proceeds from disposal of property and equipment of approximately $8,000, cash received from return of long-term investment of approximately $439,000, and loan repayment from third parties of approximately $878,000.

Net cash flow provided by or used in financing activities was nil for the year ended December 31, 2025, as compared to net cash flow used in financing activities $241,750 and net cash flow provided by financing activities $89,666,750 for the years ended December 31, 2024 and 2023. During the year ended December 31, 2024, we repaid short-term loan of $241,750 to HuaMei Trading. During the year ended December 31, 2023, we received proceeds from issuance of convertible promissory note of $88,000,000, and received cash from loan payable and other payable of $1,671,750.

Our capital requirements for the next twelve months primarily relate to working capital requirements, including salaries, fees related to third parties' professional services, reduction of accrued liabilities, and the development of business opportunities. These uses of cash will depend on numerous factors including our future sales revenue and our ability to control costs. All funds received have been expended in the furtherance of growing the business. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:

● An increase in working capital requirements to finance our current business;

● The use of capital for the development of business opportunities;

● Addition of administrative and sales personnel as the business grows; and

● The cost of being a public company.

**Initial Public Offering**

On January 7, 2019, we completed the IPO on the NASDAQ Capital Market under the symbol of "MTC". We offered 1,800,000 common shares at $4 per share (22,500 common shares at $320 per share given effect of the 2022 and 2024 Reverse Stock Split). Net proceeds raised by us from the initial public offering amounted to approximately $6,478,801 after deducting underwriting discounts and commissions and other offering expenses. Out of the $6.5 million net proceeds, $500,000 was deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow period of two years following the closing date of January 7, 2019. On January 7, 2019, we sold additional 270,000 common shares at $4 per share (3,375 common shares at $320 per share given effect of the 2022 and 2024 Reverse Stock Split). Net proceeds raised by us amounted to $993,600 after deducting underwriting discounts. As a result, we raised a total of $7,472,401 from the issuance of 2,070,000 (25,875 shares of common stock given effect of the 2022 and 2024 Reverse Stock Split) shares of common stock in January 2019.

Currently, we use our cash to support our operations and to provide working capital for our ongoing operations and obligations. Considering our available cash together with our cash inflow from the IPO, we believe that we will meet our anticipated cash requirements for the next twelve months.

**Registered Direct Offering and Private Placement**

On February 22, 2021 we entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered direct offering of 4,300,000 (53,750 given effect of the 2022 and 2024 Reverse Stock Split) of the Company's common shares, at a purchase price of $3.70 ($296 given effect of the 2022 and 2024 Reverse Stock Split) per share. The Company sold the common shares for aggregate gross proceeds of $15,910,000. The net proceeds from the transactions were $14,637,200, after deducting certain fees due to the placement agent and the Company's transaction expenses, and will be used for working capital and general corporate purposes.

On December 20, 2021 we entered into a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $2,000,000 investment in the Company in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase 5,000,000 (62,500 given effect of the 2022 and 2024 Reverse Stock Split) common shares of the Company at a purchase price of $0.40 ($32 given effect of the 2022 and 2024 Reverse Stock Split) per share. The proceeds of the transaction were $2.0 million before deducting fees and other expenses. The Company currently intends to use the net proceeds from the transaction for growth capital and general working capital purposes.

On August 10, 2022, the Company entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified terms and conditions, the Company may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, from time to time during the term of the Purchase Agreement. On August 12, 2022, the Company amended and restated the common stock purchase agreement with VG Master Fund SPC which was initially entered into on August 10, 2022. Under the Purchase Agreement, subject to specified terms and conditions, the Company may, from time to time during the term of the Purchase Agreement, sell to Investor up to the lesser of (a) $5.5 million of shares of common stock, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, and (b) the maximum amount of securities the Company is permitted to issue under its existing shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for entering into the Purchase Agreement, the Company issued 53,334 (6,667 given effect of the 2024 Reverse Stock Split) shares of common stock to Investor as consideration for Investor's commitment to. As of December 31, 2022, the Company sold the 1,050,000 (131,250 given effect of the 2024 Reverse Stock Split) common shares for aggregate gross proceeds of $1,256,640, and will be used for working capital and general corporate purposes.

On August 24, 2022, the Company's shelf registration statement for up to $300,000,000 in securities was declared effective by the SEC. Under this shelf registration statement, the Company may offer and sell from time to time up to an aggregate of $300,000,000 of common shares (issued separately or upon exercise of warrants), warrants, debt securities, and units of the Company's securities.

On October 29, 2022, the Company entered into a Securities Purchase Agreement ("Agreement 1") with a purchaser. Pursuant to Agreement 1, the Company sold to the purchaser 400,000 (50,000 given effect of the Reverse Stock Split) shares of common stock for a consideration of $236,000 on December 3, 2022.

On November 23, 2022, the Company entered into a Securities Purchase Agreement ("Agreement 2") with a purchaser. Pursuant to Agreement 2, the Company sold to this purchaser 500,000 (62,500 given effect of the 2024 Reverse Stock Split) shares of common stock for a consideration of $257,500 on December 7, 2022.

On February 22, 2023, the Company entered into a securities purchase agreement ("Agreement 3") pursuant to which the Company issued an unsecured senior convertible promissory note to a non-U.S. investor (the "Investor"). The Note will mature in 24 months after the effective date of the Note. The Note has an original principal amount of $40,000,000 and the Investor paid a purchase price of $32,000,000, reflecting an original issue discount of 20%. The transaction contemplated under the Agreement was closed on February 22, 2023.

On February 24, 2023, the Company received a conversion notice from the Investor, and in accordance with the terms of the Note, the Company issued an aggregate of 80,000,000 (10,000,000 given effect of the 2024 Reverse Stock Split) ordinary shares, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, to the Investor and its designees at a conversion price of $0.50 ($4 given effect of the 2024 Reverse Stock Split) per share, which represents the conversion floor price. The Investor waived the interest under the Note in connection with the full conversion of the Note. The Company fulfilled all its obligations under the Note upon conversion.

On March 31, 2023, the Company commenced a registered direct offering of Senior Convertible Promissory Notes with an institutional investor pursuant to a securities purchase agreement of the same date. Pursuant to the Agreement the Purchaser may purchase Senior Convertible Promissory Notes in the aggregate original principal amount of not more than $70 million. The Notes will mature on the second anniversary of their issuance date, or March 31, 2025. The Notes have an original issue discount of 20%, resulting in an aggregate purchase price for the Offering of up to $56 million assuming the full purchase of Notes under the Agreement. On May 11, 2023, the Purchaser converted $2.82 million of outstanding balance of the note into ordinary shares, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, at conversion price of $0.705 ($5.64 given effect of the 2024 Reverse Stock Split) per share, which represents 4,000,000 (500,000 given effect of the 2024 Reverse Stock Split) ordinary shares. On September 29, 2023, the Purchaser converted $30 million of outstanding balance of the note into ordinary shares, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, at conversion price of $0.30 ($2.4 given effect of the 2024 Reverse Stock Split) per share, which represents 100,000,000 (12,500,000 given effect of the 2024 Reverse Stock Split) ordinary shares. On August 26, 2024, the Company completed the conversion of $705,000 of outstanding balance of the note into ordinary shares, at a conversion price of $0.30 ($2.4 given effect of the 2024 Reverse Stock Split) per share, which represents 2,350,000 (293,750 given effect of the 2024 Reverse Stock Split) ordinary shares. On December 26, 2024, the Company entered into an agreement with the Purchaser (the "Extension Agreement") pursuant to which the Company and the Purchaser mutually agreed to extend the term of the Notes to six years from the issuance date, or March 31, 2029, and to amend the interest rate of the Notes to 2% per annum. The other provisions of the Notes remain unchanged. On September 19, 2025, the Company completed the conversion of $36,475,000 of outstanding balance of the note and 7,495,960 accrued interests payable into ordinary shares, at a conversion price of $0.591 per share, which represents 74,400,947 ordinary shares.

On May 16, 2023, the Company entered into an Equity Acquisition Agreement (the "Purchase Agreement") with Alfa Crest Investment Limited, a British Virgin Islands company ("Alfa Crest"), CapitoLabs Limited, a British Virgin Islands company ("CapitoLabs", and together with Alfa Crest, the "Sellers") and Alpha Mind. Pursuant to the Purchase Agreement, the Company acquired an 85% ownership stake in Alpha Mind for an aggregate purchase price of $99,650,000 (the "Purchase Price"). At the closing of the transaction, which occurred on June 7, 2023, the Company paid the Purchase Price to the Sellers as follows: (a) $1.0 million credited from an earlier good faith deposit made by the MMTEC to the Sellers on May 8, 2023, (b) $91,650,000 was paid by MMTEC to the Sellers in cash, and (c) remaining $7.0 million was paid by MMTEC to the Sellers in the form of a convertible promissory note. In accordance with the Purchase Agreement, the Company issued to the sellers a senior convertible promissory note (the "Note") for the remaining $7.0 million of the Purchase Price. The Note accrued interest at 1% per annum and has a 24-month maturity. The Note is convertible at any time and the conversion price will be calculated with a discount of fifty-four percent (54%) to the lowest closing price of the last twenty (20) trading days immediately prior to the date of the conversion notice. On June 14, 2023, the sellers converted $3,950,000 of outstanding balance of the note into ordinary shares, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, at a conversion price of $0.395 ($3.16 given effect of the 2024 Reverse Stock Split) per share, which represents 10,000,000 (1,250,000 given effect of the 2024 Reverse Stock Split) ordinary shares.

On July 13, 2022, the Company approved a 1-for-10 reverse stock split of the Company's authorized and issued and outstanding shares of common stock, par value $0.001 per share (the "2022 Reverse Stock Split"). On December 18, 2024, the Company approved a 1-for-8 reverse stock split of the Company's authorized and issued and outstanding shares of common stock, par value $0.01 per share (the "2024 Reverse Stock Split"). We have retroactively restated all share and per share data for all of the periods presented pursuant to ASC 260 to reflect the 2022 and 2024 Reverse Stock Split.

As a result, the Company has 99,587,811 ordinary shares issued and outstanding as of December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Research and development, patents and licenses** 

 

Expenditures for research and product development costs are expensed as incurred.

For the years ended December 31, 2025, 2024 and 2023, research and development expenses were $40,215, $73,285, and $363,958, respectively, included in "Cost of revenue", "Payroll and related benefits" and "Other general and administrative" on the accompanying consolidated income statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Trend Information** 

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition or results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Critical Accounting Policies and Estimates** 

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements. Please refer to **NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** of our consolidated financial statements for details.

**Use of Estimates**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Directors and senior management** 

The following table sets forth our executive officers and directors, their ages and the positions held by them:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Xiangdong Wen <sup>(1) (2)</sup> | 41 Male | Chairman of the Board and Chief Executive Officer |
| Min Kong <sup>(1) (4)</sup> | 37 Male | Chief Financial Officer, Director |
| Qingshun Meng <sup>(1) (3) (5) (6) (7)</sup> | 66 Male | Independent Director |
| Dan Fu <sup>(1) (4) (5) (6) (7)</sup> | 39 Female | Independent Director |
| Xiaofei Ren <sup>(1) (3) (5) (6) (7)</sup> | 54 Female | Independent Director, Chairman of Audit Committee |

---

(1) The individual's business address is c/o Gujia (Beijing) Technology Co., Ltd **.,** AF, 16/F, Block B, Jiacheng Plaza, 18 Xiaguangli, Chaoyang District, Beijing, 100027 China.

(2) Class C director whose term expires at the 2028 succeeding annual meeting of shareholders.

(3) Class B director whose term expires at the 2027 succeeding annual meeting of shareholders.

(4) Class A director whose term expires at the 2026 annual meeting of shareholders.

(5) Member of audit committee.

(6) Member of compensation committee.

(7) Member of nominating committee.

***Xiangdong Wen*** is the resident of Hong Kong, he has served as the Chairman of the Board of MMTEC since January 2018 and has served as the Chief Executive Officer of MMTEC since June 2020. Mr. Wen founded Gujia in 2015 and was Gujia's Chief Executive Officer between June 2015 and January 2016. Mr. Wen has also served as Gujia's executive director since June 2015. Between May 2012 and May 2015, Mr. Wen served as Chief Executive Officer of Jiazi Investment Co., Ltd, an investment management company. Between February 2015 and June 2015, Mr. Wen served as Chief Operating Officer of Beijing Dongfangjuhe Technology Co., Ltd, providing technology solutions to the broker/dealer industry. Mr. Wen holds a Bachelor's degree in business management from Communication University of China.

***Min Kong*** is the resident of Hong Kong, he has served as the Chief Financial Officer of MMTEC since January 2018 and the Director of MMTEC since April 2023. Between June 2015 and January 2018, Mr. Kong served as the Institutional Business Director of Gujia. Between February 2014 and February 2015, Mr. Kong served as Data Analyst Manager of American Dental Solutions, LLC. Between April 2012 and January 2013, Mr. Kong served as Marketing Manager of Yiwu Yi Jue Trading Company. Mr. Kong received his MBA degree from Missouri State University.

***Qingshun Meng*** has served as an Independent Director of MMTEC since April 2018. Mr. Meng has served as management professor at the Communication University of China since 2004. Mr. Meng holds a Bachelor of Science degree in Corporate Management from Shandong Institute of Mining and Technology, and a Bachelor of Science degree in Mining Engineering from Liaoning Technical University. Mr. Meng was member of the comprehensive brand management expert committee of China Association for Quality.

**Dan Fu** has served as the Marketing Department Manager at Beijing Yingding Education Technology Co., Ltd. from July 2015 to July 2016. Ms. Fu then served as Brand Department Manager at Baoding Huazhong Group from August 2016 to March 2021. York at Stony Brook (1989), and a Master of Business Administration degree from Baruch College (CUNY, 1992).

**Xiaofei Ren** has served as an Independent Director of MMTEC since March 2024. Ms. Ren holds a Masters in Economics from Central University of Finance and Economics, a Bachelor of Laws from Zhenzhou University, and a degree in Accounting from Henan University of Economics and Law.

*Limitation on Liability and Other Indemnification Matters*

The BVI Act does not limit the extent to which Memorandum and Articles of Association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Memorandum and Articles of Association permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise from dishonesty of such directors or officers willful default of fraud. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Compensation** 

**Executive Compensation**

The following table shows the annual compensation paid by us for the years ended December 31, 2025, 2024 and 2023:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Name/principal position** | <br>**Year** |<br>**Salary** | **Equity**<br>**Compensation** | **All Other**<br>**Compensation** | **Total**<br>**Paid** |
| Xiangdong Wen, CEO | 2023 | $320329 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $7929 | $328258 |
|  | 2024 | $186594 | $- | $- | $186594 |
|  | 2025 | $141527 | $- | $- | $141527 |
| Min Kong, CFO | 2023 | $108310 | $- | $8934 | $117244 |
|  | 2024 | $107320 | $- | $- | $107320 |
|  | 2025 | $107541 | $- | $8989 | $116530 |

---

Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate an employment agreement in the absence of cause, then we are obligated to pay the employee one month's salary for each year we have employed the employee. We are, however, permitted to terminate an employee for cause without penalty to our company, where the employee has committed a crime or the employee's actions or inactions have resulted in a material adverse effect to us.

**Director Compensation** 

All directors hold office until the next annual meeting of shareholders at which their respective class of directors is re-elected and until their successors have been duly elected and qualified. There are no family relationships among our directors or executive officers. Officers are elected by and serve at the discretion of the Board of Directors. Employee directors do not receive any compensation for their services. Non-employee directors are entitled to receive $10,000 per year for serving as directors and may receive option grants from our company. In addition, non-employee directors are entitled to receive compensation for their actual travel expenses for each Board of Directors meeting attended. We have entered into independent director agreements with our directors which agreements set forth the terms and provisions of their engagement.

None of our officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more officers serving as a member of our board of directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Board Practices** 

*Composition of Board; Risk Oversight*

Our Board presently consists of seven directors. Pursuant to our Memorandum and Articles of Association, our officers will be elected by and serve at the discretion of the Board. A director will be removed from office automatically if, among other things, the director becomes bankrupt or makes any arrangement with his creditors, or becomes physically or mentally incapable of acting as director. Except as noted above, there are no family relationships between any of our executive officers and directors. Officers are elected by, and serve at the discretion of, the Board. Our Board shall hold meetings on at least a quarterly basis.

As a smaller reporting company under the NASDAQ rules we are only required to maintain a Board of Directors comprised of at least 50% independent directors, and an audit committee of at least two members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Securities Exchange Act of 1934. There are no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us in a general meeting. There are no other arrangements or understandings pursuant to which our directors are selected or nominated.

Our Board plays a significant role in our risk oversight. The Board makes all relevant Company decisions. As such, it is important for us to have our Chief Executive Officer serve on the board as he plays key roles in the risk oversight of our company. As a smaller reporting company with a small Board of Directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.

*Duties of Directors*

Under BVI law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our Memorandum and Articles of Association. We have the right to seek damages if a duty owed by our directors is breached. A director is not required to hold shares as a qualification to office. The functions and powers of our Board include, among others:

● appointing officers and determining the term of office of the officers,

● authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable,

● exercising the borrowing powers of the company and mortgaging the property of the company,

● executing checks, promissory notes and other negotiable instruments on behalf of the company, and

● maintaining or registering a register of mortgages, charges or other encumbrances of the company.

*Director Independence*

Our board has reviewed the independence of our directors, applying the NASDAQ independence standards. Based on this review, the board determined that each of Qingshun Meng, Dan Fu and Xiaofei Ren are "independent" within the meaning of the NASDAQ rules. In making this determination, our board considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our board deemed relevant in determining their independence. As required under applicable NASDAQ rules, we anticipate that our independent directors will meet on a regular basis as often as necessary to fulfill their responsibilities, including at least annually in executive session without the presence of non-independent directors and management.

*Board Committees*

Currently, three committees have been established under the board: the Audit Committee, the Compensation Committee and the Nominating Committee.

The Audit Committee is responsible for overseeing the accounting and financial reporting processes of our company and audits of the financial statements of our company, including the appointment, compensation and oversight of the work of our independent auditors. The Compensation Committee of the Board of Directors reviews and makes recommendations to the board regarding our compensation policies for our officers and all forms of compensation, and also administers our incentive compensation plans and equity-based plans (but our board retains the authority to interpret those plans). The Nominating Committee of the board is responsible for the assessment of the performance of the Board, considering and making recommendations to the board with respect to the nominations or elections of directors and other governance issues. The nominating committee considers diversity of opinion and experience when nominating directors.

**Audit Committee**

The Audit Committee will be responsible for, among other matters:

● appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm,

● discussing with our independent registered public accounting firm the independence of its members from its management,

● reviewing with our independent registered public accounting firm the scope and results of their audit,

● approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm,

● overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC,

● reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements,

● coordinating the oversight by our Board of Directors of our code of business conduct and our disclosure controls and procedures,

● establishing procedures for the confidential and or anonymous submission of concerns regarding accounting, internal controls or auditing matters, and

● reviewing and approving related-party transactions.

Our Audit Committee consists of Xiaofei Ren (Chair), Qingshun Meng and Dan Fu. Our board has affirmatively determined that each of the members of the Audit Committee meets the definition of "independent director" for purposes of serving on an Audit Committee under Rule 10A-3 of the Exchange Act and NASDAQ rules. In addition, our Board of Directors has determined that Ms. Xiaofei Ren qualifies as an "audit committee financial expert" as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules.

**Compensation Committee**

The Compensation Committee will be responsible for, among other matters:

● reviewing and approving, or recommending to the Board of Directors to approve the compensation of our CEO and other executive officers and directors,

● reviewing key employee compensation goals, policies, plans and programs,

● administering incentive and equity-based compensation,

● reviewing and approving employment agreements and other similar arrangements between us and our executive officers, and

● appointing and overseeing any compensation consultants or advisors.

Our Compensation Committee consists of Dan Fu (Chair), Xiaofei Ren and Qingshun Meng. Our board has affirmatively determined that each of the members of the Compensation Committee meets the definition of "independent director" for purposes of serving on Compensation Committee under NASDAQ rules.

**Nominating Committee**

The Nominating Committee will be responsible for, among other matters:

● selecting or recommending for selection candidates for directorships,

● evaluating the independence of directors and director nominees,

● reviewing and making recommendations regarding the structure and composition of our Board of Directors and the Board of Directors committees,

● developing and recommending to the Board of Directors corporate governance principles and practices;

● reviewing and monitoring our company's Code of Business Conduct and Ethics, and

● overseeing the evaluation of our company's management.

Our Nominating Committee consists of consists of Qingshun Meng (Chair), Dan Fu and Xiaofei Ren. Our board has affirmatively determined that each of the members of the Nominating Committee meets the definition of "independent director" for purposes of serving on a Nominating Committee under NASDAQ rules.

*Code of Business Conduct and Ethics*

Our Board of Directors has adopted a code of business conduct and ethics that applies to our directors, officers and employees. A copy of this code is available on our website. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions.

*Interested Transactions*

 

A director may vote, attend a Board of Directors meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested. A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into. A general notice or disclosure to the Board or otherwise contained in the minutes of a meeting or a written resolution of the Board or any committee of the Board that a director is a shareholder, director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any particular transaction.

*Remuneration and Borrowing*

The directors may receive such remuneration as our Board may determine from time to time. Each director is entitled to be repaid or prepaid for all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our Board or committees of our Board or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors. Our Board may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party.

*Qualification*

 

A director is not required to hold shares as a qualification to office.

*Limitation on Liability and Other Indemnification Matters*

 

BVI law does not limit the extent to which a company's Memorandum and Articles of Association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the BVI courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Under our Memorandum and Articles of Association, we may indemnify our directors, officers and liquidators against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigative proceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled to indemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings, they must have had no reasonable cause to believe their conduct was unlawful. Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable as a matter of United States law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Employees** 

The table below provides information as to the total number of employees at the end of the last three fiscal years. We have no contracts or collective bargaining agreements with labor unions and have never experienced work stoppages due to labor dispute. We consider our relations with our employees to be good.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
| Number of Employees |  | 42 |  | 34 |  | 31 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Share Ownership** 

See Item 7 below.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Major shareholders** 

The following table sets forth certain information regarding beneficial ownership of our shares by each person who is known by us to beneficially own more than 5% of our shares. The table also identifies the share ownership of each of our directors, each of our named executive officers, and all directors and officers as a group. Except as otherwise indicated, the shareholders listed in the table have sole voting and investment powers with respect to the shares indicated. Our major shareholders do not have different voting rights than any other holder of our shares.

We have determined beneficial ownership in accordance with the rules of the SEC. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to subscribe for within 60 days of April 2, 2026. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power or the power to receive the economic benefit with respect to all common shares that they beneficially own, subject to applicable community property laws. None of the stockholders listed in the table are a broker-dealer or an affiliate of a broker-dealer. None of the stockholders listed in the table are located in the United States and none of the common shares held by them are located in the United States. Applicable percentage ownership is based on 99,587,811 common shares outstanding as of April 2, 2026. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o MM Future Technology Limited. Room 2302, 23rd Floor, 308 Des Voeux Road Central, Sheung Wan, Hong Kong.

---

| | | |
|:---|:---|:---|
| | **Beneficial Ownership** | **Beneficial Ownership** |
| <br>**Name of Beneficial Owner** | **Common Shares** | **Percentage** |
| Xiangdong Wen \* <sup>(1)</sup> | 40950 | 0.0% |
| Min Kong \* | 4375 | 0.0% |
| Qingshun Meng \* |  | \*\* |
| Dan Fu \* |  | \*\* |
| Xiaofei Ren \* |  | \*\* |
| **All officers and directors as a group (5 persons)** | **45325** | **0.0%** |
| **5% or greater beneficial owners** |  | \*\*% |
| **5% or greater beneficial owners as a group** | **-** | \*\*% |

---

\* Officer and/or director of our company

\*\* Less than 1%

(1) Represent (i) 38,700 shares owned by Mr. Wen and (ii) 2,250 shares owned by MMBD Information Technology Limited, of which Mr. Wen holds 33.33%. This takes into account the 1-for-10 reverse stock split on the Company's common stock that was effectuated on July 13, 2022, and 1-for-8 reverse stock split on the Company's common stock that was effected on December 18, 2024. MMBD Information Technology Limited, a Hong Kong corporation with the mailing address of Rm 18D 27/F Ho King Comm. Ctr., 2-16 Fayuen St. Mongkok, Hong Kong 999077 China.

As of April 2, 2026, there were 62 registered holders of record of our common shares, based upon information received from our stock transfer agent. However, this number does not include beneficial owners whose shares were held of record by nominees or broker dealers. The number of individual holders of record is based exclusively upon our share register and does not address whether a share or shares may be held by the holder of record on behalf of more than one person or institution who may be deemed to be the beneficial owner of a share or shares in our company. To our knowledge, no other shareholder beneficially owns more than 5% of our shares. Our company is not owned or controlled directly or indirectly by any government or by any corporation or by any other natural or legal person severally or jointly. Our major shareholders do not have any special voting rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Related Party Transactions** 

**Due to Related Parties**

As of December 31, 2025 and 2024, balances of due to related parties were $0.

**Shareholders' Contribution** 

During the years ended December 31, 2025, 2024 and 2023, there were no shareholder contributions to the Company for working capital needs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Interests of Experts and Counsel** 

Not required.

**ITEM 8. FINANCIAL INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Consolidated Statements and Other Financial Information.** 

See Item 18 for our audited consolidated financial statements.

**Legal Proceedings**

In the normal course of business, MM Global is engaged in various trading and brokerage activities on a principal and agency basis through a clearing broker. As a regulated FINRA broker-dealer MM Global is subject to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA rules may have occurred. As such, MM Global has responded to FINRA inquires and continues to be subject to an open matter. MM Global submits Letter of Acceptance, Waiver, and Consent for the purpose of proposing a settlement of the alleged rule violations on September 9, 2022. Without admitting or denying the findings by FINRA related to Case Number 2019062623, the Company was censured, fined $450,000. Two individuals' registration capacities were suspended for 45 days, fined $20,000 and $5,000 respectively. The Company elected to pay the fine via a 36 months' installment plan with $38,250 installment fee. As of December 31, 2025, all the Company's fine has been fully paid.

Other than MM Global, we are currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse effect on our business, financial condition, results of operations or cash flows.

**Dividend Policy**

The holders of shares of our common shares are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiary and other holdings and investments. In addition, the operating companies may, from time to time, be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions. In the event of our liquidation, dissolution or winding up, holders of our common shares are entitled to receive, ratably, the net assets available to shareholders after payment of all creditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Significant Changes** 

Except as disclosed elsewhere in this Annual Report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this Annual Report.

**ITEM 9. THE OFFER AND LISTING**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Offer and Listing Details** 

Our shares have been listed on the NASDAQ Stock Market under the symbol "MTC" since January 8, 2019, following the completion of our initial public offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Plan of Distribution** 

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Markets** 

Our shares have been listed on the NASDAQ Stock Market under the symbol "MTC" since January 8, 2019 following the completion of our initial public offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Selling Shareholders** 

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Dilution** 

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Expenses of the Issue** 

Not Applicable.

**ITEM 10. ADDITIONAL INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Share Capital** 

Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Memorandum and Articles of Association** 

The information required by Item 10.B of Form 20-F is included in the section titled "Description of Share Capital" in our Registration Statement on Form F-1 initially filed with the SEC on October 22, 2018, and subsequently updated (File No.: 333-227934), which section is incorporated herein by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Material Contracts** 

The information required by Item 10.B of Form 20-F is included in the sections titled "Our Business," "Directors and Executive Officers," "Related Party Transactions," and "Underwriting" in our Registration Statement on Form F-1 initially filed with the SEC on October 22, 2018, and subsequently updated (File No.: 333-227934), which section is incorporated herein by reference.

On August 10, 2022, the Company entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified terms and conditions, the Company may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, from time to time during the term of the Purchase Agreement. On August 12, 2022, the Company amended and restated the common stock purchase agreement with VG Master Fund SPC which was initially entered into on August 10, 2022. Under the Purchase Agreement, subject to specified terms and conditions, the Company may, from time to time during the term of the Purchase Agreement, sell to Investor up to the lesser of (a) $6.0 million of shares of common stock, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, and (b) the maximum amount of securities the Company is permitted to issue under its existing shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for entering into the Purchase Agreement, the Company issued 53,334 (6,667 given effect of the 2024 Reverse Stock Split) shares of common stock to Investor as consideration for Investor's commitment to. As of December 31, 2022, the Company sold the 1,050,000 (131,250 given effect of the 2024 Reverse Stock Split) common shares for aggregate gross proceeds of $1,256,640, and will be used for working capital and general corporate purposes.

On May 16, 2023, the Company entered into an Equity Acquisition Agreement (the "Purchase Agreement") with Alfa Crest Investment Limited, a British Virgin Islands company ("Alfa Crest"), CapitoLabs Limited, a British Virgin Islands company ("CapitoLabs", and together with Alfa Crest, the "Sellers") and Alpha Mind. Pursuant to the Purchase Agreement, the Company acquired an 85% ownership stake in Alpha Mind for an aggregate purchase price of $99,650,000 (the "Purchase Price"). At the closing of the transaction, which occurred on June 7, 2023, the Company paid the Purchase Price to the Sellers as follows: (a) $1.0 million credited from an earlier good faith deposit made by the MMTEC to the Sellers on May 8, 2023, (b) $91,650,000 was paid by MMTEC to the Sellers in cash, and (c) remaining $7.0 million was paid by MMTEC to the Sellers in the form of a convertible promissory note. In accordance with the Purchase Agreement, the Company issued to the sellers a senior convertible promissory note (the "Note") for the remaining $7.0 million of the Purchase Price. The Note accrued interest at 1% per annum and has a 24-month maturity. The Note is convertible at any time and the conversion price will be calculated with a discount of fifty-four percent (54%) to the lowest closing price of the last twenty (20) trading days immediately prior to the date of the conversion notice. On June 14, 2023, the sellers converted $3,950,000 of outstanding balance of the note into ordinary shares, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, at a conversion price of $0.395 ($3.16 given effect of the 2024 Reverse Stock Split) per share, which represents 10,000,000 (1,250,000 given effect of the 2024 Reverse Stock Split) ordinary shares.

On November 22, 2023, the Company entered into an Equity Acquisition Agreement with BCI, XChange and Alpha Mind. Pursuant to the Purchase Agreement, the Company sold all of its interests in Alpha Mind to XChange for $153 million on December 28, 2023, which was paid in the form of a secured promissory note (the "XChange Note"). The XChange Note is secured by all of the issued and outstanding equity of Alpha Mind as well as all of the assets of Alpha Mind and its subsidiaries. On April 26, 2024, the Company entered into a "Share Transfer Commitment Letter for Secured Promissory Note" with XChange (the "Commitment Letter"). Pursuant to the Commitment Letter, XChange reaffirmed its promise to pay the principal sum of $153,000,000 under the XChange Note, together with interest on the unpaid note on or prior to June 30, 2024 (the "Maturity Date"). In addition, pursuant to the Commitment Letter if XChange fails to pay the amounts due under the XChange Note, the Company will have the right to convert the unpaid principal and interest to shares of XChange at a discount of between 20% and 70% of the market price of such shares. The Maturity Date of the XChange Note was extended to December 31, 2025, with a provision that if any balance remains outstanding on that date, it will automatically extend to the end of the following year, pursuant to the Amendments to Secured Promissory Notes entered into by the Company and XChange dated June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Exchange controls** 

**BVI Exchange Control**

Under BVI law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to nonresident holders of our shares.

**China Exchange Control**

***Foreign Currency Exchange***

 ****

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations (1996), as amended on August 5, 2008, the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996) and the Interim Measures on Administration on Foreign Debts (2003). Under these regulations, Renminbi is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for most capital account items, such as direct investment, loans, repatriation of investment and investment in securities outside China, unless the prior approval of SAFE or its local counterparts is obtained. In addition, any loans to an operating subsidiary in China that is a foreign invested enterprise, cannot, in the aggregate, exceed the difference between its respective approved total investment amount and its respective approved registered capital amount. Furthermore, any foreign loan must be registered with SAFE or its local counterparts for the loan to be effective. Any increase in the amount of the total investment and registered capital must be approved by the China Ministry of Commerce or its local counterpart. We may not be able to obtain these government approvals or registrations on a timely basis, if at all, which could result in a delay in the process of making these loans.

The dividends paid by the subsidiary to its shareholder are deemed shareholder income and are taxable in China. Pursuant to the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), foreign-invested enterprises in China may purchase or remit foreign exchange, subject to a cap approved by SAFE, for settlement of current account transactions without the approval of SAFE. Foreign exchange transactions under the capital account are still subject to limitations and require approvals from, or registration with, SAFE and other relevant Chinese governmental authorities.

***Circular 37***

 ****

On July 4, 2014, SAFE issued Circular 37, which became effective as of July 4, 2014. According to Circular 37, Chinese residents shall apply to SAFE and its branches for going through the procedures for foreign exchange registration of overseas investments before contributing the domestic assets or interests to a SPV. An amendment to registration or filing with the local SAFE branch by such Chinese resident is also required if the registered overseas SPV's basic information such as domestic individual resident shareholder, name, operating period, or major events such as domestic individual resident capital increase, capital reduction, share transfer or exchange, merger or division has changed. Although the change of overseas funds raised by overseas SPV, overseas investment exercised by overseas SPV and non-cross-border capital flow are not included in Circular 37, we may be required to make foreign exchange registration if required by SAFE and its branches.

Moreover, Circular 37 applies retroactively. As a result, Chinese residents who have contributed domestic assets or interests to a SPV, but failed to complete foreign exchange registration of overseas investments as required prior to implementation of Circular 37, are required to send a letter to SAFE and its branches for explanation. Under the relevant rules, failure to comply with the registration procedures set forth in Circular 37 may result in receiving a warning from SAFE and its branches, and may result in a fine of up to RMB 300,000 for an organization or up to RMB 50,000 for an individual. In the event of failing to register, if capital outflow occurred, a fine up to 30% of the illegal amount may be assessed.

Chinese residents who control our Company are required to register with SAFE in connection with their investments in us. If we use our equity interest to purchase the assets or equity interest of a Chinese company owned by Chinese residents in the future, such Chinese residents will be subject to the registration procedures described in Circular 37.

***Regulations on Offshore Parent Holding Companies' Direct Investment in and Loans to Their PRC Subsidiaries***

An offshore company may invest equity in a Chinese company, which will become the Chinese subsidiary of the offshore holding company after investment. Such equity investment is subject to a series of laws and regulations generally applicable to any foreign-invested enterprise in China, which include the Wholly Foreign-Owned Enterprise Law, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Contractual Joint Venture Enterprise Law, all as amended from time to time, and their respective implementing rules; the Administrative Provisions on Foreign Exchange in Domestic Direct Investment by Foreign Investors; and the Notice of the State Administration on Foreign Exchange on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment.

Under the aforesaid laws and regulations, the increase of the registered capital of a foreign-invested enterprise is subject to the prior approval by the original approval authority of its establishment. In addition, the increase of registered capital and total investment amount shall both be registered with SAIC, Ministry of Commerce and SAFE.

Shareholder loans made by offshore parent holding companies to their Chinese subsidiaries are regarded as foreign debts in China for regulatory purpose, which is subject to a number of Chinese laws and regulations, including the Chinese Foreign Exchange Administration Regulations, the Interim Measures on Administration on Foreign Debts, the Tentative Provisions on the Statistics Monitoring of Foreign Debts and its implementation rules, and the Administration Rules on the Settlement, Sale and Payment of Foreign Exchange.

Under these regulations, the shareholder loans made by offshore parent holding companies to their Chinese subsidiaries shall be registered with SAFE. Furthermore, the total amount of foreign debts that can be borrowed by such Chinese subsidiaries, including any shareholder loans, shall not exceed the difference between the total investment amount and the registered capital amount of the Chinese subsidiaries, both of which are subject to the governmental approval.

 ****

***Regulation of Dividend Distribution***

The principal regulations governing the distribution of dividends by foreign holding companies include the Company Law of China (1993), as amended in 2013, the Foreign Investment Enterprise Law (1986), as amended in 2000, and the Administrative Rules under the Foreign Investment Enterprise Law (1990), as amended respectively in 2001 and 2014.

Under these regulations, wholly foreign-owned investment enterprises in China may pay dividends only out of their retained profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, wholly foreign-owned investment enterprises in China are required to allocate at least 10% of their respective retained profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends, and a wholly foreign-owned enterprise is not permitted to distribute any profits until losses from prior fiscal years have been offset.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Taxation** 

The following sets forth the material BVI, Chinese, Hong Kong and U.S. federal income tax matters related to an investment in our common shares. It is directed to U.S. Holders (as defined below) of our common shares and is based on laws and relevant interpretations thereof in effect as of the date of this report, all of which are subject to change. This description does not deal with all possible tax consequences relating to an investment in our common shares, such as the tax consequences under state, local and other tax laws. Ogier, our counsel as to the BVI law, advised us on the BVI taxation matters and their opinion is set forth in the discussion below. The following brief description applies only to U.S. Holders (defined below) that hold common shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the tax laws of the United States in effect as of the date of this report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below. The brief description below of the U.S. federal income tax consequences to "U.S. Holders" will apply to you if you are a beneficial owner of common shares and you are, for U.S. federal income tax purposes:

● an individual who is a citizen or resident of the United States,

● a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia,

● an estate whose income is subject to U.S. federal income taxation regardless of its source, or

● a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

*BVI Taxation*

The company and all distributions, interest and other amounts paid by the company in respect of the common shares of the company to persons who are not resident in the BVI are exempt from all provisions of the Income Tax Ordinance in the BVI.

No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by persons who are not resident in the BVI with respect to any common shares, debt obligations or other securities of the company.

All instruments relating to transactions in respect of the common shares, debt obligations or other securities of the company and all instruments relating to other transactions relating to the business of the company are exempt from payment of stamp duty in the BVI provided that they do not relate to real estate in the BVI.

There are currently no withholding taxes or exchange control regulations in the BVI applicable to the company or its shareholders.

*PRC Enterprise Income Tax*

 

According to the Enterprise Income Tax Law of PRC (the "EIT Law"), which was promulgated on March 16, 2007, last amended in February 2017 and became effective as of January 1, 2008, the income tax for both domestic and foreign-invested enterprises is at a uniform rate of 25%. The Regulation on the Implementation of Enterprise Income Tax Law of the PRC (the "EIT Rules") was promulgated on December 6, 2007 and became effective on January 1, 2008. On April 14, 2008, the Chinese Ministry of Science and Technology, Ministry of Finance and State Administration of Taxation enacted the Administrative Measures for Certifying High and New Technology Enterprises (the "Certifying Measures"), which retroactively became effective on January 1, 2008 and was amended on January 29, 2016. In the years ended December 31, 2020 and 2019, Gujia was recognized as small low-profit enterprises and received a preferential income tax rate of 5%. Under the EIT Law, an enterprise established outside of China with a "de facto management body" within China is considered a "resident enterprise", which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation rules of the EIT Law define "*de facto* management body" as a managing body that exercises substantive and overall management and control over the production and business, personnel, accounting books and assets of an enterprise, the only official guidance for this definition currently available is set forth in Circular 82 issued by the State Administration of Taxation, at April 22, 2009 which provides that a foreign enterprise controlled by a PRC company or a PRC company group will be classified as a "resident enterprise" with its "*de facto* management bodies" located within China if the following criteria are satisfied:

● the place where the senior management and core management departments that are in charge of its daily operations perform their duties is mainly located in the PRC,

● its financial and human resources decisions are made by or are subject to approval by persons or bodies in the PRC,

● its major assets, accounting books, company seals, and minutes and files of its board and shareholders' meetings are located or kept in the PRC, and

● more than half of the enterprise's directors or senior management with voting rights frequently reside in the PRC.

We do not believe that we meet the conditions outlined in the preceding paragraph since we do not have a PRC enterprise or enterprise group as our primary controlling shareholder. In addition, we are not aware of any offshore holding companies with a corporate structure similar to our company that has been deemed a PRC "resident enterprise" by the PRC tax authorities.

If we are deemed a China resident enterprise, we may be subject to the EIT at the rate of 25% on our global income, except that the dividends we receive from our Chinese subsidiaries may be exempt from the EIT to the extent such dividends are deemed dividends among qualified resident enterprises. If we are considered a resident enterprise and earn income other than dividends from our Chinese subsidiaries, a 25% EIT on our global income could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.

*PRC Value Added Tax ("VAT")*

Pursuant to the Provisional Regulations on Value-added Tax (VAT) of the PRC last amended on February 6, 2016 and became effective from January 1, 2009 and the Detailed Rules for the Implementation of the Provisional Regulation of China on VAT last amended on October 28, 2011 and effective as of November 1, 2011, all entities or individuals in the PRC engaging in the sale of goods, the provision of processing services, repairs and replacement services, and the importation of goods are required to pay VAT.

According to the requirements of the Notice of the Ministry of Finance and the State Administration of Taxation on Implementing the Pilot Program of Replacing Business Tax with Value-Added Tax in an All-round Manner (Cai Shui [2016] Document No. 36) and the annexes thereto, namely The Measures for Implementing the Pilot Program of Replacing Business Tax with Value-Added Tax, the Provisions on Relevant Matters concerning the Pilot Program of Replacing Business Tax with Value-Added Tax, the Provisions on the Transitional Policies for the Pilot Program of Replacing Business Tax with Value-Added Tax, and the Provisions on the Application of VAT Zero Rate and VAT Exemption Policy to Cross-border Taxable Activities, effective from 1 May 2016, the pilot program of replacing business tax with value-added tax was implemented across the country, and the payment of business tax for taxpayers in the construction industry, the real estate industry, the financial industry, and the living service industry shall be replaced with the payment of value-added tax at 6% for general VAT payer, and 3% for small-scale VAT payer. Gujia was identified as a general VAT payer on December 1, 2021.

*Hong Kong Taxation*

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the "Ordinance"). Under the two-tiered profits tax rate regime, the first HK dollar 2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018 – 2019. According to the policy, if no election has been made, the whole of the taxpaying entity's assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment is not elected by us, our subsidiaries registered in Hong Kong are subject to income tax at a rate of 16.5%. Payments of dividends by the subsidiary to us are not subject to withholding tax in Hong Kong.

*United States Federal Income Taxation*

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

● banks,

● financial institutions,

● insurance companies,

● regulated investment companies,

● real estate investment trusts,

● broker-dealers,

● traders that elect to mark to market,

● U.S. expatriates,

● tax-exempt entities,

● persons liable for alternative minimum tax,

● persons holding our common shares as part of a straddle, hedging, conversion or integrated transaction,

● persons that actually or constructively own 10% or more of our common shares,

● persons who acquired our common shares pursuant to the exercise of any employee common share option or otherwise as consideration, or

● persons holding our common shares through partnerships or other pass-through entities.

Prospective purchasers are urged to consult their tax advisors about the application of the U.S. Federal tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our common shares.

*Taxation of Dividends and Other Distributions on our Common Shares*

Subject to the passive foreign investment company rules discussed below, the gross amount of distributions made by us to you with respect to the common shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, to the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your common shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. The dividends will not be eligible for the dividends-received deduction allowed in respect of dividends received from other U.S. corporations.

With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the common shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Under U.S. Internal Revenue Service authority, our common shares will be considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the NASDAQ Capital Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our common shares, including the effects of any change in law after the date of this report.

Dividends on our common shares will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend considered for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our common shares will constitute "passive category income" but could, in the case of certain U.S. Holders, constitute "general category income."

*Taxation of Dispositions of Common Shares*

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of common shares equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the common shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the common shares for more than one year, you will be eligible for the capital gains tax rate of 20% (or lower for individuals in lower tax brackets). The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes.

*Passive Foreign Investment Company*

Based on our current and anticipated operations and the composition of our assets, we do not expect to be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for our current taxable year ending December 31, 2022. Our actual PFIC status for the current taxable years ending December 31, 2022 will not be determinable until after the close of such year and, accordingly, there is no guarantee that we will not be a PFIC for the current year. PFIC status is a factual determination for each taxable year which cannot be made until the close of the taxable year. A non-U.S. corporation is considered a PFIC for any taxable year if either:

● at least 75% of its gross income is passive income, or

● at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the "asset test").

We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. We must make a separate determination each year as to whether we are a PFIC. As a result, our PFIC status may change. In particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our common shares, our PFIC status will depend in large part on the market price of our common shares. Accordingly, fluctuations in the market price of the common shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly, we spend the cash we raise in this offering. If we are a PFIC for any year during which you hold common shares, we will continue to be treated as a PFIC for all succeeding years during which you hold common shares. However, if we cease to be a PFIC, you may avoid some of the adverse effects of the PFIC regime by making a "deemed sale" election with respect to the common shares.

If we are a PFIC for any taxable year during which you hold common shares, you will be subject to special tax rules with respect to any "excess distribution" that you receive and any gain you realize from a sale or other disposition (including a pledge) of the common shares, unless you make a "mark-to-market" election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the common shares will be treated as an excess distribution. Under these special tax rules:

● the excess distribution or gain will be allocated ratably over your holding period for the common shares,

● the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

● the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. The tax liability for amounts allocated to such years cannot be offset by any net operating losses for such years, and gains realized on the sale of the common shares cannot be treated as capital, even if you hold the common shares as capital assets.

A U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for the common shares, you will include in income each year an amount equal to the excess, if any, of the fair market value of the common shares as of the close of your taxable year over your adjusted basis in such common shares. You are allowed a deduction for the excess, if any, of the adjusted basis of the common shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the common shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the common shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the common shares, as well as to any loss realized on the actual sale or disposition of the common shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such common shares. Your basis in the common shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations that are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under "Taxation of Dividends and Other Distributions on our Common Shares" generally would not apply.

The mark-to-market election is available only for "marketable stock", which is stock that is traded in other than *de minimis* quantities on at least 15 days during each calendar quarter ("regularly traded") on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the NASDAQ Capital Market. If the common shares are regularly traded on the NASDAQ Capital Market and if you are a holder of common shares, the mark-to-market election would be available to you were we to be or become a PFIC.

Alternatively, a U.S. Holder of stock in a PFIC may make a "qualified electing fund" election with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder's pro rata share of the corporation's earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold common shares in any year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 regarding distributions received on the common shares and any gain realized on the disposition of the common shares.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our common shares and the elections discussed above.

*Information Reporting and Backup Withholding*

Dividend payments with respect to our common shares and proceeds from the sale, exchange or redemption of our common shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding at a current rate of 28%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Dividends and paying agents** 

Not required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.** **Statement by experts** 

Not required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.** **Documents on display** 

Documents concerning us that are referred to in this document may be inspected at AF, 16/F, Block B, Jiacheng Plaza,18 Xiaguangli, Chaoyang District, Beijing, 100027 China. In addition, we file annual reports and other information with the Securities and Exchange Commission. We file annual reports on Form 20-F and submit other information under cover of Form 6-K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers, directors and principal shareholders are exempt from the insider short-swing disclosure and profit recovery rules of Section 16 of the Exchange Act. Annual reports and other information we file with the Commission may be inspected at the public reference facilities maintained by the Commission at Room 1024, 100 F. Street, N.E., Washington, D.C. 20549, and copies of all or any part thereof may be obtained from such offices upon payment of the prescribed fees. You may call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms and you can request copies of the documents upon payment of a duplicating fee, by writing to the Commission. In addition, the Commission maintains a web site that contains reports and other information regarding registrants (including us) that file electronically with the Commission which can be assessed at http://www.sec.gov.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.** **Subsidiary Information** 

Not required.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**

Interest Rate Risk

As of December 31, 2025 and 2024, we had no short-term borrowings. Our exposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks. We have not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short of expectations due to changes in interest rates.

Credit Risk

As of December 31, 2025 and 2024, we had cash and cash equivalents of $8,185,502 and $2,869,241, respectively. Our cash and cash equivalents are invested primarily in savings and deposit accounts with original maturities of three months or less. Savings and deposit accounts generate a small amount of interest income.

Inflation Risk

Inflationary factors such as increases in the cost of our product may adversely affect our operating results. Although we do not believe that inflation has had a material effect on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross profit and selling and marketing, general and administrative expenses as a percentage of revenue if the selling prices of our products do not increase with these increased costs.

Foreign Exchange Risk

A majority of the Company's expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

Our functional currency is the RMB, and our financial statements are presented in U.S. dollars. The RMB appreciated by 3.21% in fiscal year 2024 and depreciated by 2.22% in fiscal year 2025. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated in RMB.

To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company.

Commodity Risk

We are not exposed to commodity price risk.

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

Not required.

**PART II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

There has been no default of any indebtedness nor is there any arrearage in the payment of dividends.

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

See "Item 10. Additional Information" for a description of the rights of securities holders, which remain unchanged.

The following "Use of Proceeds" information relates to the registration statement on Form F-1, as amended (File Number 333-227934), which was declared effective December 26, 2018, for our IPO in which we offered and sold an aggregate 1,800,000 common shares at $4 per share (22,500 common shares at $320 per share given effect of the 2022 and 2024 Reverse Stock Split). Net proceeds raised by us from the IPO amounted to approximately $6,478,801 after deducting underwriting discounts and commissions and other offering expenses. Out of the $6.5 million net proceeds, $500,000 was deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow period of two years following the IPO closing date of January 7, 2019. On January 7, 2019, we sold additional 270,000 common shares at $4 per share (3,375 common shares at $320 per share given effect of the 2022 and 2024 Reverse Stock Split). Net proceeds raised by us amounted to $993,600 after deducting underwriting discounts. As a result, we raised a total of $7,472,401 from the issuance of 2,070,000 (25,875 shares of common stock given effect of the 2022 and 2024 Reverse Stock Split) shares of common stock in the January 2019 IPO. WestPark Capital, Inc. acted as representative for the underwriters in the IPO.

We have earmarked and have been using the proceeds of the initial public offering as follows: approximately $3.13 million for research and development and additional hiring, approximately $1.86 million for sales and marketing; and balance of approximately $2.48 million for additional working capital.

As of December 31, 2025, we have used all amounts of the net proceeds from our IPO.

**ITEM 15. CONTROLS AND PROCEDURES**

***Disclosure Controls and Procedures***

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025. Based on that evaluation, management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures as of December 31, 2025 were effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

***Management's annual report on internal control over financial reporting***

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934. Our internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our management and other personnel to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatement. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with our policies and procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management has concluded that our internal control over financial reporting was effective as of December 31, 2025.

All internal control systems, no matter how well designed, have inherent limitations including the possibility of human error and the circumvention or overriding of controls. Further, because of changes in conditions, the effectiveness of internal controls may vary over time. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. We cannot be certain that these measures will successfully remediate the material weakness or that other material weaknesses will not be discovered in the future. If our efforts are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our common stock to decline. In addition, it could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our securities. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

Notwithstanding that management has concluded that our internal control over financial reporting was effective as of December 31, 2025, a weakness has been identified due to the need for a prior-year restatement in the 2024 financial statements. This restatement is related to adjustments made to the previously issued financial statements for the year ended December 31, 2023. The restatement reflects the identification of certain errors in the accounting treatment of certain transactions, which were discovered after the issuance of the 2023 financials. This error was not initially detected due to limitations in the design and operation of our internal controls surrounding the review and reconciliation process for those specific transactions. While management has taken appropriate corrective actions to address this issue, including enhancements to our financial reporting controls, the need for the restatement indicates a deficiency in the effectiveness of our internal controls during the 2023 fiscal year. As a result, we are in the process of strengthening these controls to ensure the accurate reporting of financial results and to prevent similar occurrences in the future. We believe the restatement and the steps taken to address this matter will further enhance the overall effectiveness of our internal control over financial reporting.

***Changes in Internal Controls over Financial Reporting***

Except as discussed above, during the year ended December 31, 2025, there were no changes in the Company's internal control over financial reporting that have materially affected or are reasonably likely to materially affect our company's internal control over financial reporting. It should be noted that while our management believes that our disclosure controls and procedures provide a reasonable level of assurance; our management does not expect that our disclosure controls and procedures or internal financial controls will prevent all errors or fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

**ITEM 16. RESERVED**

**ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.**

Our Board of Directors has determined that Ms. Xiaofei Ren qualifies as an "audit committee financial expert" as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules.

**ITEM 16B. CODE OF ETHICS.**

Our Board of Directors has adopted a code of business conduct and ethics that applies to our directors, officers and employees. A copy of this code is available on our website at http://ir.haisc.com/corporate/governance. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions.

**ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.**

The following table sets forth the aggregate fees by categories specified below that are billed or made payable for certain professional services rendered by HTL International, LLC, Assentsure PAC and MaloneBailey, LLP, our principal external auditors, directly to us during the periods indicated.

 ****

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Audit fees<sup>(1)</sup> | $221800 | $240000 |
| Audit-related fees<sup>(2)</sup> | 54750 | 30900 |
| Tax Fees<sup>(3)</sup> |  |  |
| All Other Fees |  |  |

---

 ****

Notes:

(1) "Audit fees" represents the aggregate fees billed for each of the fiscal years listed for professional services rendered by our principal accounting firm for the audit of our annual financial statements or services that are normally provided by the auditors in connection with statutory and regulatory filings or engagements.

(2) "Audit-related fees" represents the aggregate fees of services that are reasonably related to performance of the audit or review or our financial statements and are nor reported under "Audit Fees." These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards.

(3) "Tax fees" consist of fees for professional services rendered by the principal accounting firm for tax compliance, tax advice, and tax planning.

It is the policy of our Audit Committee to evaluat and pre-approve the scope and cost of any engagement of an auditor before the auditor renders any its audit and non-audit services.

**ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.**

None.

**ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.**

No purchase of our securities were made by us or our affiliates in the 2025 fiscal year.

**ITEM 16F. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.**

<u>Dismissal of AssentSure PAC on January 25, 2026</u>

On January 25, 2026, the Company dismissed its independent accountant, AssentSure PAC ("AssentSure"), an independent audit firm, effective immediately, and appointed HTL International, LLC ("HTL") as our independent auditor for the fiscal year ending December 31, 2025, effective as of January 26, 2026. HTL is located in Houston and has not been identified by the PCAOB as a firm that the PCAOB is unable to fully inspect and investigate. The appointment of HTL was made after careful consideration and evaluation process by the Company and has been approved by the audit committee and the board of directors of the Company.

During the years ended December 31, 2025 and 2024, and during the subsequent interim period from the end of the most recently completed fiscal year through January 25, 2026, the date of dismissal, there were no "disagreements" (as described in Item 304(a)(1)(iv) of Regulation S-K) with AssentSure on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreement(s), if not resolved to the satisfaction of AssentSure would have caused it to make reference to such disagreement in its reports for such periods. Furthermore, no "reportable events" occurred during the years ended December 31, 2025 and 2024, or subsequently up to January 25, 2026. As used herein, the term "reportable event" means any of the items listed in paragraphs (a)(1)(v) of Item 304 of Regulation S-K.

The Company provided AssentSure with a copy of this disclosures under this Item 16F prior to its filing with the Securities and Exchange Commission (the "SEC") and requested that AssentSure furnish the Company with a letter addressed to the SEC stating whether it agrees with the above statements and, if it does not agree, stating the respects in which it does not agree. A copy of the letter of AssentSure to the SEC, dated January 29, 2026, is attached as Exhibit 16.1 by reference to the Form 6-K for January 2026 filed on January 29, 2026, stating AssentSure agrees with the statements made by the Company.

During the two years ended December 31, 2025 and 2024, and during the subsequent interim period through the Engagement Date, the Company did not consult with HTL regarding: (i) the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company's consolidated financial statements, and no written or oral advice was provided by HTL that was an important factor considered by the Company in reaching a decision as to accounting, auditing or financial reporting issues, or (ii) any matter that was either the subject of a disagreement or event, as set forth in Item 304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation S-K.

**ITEM 16G. CORPORATE GOVERNANCE**

Pursuant to the home country rule exemption set forth under Nasdaq Listing Rule 5615, we elected to be exempt from the requirements of NASDAQ Listing Rule 5635, which requires shareholder approval for (i) certain acquisitions of stock or assets of another company; (ii) an issuance of shares that will result in a change of control of the company; (iii) the establishment or amendment of certain equity based compensation plans and arrangements; and (iv) certain transactions (other than a public offering) involving issuances of a 20% or more of our outstanding shares. Our shares are listed on the NASDAQ Capital Market ("NASDAQ"). As such, we are subject to corporate governance requirements imposed by NASDAQ. Under NASDAQ rules, listed non-US companies may, in general, follow their home country corporate governance practices in lieu of some of the NASDAQ corporate governance requirements. Except for the foregoing, we endeavor to comply with the NASDAQ corporate governance practices and except for the foregoing, there is no significant difference between our corporate governance practices and what the NASDAQ requires of domestic U.S. companies.

**ITEM 16H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.**

Not applicable.

**ITEM 16J. INSIDER TRADING POLICIES.**

Our board of directors has adopted the Insider Trading Policy that governs all transactions involving the Company's securities by directors, officers, employees, consultants, and contractors and is reasonably designed to promote compliance with any insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of the Company's Insider Trading Policy is filed as Exhibit 11.2 to this Annual Report.

**ITEM 16K. CYBERSECURITY**

We identify and assess material risks from cybersecurity threats to our information systems and the information residing in our information systems by monitoring and evaluating our threat environment on an ongoing basis using various methods including, for example, using manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, conducting scans of the threat environment, and conducting risk assessments.

We manage material risks from cybersecurity threats to our information systems and the information residing in our information systems through various processes and procedures, including, depending on the environment, risk assessment, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, and employee training. We engage third-party service providers to provide some of the resources used in our information systems and some third-party service providers have access to information residing in our information systems. With respect to such third parties, we seek to engage reliable, reputable service providers that maintain cybersecurity programs. Depending on the nature and extent of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, our processes may include conducting due diligence on the cybersecurity practices of such provider and contractually imposing cybersecurity related obligations on the provider.

We are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect our Company, including our business strategy, results of operations, or financial condition. We describe risks faced by us from identified cybersecurity threats in "Item 3. Key Information—D. Risk Factors —Our ability to protect the confidential information of our users may be adversely affected by cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions."

*Cybersecurity Governance*

 

Our Board of Directors holds oversight responsibility over our Company's risk management and strategy, including material risks related to cybersecurity threats. This oversight is executed directly by our board of directors and through its committees. Our audit committee oversees the management of our Company's major financial risk exposures, the steps management has taken to monitor and control such exposures, and the process by which risk assessment and management is undertaken and handled, which would include cybersecurity risks, in accordance with its charter. The audit committee holds regular meetings and receives periodic reports from management regarding risk management, including major financial risk exposures from cybersecurity threats or incidents.

Within management, the Company's technical research and development manager are primarily responsible for assessing and managing our material risks from cybersecurity threats on a day-to-day basis and keep the senior executive officers and out Board of Directors informed on a regular basis of the identification, assessment, and management of cybersecurity risks and of any cybersecurity incidents. Such management personnel have prior experience and training in managing information systems and cybersecurity matters and participate in ongoing training programs.

As of the date hereof, the Company has not encountered cybersecurity incidents that the Company believes to have been material to the Company taken as a whole.

**PART III**

**ITEM 17. FINANCIAL STATEMENTS**

We have elected to provide financial statements pursuant to Item 18.

**ITEM 18. FINANCIAL STATEMENTS**

The financial statements are filed as part of this Annual Report beginning on page F-1.

**ITEM 19. EXHIBITS**

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 1.1 | [Amended and Restated Memorandum and Articles of Association (6).](http://www.sec.gov/Archives/edgar/data/1742518/000121390024108348/ea022444201ex3-1_mmtecinc.htm) |
| 2.1 | [Specimen Share Certificate (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex4-1_mmtecinc.htm) |
| 2.2 | [Description of Securities (10)](https://www.sec.gov/Archives/edgar/data/1742518/000121390024037425/ea020464501ex2-2_mmtecinc.htm) |
| 4.1 | [Underwriting Agreement (1)](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex1-1_mmtecinc.htm) |
| 4.2 | [Employment Agreement between the Company and CEO (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-1_mmtecinc.htm) |
| 4.3 | [Employment Agreement between the Company and CFO (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-2_mmtecinc.htm) |
| 4.4 | [Individual Loan Contract with Zhen Fan (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-5_mmtecinc.htm) |
| 4.5 | [Individual Loan Contract with Xiangdong Wen (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-6_mmtecinc.htm) |
| 4.6 | [Lease Agreement (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-8_mmtecinc.htm) |
| 4.7 | [Share Repurchase Agreement (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-9_mmtecinc.htm) |
| 4.8 | [Form of Securities Purchase Agreement entered into on February 22, 2021, by MMTec, Inc. and certain institutional investors (2).](http://www.sec.gov/Archives/edgar/data/1742518/000121390021010845/ea125703ex10-1_mmtecinc.htm) |
| 4.9 | [Form of Securities Purchase Agreement entered into on December 20, 2021, by MMTec, Inc. and an investor (3).](http://www.sec.gov/Archives/edgar/data/1742518/000121390021066478/ea152744ex10-1_mmtecinc.htm) |
| 8.1 | [List of Subsidiaries of the Registrant (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex21-1_mmtecinc.htm) |
| 10.1 | [Secured Promissory Note, dated December 28, 2023 made by XChange in the amount of $153,000,000 in favor of the Company. (11)](https://www.sec.gov/Archives/edgar/data/1742518/000121390024037425/ea020464501ex10-1_mmtecinc.htm) |
| 10.2 | [Equity Acquisition Agreement, dated November 22, 2023, by and among FLJ Group Limited, Alpha Mind Technology Limited, MMTec, Inc., and Burgeon Capital Inc. (4)](http://www.sec.gov/Archives/edgar/data/1742518/000121390023089640/ea188934ex10-1_mmtecinc.htm) |
| 10.3 | [Senior Convertible Promissory Note, dated June 7, 2023, made by MMTec, Inc., in the original principal amount of $7,000,000 (5)](http://www.sec.gov/Archives/edgar/data/1742518/000121390023047246/ea179955ex10-1_mmtec.htm) |
| 10.4 | [Equity Acquisition Agreement, dated May 16, 2023, by and among MMTec, Inc., Alfa Crest Investment Limited, CapitoLabs Limited, and Alpha Mind Technology Limited. (7)](http://www.sec.gov/Archives/edgar/data/1742518/000121390023040904/ea178774ex10-1_mmtec.htm) |
| 10.5 | [Form of Securities Purchase Agreement (8)](http://www.sec.gov/Archives/edgar/data/1742518/000121390023025538/ea176252ex4-1_mmtecinc.htm) |
| 10.6 | [Form of Senior Convertible Note (Incorporated by reference to Exhibit A to the Form of Securities Purchase Agreement filed as Exhibit 10.5 to this Form 20-F) (8)](https://www.sec.gov/Archives/edgar/data/1742518/000121390023025538/ea176252ex4-1_mmtecinc.htm) |
| 10.7 | [Form of Securities Purchase Agreement (9)](http://www.sec.gov/Archives/edgar/data/1742518/000121390023013436/ea174068ex4-1_mmtecinc.htm) |
| 10.8 | [Share Transfer Commitment Letter for Secured Promissory Note, dated April 26, 2024, by and between FLJ Group Limited and MMTec, Inc. (12)](https://www.sec.gov/Archives/edgar/data/1742518/000121390024037425/ea020464501ex10-8_mmtecinc.htm) |
| 11.1 | [Code of Conduct and Ethics (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex14-1_mmtecinc.htm) |
| 11.2 | [Insider Trading Policy. (14)](https://www.sec.gov/Archives/edgar/data/1742518/000121390025030342/ea023623301ex11-2_mmtec.htm) |
| 12.1 | [Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.](ea028404601ex12-1.htm) |
| 12.2 | [Certification of the Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.](ea028404601ex12-2.htm) |
| 13.1 | [Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea028404601ex13-1.htm) |

---

---

| | |
|:---|:---|
| 13.2 | [Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea028404601ex13-2.htm) |
| 15.1 | [Consent of HTL International, LLC.](ea028404601ex15-1.htm) |
| 15.2 | [Consent of AssentSure PAC](ea028404601ex15-2.htm) |
| 97.1 | [Dodd-Frank Restatement Recoupment Policy (13)](https://www.sec.gov/Archives/edgar/data/1742518/000121390024037425/ea020464501ex97-1_mmtecinc.htm) |
| 99.1 | [Charter of the Audit Committee (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex99-1_mmtecinc.htm) |
| 99.2 | [Charter of the Compensation Committee (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex99-2_mmtecinc.htm) |
| 99.3 | [Charter of the Nominating Committee (1).](http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex99-3_mmtecinc.htm) |
| 101.INS | Inline XBRL Instance Document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

(1) Previously filed as part of the registration statement filed with the SEC on October 22, 2018 and incorporated by reference herein by reference.

(2) Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 6-K filed with the SEC on February 22, 2021.

(3) Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 6-K filed with the SEC on December 21, 2021.

(4) Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 6-K filed with the SEC on November 22, 2023.

(5) Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 6-K filed with the SEC on June 8, 2023.

(6) Incorporated by reference to Exhibit 3.1 to the Company's Report on Form 6-K filed with the SEC on December 12, 2024.

(7) Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 6-K filed with the SEC on May 17, 2023.

(8) Incorporated by reference to Exhibit 4.1 to the Company's Report on Form 6-K filed with the SEC on March 31, 2023.

(9) Incorporated by reference to Exhibit 4.1 to the Company's Report on Form 6-K filed with the SEC on February 22, 2023.

(10) Incorporated by reference to Exhibit 2.2 to the Company's Annual Report on Form 20-F filed with the SEC on April 30, 2024.

(11) Incorporated by reference to Exhibit 10.1 to the Company's Annual Report on Form 20-F filed with the SEC on April 30, 2024.

(12) Incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form 20-F filed with the SEC on April 30, 2024.

(13) Incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 20-F filed with the SEC on April 30, 2024.

(14) Incorporated by reference to Exhibit 11.2 to the Company's
Annual Report on Form 20-F filed with the SEC on April 9, 2025.

**SIGNATURES**

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| | | | |
|:---|:---|:---|:---|
| April 2, 2026 | **MMTec, Inc.** | **MMTec, Inc.** | **MMTec, Inc.** |
|  | By: | /s/ Xiangdong Wen | /s/ Xiangdong Wen |
|  |  | Name: | Xiangdong Wen |
|  |  | Title: | Chief Executive Officer<br> (Principal Executive Officer) |
| April 2, 2026 | By: | /s/ Min Kong | /s/ Min Kong |
|  |  | Name: | Min Kong |
|  |  | Title: | Chief Financial Officer<br> (Principal Financial and Accounting Office) |

---

**MMTEC, INC. AND SUBSIDIARIES**

**CONSOLIDATED FINANCIAL STATEMENTS**

**December 31, 2025, 2024 and 2023**

**CONTENTS**

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm (PCAOB ID 7000)](#F_001) | F-2 |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID 6783)](#F_002) | F-3 |
| Consolidated Financial Statements: |  |
| &nbsp;&nbsp;&nbsp;[Consolidated Balance Sheets - As of December 31, 2025 and 2024](#F_003) | F-4 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Operations and Comprehensive Income/ (Loss) - For the Years Ended December 31, 2025, 2024 and 2023](#F_004) | F-5 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Changes in Shareholders' Equity - For the Years Ended December 31, 2025, 2024 and 202<u>3</u>](#F_005) | F-6 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Cash Flows – For the Years Ended December 31, 2025, 2024 and 202<u>3</u>](#F_006) | F-7 |
| &nbsp;&nbsp;&nbsp;[Notes to Consolidated Financial Statements](#F_007) | F-8 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and Shareholders of

MMTEC, INC.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of MMTEC, INC. and its subsidiaries (collectively, the "Company") as of December 31, 2025, and the related consolidated statements of operations and comprehensive income/(loss), changes in shareholders' equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

**Critical Audit Matters**

Critical audit matters are matters arising from the current year audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

---

| |
|:---|
| /s/ HTL International, LLC |
| We have served as the Company's auditor since 2026. |
| Houston, Texas |
| April 2, 2026 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the shareholders and the board of directors of MMTEC, INC.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of MMTEC, INC. (the "Company") as of December 31, 2024, the related consolidated statements of operations and comprehensive income/(loss), changes in shareholders' equity, and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Emphasis of Matter**

As discussed in Note 4 to the financial statements, the Company has identified certain accounting errors regarding its accounting of a convertible promissory note and restated its previously issued audited financial statements as of December 31, 2023, to correct such errors. The restatements primarily relate to the understatement of interest expense and accrued interest by approximately $3.46 million associated with a convertible promissory note issued on March 31, 2023. The adjustments have been reflected in the accompanying financial statements, with corresponding impacts to accrued liabilities and other payables, retained earnings, and earnings per share (EPS) for the affected periods.

---

| |
|:---|
| /s/ Assentsure PAC |
| Singapore |
| April 9, 2025 |
| PCAOB ID Number 6783 |

---

We served as the Company's auditors from 2023 to 2026.

**MMTEC, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(IN U.S. DOLLARS)**

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
|  | **US$** | **US$** |
| ASSETS |  |  |
| CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $8185502 | $2869241 |
| &nbsp;&nbsp;&nbsp;Security deposits - Current | 8089 | 8040 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 169716 | 143265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 8363307 | 3020546 |
| NON-CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Security deposits - Non-current | 135781 | 137281 |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 2506 | 85849 |
| &nbsp;&nbsp;&nbsp;Notes receivable | 9409560 | 62226244 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use asset | 507251 | 436937 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 10055098 | 62886311 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $18418405 | $65906857 |
| LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |
| CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Salary payable | $194100 | $335597 |
| &nbsp;&nbsp;&nbsp;Advance from customer | 100000 | - |
| &nbsp;&nbsp;&nbsp;Accrued liabilities and other payables | 84399 | 6601942 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities - Current | 290703 | 383153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 669202 | 7320692 |
| NON-CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities - Non-current | 180046 | 41170 |
| &nbsp;&nbsp;&nbsp;Convertible promissory notes | 3050000 | 31941830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current liabilities | 3230046 | 31983000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 3899248 | 39303692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies |  |  |
| SHAREHOLDERS' EQUITY: |  |  |
| &nbsp;&nbsp;&nbsp;Common shares ($0.08 par value, 625,000,000 shares authorized; 99,587,811 and 25,186,864 shares issued and outstanding at December 31, 2025 and December 31, 2024) \* | 7967024 | 2014949 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 130728219 | 92709334 |
| &nbsp;&nbsp;&nbsp;Accumulated profits (deficit) | (123994872) | (67919627) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (181214) | (201491) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 14519157 | 26603165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $18418405 | $65906857 |

---

\* After giving effect to the reverse stock split effected on December 18, 2024. Also see Note 13.

The accompanying notes to consolidated financial statements are an integral part of these statements.

**MMTEC, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/ (LOSS)**

**(IN U.S. DOLLARS)**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the<br> Year Ended**<br>**December 31,<br> 2025** | **For the<br> Year Ended**<br>**December 31,<br> 2024** | **For the <br> Year Ended**<br>**December 31,<br> 2023** |
|  | **US$** | **US$** | **US$** |
|  | | | As restated |
| REVENUE | $807500 | $1868333 | $869935 |
| COST OF REVENUE | 633000 | 343083 | 172948 |
| GROSS PROFIT | 174500 | 1525250 | 696987 |
| OPERATING EXPENSES: |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling and marketing | 342816 | 715976 | 901319 |
| &nbsp;&nbsp;&nbsp;General and administrative |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payroll and related benefits | 1909154 | 2082886 | 2512781 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 625152 | 705199 | 1031274 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other general and administrative | 1099638 | 1081621 | 1091950 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Operating Expenses | 3976760 | 4585682 | 5537324 |
| LOSS FROM OPERATIONS | (3802260) | (3060432) | (4840337) |
| OTHER INCOME (EXPENSE): |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 1594736 | 4500977 | 209439 |
| &nbsp;&nbsp;&nbsp;Interest expense | (8685630) | (2422292) | (4202810) |
| &nbsp;&nbsp;&nbsp;Allowance for credit losses-notes receivable | (23887304) | (90236242) | - |
| &nbsp;&nbsp;&nbsp;Loss on sale of notes receivable | (21292430) | - | - |
| &nbsp;&nbsp;&nbsp;Recovery of impairment on long-term investment | - | - | 439111 |
| &nbsp;&nbsp;&nbsp;Recovery of bad debt allowance on loan receivable | - | - | 550000 |
| &nbsp;&nbsp;&nbsp;Other income | 4955 | 54737 | 940 |
| &nbsp;&nbsp;&nbsp;Foreign currency transaction gain (loss) | 1661 | 19497 | (4723) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Other Income (Expense) | (52264012) | (88083323) | (3008043) |
| LOSS BEFORE INCOME TAXES | (56066272) | (91143755) | (7848380) |
| INCOME TAX EXPENSES | (8973) | (24525) | - |
| NET LOSS FROM CONTINUING OPERATIONS | (56075245) | (91168280) | (7848380) |
| DISCONTINUED OPERATIONS |  |  |  |
| &nbsp;&nbsp;&nbsp;Income (loss) from discontinued operations, net of applicable income taxes | - | - | (551017) |
| &nbsp;&nbsp;&nbsp;Net gain on sale of discontinued operations, net of applicable income taxes | - | - | 53818778 |
| NET INCOME FROM DISCONTINUED OPERATIONS | - | - | 53267761 |
| NET INCOME (LOSS) | (56075245) | (91168280) | $45419381 |
| Less: Net loss attributable to non-controlling interest from discontinued operations | - | - | (82302) |
| NET INCOME (LOSS) ATTRIBUTABLE TO MMTEC, INC. | $(56075245) | $(91168280) | $45501683 |
| COMPREHENSIVE INCOME (LOSS): |  |  |  |
| &nbsp;&nbsp;&nbsp;NET INCOME (LOSS) | (56075245) | (91168280) | 45419381 |
| &nbsp;&nbsp;&nbsp;OTHER COMPREHENSIVE INCOME (LOSS) |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | 20277 | 69610 | (138414) |
| &nbsp;&nbsp;&nbsp;TOTAL COMPREHENSIVE INCOME (LOSS) | (56054968) | (91098670) | 45280967 |
| &nbsp;&nbsp;&nbsp;Less: Comprehensive loss attributable to non-controlling interests from discontinued operations | - | - | (91092) |
| COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO MMTEC, INC. | $(56054968) | $(91098670) | $45372059) |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted \* | 53562569 | 24996144 | 13221897 |
| GAIN(LOSS) EARNINGS PER SHARE - BASIC AND DILUTED |  |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations\* | $(1.05) | $(3.65) | $(0.59) |
| &nbsp;&nbsp;&nbsp;Discontinued operations\* | $- | $- | $4.03 |

---

\* After giving effect to the reverse stock split effected on December 18, 2024. Also see Note 13.

The accompanying notes to consolidated financial statements are an integral part of these statements.

**MMTEC, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023**

**(IN U.S. DOLLARS)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Shares \*** | **Common Shares \*** | | | | | | |
|  | **Number of**<br>**Shares** |<br>**Amount** | **Additional**<br>**Paid-in**<br>**Capital** | **Retained earnings**<br>**(Accumulated**<br>**Deficit)** | **Accumulated <br> Other**<br>**Comprehensive**<br>**Loss** | **Shares**<br>**to be**<br>**Issued** | **Non-**<br>**controlling**<br>**Interests** | **Total**<br>**Shareholder's**<br>**Equity** |
| **Balance, December 31, 2022** | **643130** | **51451** | $**31727407** | $**(22253030)** | $**(141477)** | $**-**  | $**-**  | $**9384351** |
| Issuance of common stock for cash |  | - | - | - | - | $1430000 | - | $1430000 |
| Acquisition of additional non-controlling interest |  | - | - | - | - | - | $15298616 | $15298616 |
| Conversion of bond to equity | 24250000 | 1940000 | $60781596 | - | - | - | - | $62721596 |
| Net income (loss) for the year ended December 31, 2023 (restated) |  | - | - | $45501683 | - | - | $(82302) | $45419381 |
| Foreign currency translation adjustment |  | - | - | - | $(129624) | - | $(8790) | $(138414) |
| Deconsolidation of discontinued operations | - | - | - | - | - | - | $(15207524) | $(15207524) |
| **Balance, December 31, 2023 (restated)** | **24893130** | **1991451** | $**92509003** | $**23248653** | $**(271101)** | $**1430000** | $**-**  | $**118908006** |
| Withdrawal of issuance of common stock for cash |  | - | $(112748) | - | - | $(1430000) | - | $(1542748) |
| Reverse stock split adjustment | (16) | (2) | 2 | - | - | - | - | $- |
| Conversion of bond to equity | 293750 | 23500 | $313077 | - | - | - | - | $336577 |
| Net loss for the year ended December 31, 2024 |  | - | - | $(91168280) | - | - | - | $(91168280) |
| Foreign currency translation adjustment | - | - | - | - | $69610 | - | - | $69610 |
| **Balance, December 31, 2024** | **25186864** | **2014949** | $**92709334** | $**(67919627)** | $**(201491)** | **-**  | **-**  | $**26603165** |
| Conversion of bond to equity | 74400947 | 5952075 | $38018885 | - | - | - | - | $43970960 |
| Net loss for the year ended December 31, 2025 |  | - | - | $(56075245) | - | - | - | $(56075245) |
| Foreign currency translation adjustment | - | - | - | - | $20277 | - | - | $20277 |
| **Balance, December 31, 2025** | **99587811** | **7967024** | $**130728219** | $**(123994872)** | $**(181214)** | **-**  | **-**  | $**14519157** |

---

\* After giving effect to the reverse stock split effected on December 18, 2024. Also see Note 13.

The accompanying notes to consolidated financial statements are an integral part of these statements.

**MMTEC, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(IN U.S. DOLLARS)**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the<br> Year Ended**<br>**December 31, <br> 2025** | **For the<br> Year Ended**<br>**December 31, <br> 2024** | **For the <br> Year Ended**<br>**December 31, <br> 2023** |
|  | **US$** | **US$** | **US$** |
|  | | | As restated |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net (loss) income | $(56075245) | $(91168280) | $45419381 |
| &nbsp;&nbsp;&nbsp;Less: Net income from discontinued operations | - | - | 53267761 |
| &nbsp;&nbsp;&nbsp;Net loss from continuing operations | (56075245) | (91168280) | (7848380) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss from operations to Net cash used in operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation expense | 83928 | 46759 | 45782 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued taxes | - | 24525 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for credit losses - notes receivable | 23887304 | 90236242 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for (recovery from) bad debts | - | 164800 | (550000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recovery of impairment on long-term investment | - | - | (439111) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash lease expense | 403415 | 422343 | 395616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Imputed interest expense on convertible promissory notes | 8685630 | 2272292 | 4200000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income on notes receivable | (1363050) | (4470940) | (50301) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency transaction (gain) loss | 3376 | (7252) | (4723) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of notes receivable | 21292430 | - | - |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (426704) | (430273) | (398841) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | - | 92040 | 108302 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes receivable | - | 5141058 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposit | 3948 | 587 | (431) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (23039) | 105321 | (240743) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance from customer | 100000 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salary payable | (142801) | 28863 | (62536) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities and other payables | (122847) | (1735232) | (181304) |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | (3693655) | 722853 | (5026670) |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS | - | - | (124838) |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (3693655) | 722853 | (5151508) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | - | (5036) | (970) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from disposal of property and equipment | - | - | 7771 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash received from return of long-term investment | - | - | 439111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for business acquisition | - | - | (87083160) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan repayment from third parties | - | 634576 | 878469 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash repayment from notes receivable | 4000000 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash proceeds from sale of notes receivable | 5000000 | - | - |
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM CONTINUING OPERATIONS | 9000000 | 629540 | (85758779) |
| NET CASH USED IN INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS | - | - | (779770) |
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 9000000 | 629540 | (86538549) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of convertible promissory notes | - | - | 88000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from short-term loans and other payable | - | - | 1671750 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of short-term loan to third parties | - | (241750) | - |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM CONTINUING OPERATIONS | - | (241750) | 89671750 |
| NET CASH USED IN FINANCING ACTIVITIES FROM DISCONTINUED OPERATIONS | - | - | (5000) |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | - | (241750) | 89666750 |
| EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | 9916 | (1188) | (27104) |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 5316261 | 1109455 | (2050411) |
| CASH AND CASH EQUIVALENTS - beginning of year | 2869241 | 1759786 | 3825477 |
| CASH AND CASH EQUIVALENTS - end of year | 8185502 | 2869241 | 1775066 |
| LESS: CASH, CASH EQUIVALENTS AND RESTRICTED CASH FROM DISCONTINUED OPERATIONS | - | - | 15280 |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH FROM CONTINUING OPERATIONS | $8185502 | $2869241 | $1759786 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |  |  |  |
| Cash paid for: |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;Income taxes | $36501 | $- | $- |
| NON-CASH INVESTING AND FINANCING ACTIVITIES: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition by issuing convertible promissory notes | $- | $- | $7000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion of bond and interest to equity | $43970960 | $705000 | $76770000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes receivable on disposal of Alpha Mind | $- | $- | $153050301 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $467080 | $213451 | $- |

---

The accompanying notes to consolidated financial statements are an integral part of these statements.

**NOTE 1 – <u>ORGANIZATION AND NATURE OF OPERATIONS</u>**

MMTEC, INC. ("MMTEC", the "Company") was incorporated on January 4, 2018 under the laws of the British Virgin Islands ("BVI"). On March 19, 2018, MMTEC acquired a wholly owned subsidiary, MM Future Technology Limited ("MM Future"). MM Future was incorporated in Hong Kong on October 31, 2017 for the purpose of being a holding company for the equity interest in Gujia (Beijing) Technology Co., Ltd. ("Gujia").

Other than the equity interest in MM Future, MMTEC does not conduct any operations or own any material assets or liabilities. MM Future does not conduct any operations or own any material assets or liabilities except for the 100% of the equity interest of Gujia which it acquired on January 29, 2018.

Gujia was incorporated in People's Republic of China ("PRC") on June 9, 2015. Gujia is a technology provider, operates as an internet business platform to support operations. Gujia provides investment services to the U.S. securities markets for PRC investors and provides technical services to Chinese financial institutions to help them be able to provide investment services in the U.S. securities markets for their clients.

On November 6, 2017, Gujia acquired a wholly-owned subsidiary Meimei Zhengtong (Beijing) Technology Ltd. ("Meimei Zhengtong") which was dissolved in July 2018.

On March 28, 2018, the Company acquired 24.9% of MMBD Trading Limited ("MMBD Trading"). MMBD Trading was incorporated on March 4, 2016 under the laws of the BVI. The remaining 75.1% of MMBD Trading was owned by 32.7% shareholders of the Company. The Company agreed to purchase the remaining 75.1% of outstanding securities of MMBD Trading on April 25, 2019. The acquisition was closed on October 18, 2019. Following and as a result of this acquisition, MMBD Trading has become a wholly-owned subsidiary of the Company. MMBD Trading acquired a wholly owned subsidiary, MM Global Securities, Inc. ("MM Global") on August 16, 2017. MMBD Trading does not conduct any operations or own any material assets or liabilities except for the 100% of the equity interest of MM Global. MM Global was incorporated in the State of Illinois on September 25, 1997 as Feil Daily Investment Co. which was changed to Whitewood Group Inc. in 2011. MM Global's continuing membership application was approved by FINRA as a broker-dealer in August 2017 and changed its name to MM IGlobal, Inc. In November 2017, pursuant to the ownership change, MM IGlobal, Inc. changed its name to MM Global Securities, Inc. in March 2019. MM Global operates as a securities broker/dealer in New York City.

On April 20, 2018, the Company incorporated MM Fund Services Limited ("MM Fund"), a Cayman Islands company, for the purpose of providing administration services to the private equity funds industry. MM Fund is dormant as of December 31, 2024.

On May 28, 2018, the Company incorporated MM Capital Management Limited ("MM Capital"), a Cayman Islands company, for the purpose of providing assets management and investment services to clients.

On August 8, 2018, the Company incorporated MM Fund SPC ("MM SPC"), a Cayman Islands company, for the purpose of providing asset management services to clients. MM SPC is a wholly-owned subsidiary of MM Capital.

On March 15, 2019, the Company incorporated MM Global Capital Limited, a Hong Kong company, for the purpose of providing assets management and investment services to clients, and subsequently changed its name to HC Securities (HK) limited ("HC Securities") on December 22, 2021. HC Securities is a wholly-owned subsidiary of MMTEC. HC Securities applied license to SFC and was approved on December 21, 2021. HC Securities is licensed on dealing in securities, advising on securities and asset management.

On July 9, 2019, the Company acquired 49% of a newly-formed entity called Xchain Fintech Pte.Ltd., ("Xchain"), a Singapore company which was incorporated in July 2019, for the purpose of providing technical support for the construction and development of a new solutions for the existing problems of the traditional financial industry, the difficulty experienced by investors in investing and allocating investment assets globally, and the protection of funds and investments by using advanced technologies, such as artificial intelligence, big data analysis and blockchain. Xchain is dormant as of December 31, 2024.

On March 23, 2020, the Company acquired all outstanding securities of MMBD Investment Advisory Company Limited ("MMBD Advisory") for a consideration of $1,000, which was subsequently given up by Hinman Au. Prior to this transaction, all outstanding securities of MMBD Advisory were owned by Hinman Au, a director and 1.4% shareholder of the Company. MMBD Advisory was formed in January 2018 in the U.S. and is registered as an investment advisor firm under the laws of the State of New York on May 7, 2018. Since May 23, 2020, MMBD Advisory was consolidated into the Company.

On September 13, 2021, the Company incorporated Fundex SPC, a Cayman Islands company, for the purpose of providing asset management services to clients, as a wholly-owned subsidiary of MM Capital.

On April 13, 2023, the Company incorporated Haichuan Zhixin (Beijing) Technology Co., Ltd ("Haichuan Zhixin"), as a wholly-owned subsidiary of MM Future.

On May 16, 2023, the Company acquired 85% of Alpha Mind Technology Limited, a BVI company ("Alpha Mind"), for aggregate purchase price of $99,650,000, of which $1,000,000 was paid during year ended 2022 as a deposit for potential acquisition. The deposit was included in "deposit for business acquisition" on the accompanying consolidated balance sheets as of December 31, 2022. The deposit was treated as part of the consideration. Alpha Mind was incorporated on April 17, 2023, under the laws of BVI, and operates as an agency to sell insurance products in PRC, through variable interest entities ("VIE"). The acquisition was closed on June 7, 2023. On November 22, 2023, the Company announced its plan to sell all of the outstanding shares of Alpha Mind to XChange TEC.INC (formerly known as "FLJ Group Limited") ("XChange"), a Cayman Islands company. The transaction was closed on December 28, 2023.

On November 18, 2023, the Company disposed all of the outstanding securities of MMBD Advisory to Top Fintech Inc., for a consideration of $1,000, and disposed all the outstanding securities of MM Capital to Capital Jasmine Ltd., for a consideration of $500. The two wholly-owned subsidiaries of MM Capital, MM SPC and Fundex SPC were accordingly disposed of. The transaction was closed on November 18, 2023.

On February 16, 2024, the Company incorporated HAI TEC INC. ("HAI TEC") under the laws of the BVI, for the purpose of being a holding company for the equity interest in our operating subsidiaries in China and other countries and regions. HAI TEC is a wholly-owned subsidiary of MMTEC.

On March 12, 2025, the Company transferred all outstanding shares in HC Securities, our wholly-owned subsidiary, to HAI TEC, for a total consideration of HK$16,573,925 (equivalent to approximately $2.13 million). The share transfer was completed on March 12, 2025, resulting in HC Securities becoming a wholly-owned subsidiary of HAI TEC.

On June 30, 2025, MM Fund was struck from the Company Register and thereupon dissolved. Haichuan Zhixin, our wholly-owned subsidiary of MM Future incorporated on April 13, 2023, was dissolved on December 26, 2025.

On September 26, 2025, the Company incorporated Hai Capital Management Ltd ("Hai Capital") under the laws of the BVI. Hai Capital is a wholly-owned subsidiary of MMTEC.

On October 3, 2025, the Company incorporated HC Investment Limited ("HC Investment"), a Hong Kong company. HC Investment is a wholly-owned subsidiary of HAI TEC.

MMTEC and its consolidated subsidiaries are collectively referred to herein as the "Company", "we" or "us", unless specific reference is made to an entity.

**NOTE 2 – <u>BASIS OF PRESENTATION</u>**

The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and with the rules and regulations of the U.S. Securities and Exchange Commission for financial information.

The Company's consolidated financial statements include the accounts of MMTEC and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

**NOTE 3 – <u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</u>**

**Use of Estimates**

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the years ended December 31, 2025, 2024 and 2023 include the allowance for credit losses, valuation of convertible promissory notes and valuation of deferred tax assets.

**Fair Value of Financial Instruments and Fair Value Measurements**

 

The Company adopted the guidance of Accounting Standards Codification ("ASC") 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date .

● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data .

● Level 3-Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information .

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, security deposits- current portion, prepaid expenses and other current assets, salary payable, advance from customer, operating lease liabilities- current and accrued liabilities, convertible promissory notes and other payables approximate their fair market value based on the short-term maturity of these instruments.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from or due to related parties due to their related party nature.

**Cash and Cash Equivalents**

 

Cash and cash equivalents consist of cash on hand, demand deposits and time deposits in bank, which are unrestricted as to withdrawal and use that which have original maturities of three months or less when purchased.

**Loan Receivable, Net**

Loan receivable, net is recorded at the uncollected principal balances, net of an allowance for doubtful accounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Estimates are based on historical collection experience and current economic conditions.

**Concentrations of Credit Risk**

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. To limit exposure to credit risk relating to deposits, the Company places its cash and cash equivalent deposits with large financial institutions in the United States and the PRC, which management considers are of high credit quality.

**Property and Equipment**

 

Property and equipment, including assets acquired through finance leases, are stated at cost less accumulated depreciation, and depreciated on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows:

---

| | |
|:---|:---|
|  | **Estimated useful life** |
| Office equipment and furniture | 3 - 5 Years |
| Leasehold improvement | The lesser of remaining lease term or 2 - 3 Years |
| Software | 1 - 3 Years |
| Finance lease right-of-use asset | 4 Years |

---

**Long-term Investments**

The Company's long-term investments consist of equity investments without readily determinable fair value which were accounted for using measurement alternative and equity method investments. As of December 31, 2025 and 2024, the Company's long-term investments were both nil.

**<u>Equity Investment Using Measurement Alternative</u>**

The Company uses the measurement alternative for those investments over which the Company does not have significant influence, and without readily determinable fair value and do not qualify for the net asset value practical expedient in accordance with ASU 2016-01, "Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" which was adopted on January 1, 2019. The adoption did not have a significant impact on the Company's consolidated financial statements. The Company records these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investments are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer.

The Company periodically reviews its equity investment for impairment. At each reporting date, an entity that uses the measurement alternative to measure an equity investment without a readily determinable fair value is required to make a qualitative assessment of whether the investment is impaired. The Company regularly evaluates the impairment of these investments based on performance and financial position of the investee as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee's cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss recognized equal to the excess of the investment cost over its fair value at the end of each reporting period for which the assessment is made. The fair value would then become the new cost basis of investment.

**<u>Equity Method Investment</u>**

The Company uses the equity method of accounting for its investment in, and earning or loss of, company that it does not control but over which it does exert significant influence. The Company initially records its investment at cost and the difference between the cost of the equity investee and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is included in the equity method investment on the consolidated balance sheets. The Company subsequently adjusts the carrying amount of the investment to recognize the Company's proportionate share of each equity investee's net income or loss into earnings after the date of investment. If an equity investment no longer qualifies to be accounted for under the equity method, the investment's initial basis for which subsequent changes in fair value are measured should be the previous carrying amount of the investment.

The Company periodically reviews its equity investment for impairment. Under the equity method of accounting, an impairment loss would be recorded whenever the fair value of an equity investment is determined to be below its carrying amount and the reduction is considered to be other than temporary. In judging "other than temporary," the Company considers the length of time and extent to which the fair value of the investment has been less than the carrying amount of the equity investment, the near-term and long-term operating and financial prospects of the entity and the Company's longer-term intent of retaining its investment in the entity. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable. If the Company considers any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value.

See **NOTE 8** for discussion of long-term investments.

**Value Added Tax**

Gujia is subject to value added tax ("VAT") for services rendered at a rate of 6%. Gujia was identified as a general VAT payer on December 1, 2021. Haichuan Zhixin is subject to 3% VAT as small-scale tax payer. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of professional services provided. The Company reports revenue net of PRC's value added tax for all the periods presented in the consolidated statements of operations and comprehensive income/ (loss). All entities in China are also subject to surcharges on value-added tax payments in accordance with PRC law.

**Convertible Promissory Notes**

Under Accounting Standard Codification Topic 470, "Debt with Conversion and Other Options" (ASC 470), the Company classified convertible promissory notes as non-current liabilities on consolidated balance sheet. Convertible promissory notes issued at par are recorded at face value, with discount amortized over the note term using the effective interest method. The effective interest rate method is applied to amortize the note discount over the note's life. Interest expenses are recognized in the consolidated statement of operation in the period in which they are incurred. Upon conversion the carrying amount of the convertible promissory notes, including any unamortized premium, discount, or issuance costs, shall be reduced by, if any, the cash (or other assets) transferred and then shall be recognized in the capital accounts to reflect the shares issued and no gain or loss is recognized.

**Revenue Recognition**

Under Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers" ("ASC 606"), the Company recognizes revenue when a customer obtains control of promised goods, in an amount that reflects the consideration which the Company expects to receive in exchange for the goods. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods it transfers to the customer.

The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers.

**<u>Market data services and investor relation management services revenue</u>**

The Company generates these revenues by providing services under written service contracts with its customers. Revenue related to its service offered is recognized over time as the services are performed when the performance obligation is satisfied.

**<u>Placement agent services</u>**

The Company generates revenue from placement agent services by successfully selling customers' stocks to qualified investors through registered offerings or private placement activities. Placement agent fee is recognized when the services are completed.

**<u>Software development and post-contract maintenance</u>**

The Company generates revenue from software development and post-contract maintenance. The Company identifies two performance obligations, as the customers can benefit from software development and post-contract maintenance separately. The transaction price is fixed in the contract and the Company allocates the transaction price to software development and maintenance by reference to their relative standalone selling price estimated. The Company determines the standalone selling price based on pricing objectives, taking into consideration market conditions. The Company recognizes revenue of software development at a point of customer acceptance. The post-contract maintenance service is performed on a standby ready basis and provided to the customer subsequent to the transfer of the software for a period of time, typically 12 months from customer acceptance. The Company recognizes revenue of maintenance over the service period.

**<u>Commissions</u>**

The Company generates revenue from commissions through customers' transactions in stocks by providing brokerage service for its customers. Commission revenue is recognized at a point in time on the trade date when the performance obligation is satisfied.

**<u>Consulting services</u>**

The Company provides consulting services as source of revenue. Pursuant to the consulting service contracts entered into between the Company and client, the Company's obligation includes providing investment information and professional services on finance and law. The Company recognizes revenue when the client confirms the certain types of services specified in the contract are received, and pays for the service fee.

The following table disaggregates the Company's revenue by revenue type:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | **US$** | **US$** | **US$** |
| Consulting services | $- | $- | $800000 |
| Software development and post-contract maintenance | - | - | 24098 |
| Placement agent services | 807500 | 1860000 | 45837 |
| Other revenue | - | 8333 | - |
| **Total revenues** | $**807500** | $**1868333** | $**869935** |

---

The following table disaggregates the Company's revenue by geographic area:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | **US$** | **US$** | **US$** |
| China | $- | $- | $824098 |
| United States | 807500 | 1868333 | 45837 |
| **Total revenues** | $**807500** | $**1868333** | $**869935** |

---

**Cost of Revenue**

Cost of revenue consists primarily of internal labor cost and related benefits, and other overhead costs that are directly attributable to service provided.

**Research and Development**

 

Expenditures for research and product development costs are expensed as incurred.

For the years ended December 31, 2025, 2024 and 2023, research and development expenses were $40,215, $73,285, and $363,958, respectively, included in "Cost of revenue", "Payroll and related benefits" and "Other general and administrative" on the accompanying consolidated income statements.

**Selling and Marketing Costs**

 

All costs related to selling and marketing are expensed as incurred. For the years ended December 31, 2025, 2024 and 2023, selling and marketing costs were $342,816, $715,976, and $901,319 respectively.

**Leases**

On January 1, 2019, the Company adopted ASU No. 2016-02, "Leases (Topic 842)," as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.

Under the new lease standard, the Company determines if an arrangement is or contains a lease at inception. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of remaining lease payments over the lease terms. The Company considers only payments that are fixed and determinable at the time of lease commencement. See **NOTE 15** for discussion of operating leases.

**Segment Information**

ASC 280 "Segment reporting" establishes standards for reporting information on operating segments in interim and annual financial statements. Operating segments are defined as the components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision makers direct the allocation of resources to operating segments based on the profitability, cash flows, and growth opportunities of each respective segment.

The Company currently has two operating segments, Gujia, MM Future, HC Securities, and MM Global. See **NOTE 17** for details.

**Income Taxes**

The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, "Income Taxes." Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 "Income Taxes". Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. For the years ended December 31, 2025, 2024 and 2023, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. Tax years that remain subject to examination are the years ended December 31, 2025, 2024 and 2023. The Company recognizes interest and penalties related to significant uncertain income tax positions in other expense. No such interest and penalties incurred for the years ended December 31, 2025, 2024 and 2023.

**Foreign Currency Translation**

The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company, MMTEC, and MM Future, MM Fund, MMBD Trading, HC securities, MM Global and HAI TEC is the U.S. dollar. The functional currency of Gujia and Haichuan Zhixin is the Chinese Renminbi ("RMB"). For the subsidiary whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss.

Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. All of the Company's revenue and expense transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

The consolidated balance sheet amounts, with the exception of equity, as of December 31, 2025 and 2024, were translated at RMB 7.0288 to $1.00 and RMB 7.1884 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated statements of operations and comprehensive income/ loss and cash flows for the years ended December 31, 2025, 2024 and 2023 were RMB 7.1429, RMB 7.1217, and RMB 7.0467 to $1.00, respectively.

**Comprehensive Income/ (Loss)**

Comprehensive income/ loss is comprised of net income and loss and all changes to the statements of shareholders' equity, except those due to investments by shareholders, changes in paid-in capital and distributions to shareholders. For the Company, comprehensive income/ loss for the years ended December 31, 2025, 2024 and 2023 consisted of net income /loss and unrealized income/loss from foreign currency translation adjustment.

**Share-based Compensation**

Share based compensation arise from share-based awards, including share options for the purchase of the Company's ordinary shares. In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07, "Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07")" to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. The Company adopted ASU 2018-07 on January 1, 2019, and accounts for share-based compensation to nonemployees under the fair value method which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement of operations over the requisite service period. The Company recognized nil share-based compensation for the years ended December 31, 2025, 2024 and 2023, respectively. See details in **NOTE 13**.

**Earnings per share**

ASC Topic 260 "Earnings per Share," requires presentation of both basic and diluted earnings per share ("EPS") with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

Basic net income (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Common stock equivalents are not included in the calculation of diluted loss per common share if their effect would be anti-dilutive. Potential common shares in the diluted net loss per share computation are excluded in periods of losses from continuing operations as their effect would be anti-diluted. For the years ended December 31, 2025, 2024 and 2023, there were no dilutive shares. The following table presents a reconciliation of basic and diluted net income (loss) per common share:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended<br> December 31,<br> 2025** | **Year Ended<br> December 31, <br> 2024** | **Year Ended<br> December 31, <br> 2023** |
| Net loss from continuing operations for basic and diluted net loss per share of common stock | $(56075245) | $(91168280) | $(7848380) |
| Net income from discontinued operations for basic and diluted net income per share of common stock | $- | $- | $53267761 |
| Weighted average common stock outstanding – basic and diluted\* | 53562569 | 24996144 | 13221897 |
| Net loss per common share from continuing operations - basic and diluted\* | $(1.05) | $(3.65) | $(0.59) |
| Net income per common share from discontinued operations - basic and diluted\* | $- | $- | $4.03 |

---

\* After giving effect to the reverse stock split effected on December 18, 2024. Also see Note 13.

The Company did not have any common stock equivalents and potentially dilutive common stock outstanding during the years ended December 31, 2025, 2024 and 2023.

**Related Parties**

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

**Fiscal Year End**

The Company has adopted a fiscal year end of December 31.

**Recent Accounting Pronouncements**

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments (Topic 326)", and issued subsequent amendments to the initial guidance, transitional guidance and other interpretive guidance between November 2018 and March 2020 within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03. ASU 2016-13 introduces new guidance for credit losses on instruments within its scope, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life, instead of when incurred. For smaller reporting companies, the guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. All entities may adopt this ASU through a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company adopted ASU 2016-13 and 2018-19 on January 1, 2023, using a modified retrospective approach. The adoption of this standard did not have a material impact on the Company's consolidated financial statements

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. For public business entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted ASU 2020-06 on January 1, 2022. The adoption did not have an impact on the Company's consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker. The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments in ASU 2023-07 are required to be adopted for fiscal years beginning after December 15, 2023 for public entities. The Company adopted ASU 2023-07 on January 1, 2024 and the adoption of the standard did not have a material impact to the overall financial presentation.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires that entities disclose specific categories in their rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The provisions of ASU 2023-09 is applied in the annual financial statements for the year ended December 31, 2025.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (collectively with subsequent amendments in ASU 2025-01, "ASU 2024-03"). This ASU requires new financial statement disclosures disaggregating prescribed expense categories within relevant income statement expense captions. ASU 2024-03 will be effective for the Company beginning December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of adopting the standard.

**NOTE 4 – RESTATEMENTS**

The Company had amended and restated its December 31, 2023 audited consolidated financial statements. In November 2024, the management conducted a review on the computing of interest expense of convertible promissory note in the aggregate original principal amount of $70 million issued on March 31, 2023. As a result of this review, it was concluded that there were accounting errors in the previously filed financial statements, the interest expense and accrued interest as of December 31, 2023 was understated by approximately $3.46 million. The resulting corrections are noted in the adjustments column in the following tables.

The December 31, 2023 audited consolidated financial statements were restated to correct errors in accounting for accrued liabilities and other payables, and retained earnings.

***<u>The following table summarizes changes made to the December 31, 2023 audited consolidated balance sheets:</u>***

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **As reported** | **Adjustment** | **As restated** |
| Balance Sheet: |  |  |  |
| Accrued liabilities and other payables | $1070270 | $3456400 | 4526670 |
| Total Liabilities | 34622814 | 3456400 | 38079214 |
| Retained Earnings | 26705053 | (3456400) | 23248653 |
| Total shareholders' equity attributable to MMTEC, INC. | 122364406 | (3456400) | 118908006 |
| Total liabilities and shareholders' equity | $156987220 | $- | $156987220 |

---

The December 31, 2023 audited condensed consolidated financial statements were restated to correct errors in accounting for interest expense.

***<u>The following table summarizes changes made to the December 31, 2023 audited consolidated statements of operations and comprehensive loss:</u>***

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **As Reported** | **Adjustment** | **As Restated** |
| Interest expense | $(746410) | (3456400) | (4202810) |
| NET LOSS | (4391980) | (3456400) | (7848380) |
| NET INCOME ATTRIBUTABLE TO MMTEC, INC. | $48958083 | $(3456400) | $45501683 |
| GAIN(LOSS) EARNINGS PER SHARE - BASIC AND DILUTED |  |  |  |
| Continuing operations | (0.04) | (0.55) | (0.59) |
| Discontinued operations | 0.51 | 3.52 | 4.03 |

---

***<u>The following table summarizes changes made to the December 31, 2023 audited consolidated statements of cash flows:</u>***

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **As Reported** | **Adjustment** | **As Restated** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |
| Net loss from continuing operations | $(4391980) | $(3456400) | $(7848380) |
| Adjustments to reconcile net loss from operations to net cash used in operating activities: |  |  |  |
| Imputed interest expense | 693299 | 3506701 | 4200000 |
| Interest income on notes receivable | - | (50301) | (50301) |
| NET CASH USED IN OPERATING ACTIVITIES: | $(5151508) | $- | $(5151508) |

---

**NOTE 5 – <u>BUSINESS COMBINATION</u>**

<u>Acquisition of Alpha Mind</u>

On May 16, 2023, the Company entered into an Equity Acquisition Agreement (the "Purchase Agreement") with Alfa Crest Investment Limited, a BVI company ("Alfa Crest"), CapitoLabs Limited, a BVI company ("CapitoLabs", and together with Alfa Crest, the "Sellers") and Alpha Mind Technology Limited, a BVI company ("Alpha Mind"). Pursuant to the Agreement, the Sellers agreed to sell and the Company agreed to purchase, the Sellers' shares of Alpha Mind's issued and outstanding ordinary shares, which represent an 85% ownership stake in Alpha Mind, for aggregate purchase price of $99,650,000. The transaction was closed on June 7, 2023.

The Company's acquisition of Alpha Mind was accounted for as a business combination in accordance with ASC 805. The Company allocated the purchase price of Alpha Mind based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions were not material and have been expensed as incurred in general and administrative expense.

The consideration was $99,650,000, consisting of $7.0 million in the form of a convertible promissory note and $92,650,000 in cash of which $3.65 million is converted from loan receivable and other receivable, and $1 million is the acquisition deposit paid during 2022.

The following table presents the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date, which represents the net purchase price allocation on the date of the acquisition of Alpha Mind based on valuation performed by an independent valuation firm engaged by the Company:

---

| | |
|:---|:---|
|  | **USD** |
| **Assets** | |
| Cash and cash equivalents | $916840 |
| Accounts receivable, net | 1963755 |
| Prepayments | 996701 |
| Other receivables, net | 78183 |
| Short-term investment | 271381 |
| Other current assets | 62254 |
| Restricted Cash- non-current | 706005 |
| Property and equipment, net | 57742 |
| Right-of-use asset | 46123 |
| Deferred tax assets | 72228 |
| Intangible assets, net | 5224439 |
| Goodwill | 108218586 |
|  | **118614237** |
| **Liabilities** |  |
| Accounts payables | $1402583 |
| Salary payable | 54709 |
| Other payables | 812170 |
| Taxes payable | 43833 |
| Advance from customer | 93 |
| Deferred tax liability | 1306110 |
| Lease liabilities | 46123 |
|  | **3665621** |
| **Total allocated purchase price** | $**114948616** |

---

The following table presents the purchase price of Alpha Mind for the Company and non-controlling shareholders at the acquisition date. The discount for lack of control (DLOC) is used when valuing the non-controlling interests in the acquisition.

---

| | |
|:---|:---|
|  | **USD** |
| Purchase price for the Company | $99650000 |
| Fair value of non-controlling interest | 15298616 |
| **Total allocated purchase price** | $**114948616** |

---

**NOTE 6 – <u>DISCONTINUED OPERATIONS</u>**

<u>Disposition of Alpha Mind</u>

At the acquisition date as mentioned in **NOTE 5**, the Company expected to sell Alpha Mind within one year and the other criteria required by ASC 205-20 and that the business of Alpha Mind would likely be classified as held for sale within a short period. Thus, the business of Alpha Mind is reported as discontinued operation on acquisition. On November 22, 2023, the Company entered into an Equity Acquisition Agreement with Burgeon Capital Inc, a BVI company ("BCI" and together with MMTEC, the "Sellers"), XChange, a Cayman Islands company (the "Buyer"), and Alpha Mind. Pursuant to the Purchase Agreement, the Sellers agreed to sell, and XChange agreed to purchase, all of Alpha Mind's issued and outstanding ordinary shares for the aggregate purchase price of $180,000,000, of which $153,000,000 was attributable to the Company's interests in Alpha Mind. The transaction was closed on December 28, 2023.

In connection with the disposition of Alpha Mind, the Company recorded a gain on disposal of $53,898,677, which is included in the "Net gain on sale of discontinued operations, net of applicable income taxes" of the consolidated statements of operations as part of income from discontinued operations for the year ended December 31, 2023.

Alpha Mind had a net loss of $548,677 for the period from acquisition date June 7, 2023 through December 28, 2023, the date of disposal, which is included in the "Gain (Loss) from discontinued operations, net of applicable income taxes" of the consolidated statements of operations as part of loss from discontinued operations for the year ended December 31, 2023.

<u>Disposition of MMBD Advisory and MM Capital, MM SPC and Fundex SPC</u> 

On November 18, 2023, the Company disposed all the outstanding securities of MMBD Advisory to Top Fintech Inc., for a consideration of $1,000, and disposed all the outstanding securities of MM Capital to Capital Jasmine Ltd., for a consideration of $500. MM SPC and Fundex SPC are the two wholly-owned subsidiaries of MM Capital, they were disposed with MM Capital at the same time. The transaction was closed on November 18, 2023. As a result, the result of operations of MMBD Advisory and MM Capital, MM SPC and Fundex SPC is reported as discontinued operations under the guidance of ASC 205.

Reconciliation of the amounts of income and losses from discontinued operations in the consolidated statements of operations and comprehensive income/ (loss) for the year ended December 31, 2023:

---

| | |
|:---|:---|
|  | **For the<br> Year Ended**<br>**December 31,<br> 2023** |
| REVENUE | $- |
| COST OF REVENUE | - |
| GROSS PROFIT | - |
| OPERATING EXPENSES: |  |
| &nbsp;&nbsp;&nbsp;Selling and marketing | - |
| &nbsp;&nbsp;&nbsp;General and administrative |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payroll and related benefits | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 1528 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other general and administrative | 812 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Operating Expenses | 2340 |
| NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS | $(2340) |

---

As of November 18, 2023, the assets and liabilities of discontinued operations and reconciliation of gain on sale of discontinued operations of MMBD Advisory and MM Capital, MM SPC and Fundex SPC is as follows:

---

| | |
|:---|:---|
|  | **November 18,**<br>**2023** |
| CURRENT ASSETS: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $15280 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 95774 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets of discontinued operations | 111054 |
| Total assets of discontinued operations | $111054 |
| CURRENT LIABILITIES: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities and other payables | 29655 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities of discontinued operations | 29655 |
| Total liabilities of discontinued operations | $29655 |
| Total consideration received | 1500 |
| Less: carrying amount of net assets | 81399 |
| Total loss on sale of discontinued operations | $(79899) |

---

**NOTE 7 – <u>PREPAID EXPENSES AND OTHER CURRENT ASSETS</u>**

As of December 31, 2025 and 2024, prepaid expenses and other current assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Prepaid professional service fees | $9856 | $14476 |
| Other receivables<sup>(1)</sup> | 4847 | 4961 |
| Others<sup>(2)</sup> | 155013 | 123828 |
|  | $169716 | $143265 |

---

Notes:

(1) Other receivables mainly consist of other receivables from third parties and advances to employees.

(2) Others mainly consist of deductible value-added tax.

**NOTE 8 – <u>LONG-TERM INVESTMENTS</u>**

The Company's long-term investments consist of equity investments without readily determinable fair value which were accounted for using measurement alternative and equity method investments. As of December 31, 2025 and 2024, the Company's long-term investments were nil on the consolidated balance sheet.

**<u>Equity Investment Using Measurement Alternative</u>**

On July 1, 2019, the Company invested RMB 1.0 million (approximately $143,000) to acquire a 4.9% interest in Caishang Education Technology (Beijing) Co., Ltd ("Caishang"). Since the Company does not exercise significant influence over Caishang and Caishang does not have readily determinable fair value as a privately held Company, the investment was accounted for using measurement alternative, in which the Company record the investment at cost, less impairment, and plus or minus subsequent adjustments for observable price changes.

On January 1, 2020, the Company invested RMB 5.7 million (approximately $817,000) to acquire a 35% interest in Xtransfer. As Xtransfer failed to fulfill the restrictive terms prescribed in the investment agreement, on October 31, 2020, Xtranfer agreed to return RMB 2.6 million (approximately $399,000) to the Company and reduce the Company's interest to 19%. The investment was accounted for under the equity method prior to the return of investment, and the carrying amount of the investment on October 31, 2020 was RMB 2.8 million (approximately $425,000). Since the Company no longer has significant influence over Xtransfer after the return of investment and Xtransfer does not have readily determinable fair value as a privately held company, the remaining investment was accounted for using measurement alternative, in which the initial basis of the investment is the carrying amount as of October 31, 2020 and subsequently adjusted for any impairment and observable price changes.

The Company reviews its investments for impairment based on performance and financial position of the investees as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee's cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. The Company recorded impairment on long-term investments for an amount of RMB3,776,275 (approximately $585,000) during the year ended December 31, 2021. As a result, the carrying value of long-term investments was reduced to zero.

**NOTE 9 – NOTES RECEIVABLE**

Pursuant to the Equity Acquisition Agreement dated November 22, 2023, MMTEC and Burgeon Capital Inc, a British Virgin Islands company (together with MMTEC, the "Sellers") agreed to sell all of the issued and outstanding ordinary shares of Alpha Mind to XChange for the aggregate purchase price of $180,000,000. The transaction was closed on December 28, 2023. At closing, XChange agreed to provide the Sellers with promissory notes for the Purchase Price less certain adjustments as set forth in the Purchase Agreement. The Company holds an 85% ownership stake in Alpha Mind which represent $153,000,000 of notes receivable. The promissory notes were to mature in 90 days and be secured by all of the issued and outstanding equity of Alpha Mind as well as all of the assets of Alpha Mind and its subsidiaries. The maturity dates of the notes were extended from March 25, 2024 to December 31, 2025, with a provision that if any balance remains outstanding on that date, it will automatically extend to the end of the following year, pursuant to the Amendments To Secured Promissory Notes dated June 30, 2025.

The Company engaged a third party specialist to conduct business valuation based on financial cash flow forecast from 2023 to 2033 of Alpha Mind, and selected five comparable insurance agency companies for market method comparison. The Company assesses the consideration of $153 million is at fair value, and there is no indicators of impairment.

The Company expects to recover the full amount of note receivable over one year, either by cash or transfer of shares. Thus, the Company classifies the notes receivable to a non-current asset on the accompanying consolidated balance sheet as of December 31, 2025. During 2025, $4,000,000 in principal repayment were received, with $1,363,050 in accrued interest income recognized. On April 12, 2025, the Company sold a portion of the promissory notes representing $51,988,242.00 of the outstanding amount, of which the unpaid principal is $50,000,000 and unpaid interest is $1,988,242, to a third party in consideration of the third party's payment of $5,000,000 in immediately available funds. The Company discontinued the accrual of interest income since the credit risk of XChange significantly increases. As of December 31, 2025 and 2024, the principal balance of notes receivable amounted to $93,858,942 and $147,858,942, respectively, with accrued interest receivable of $3,978,352 and $4,603,544 for the respective periods.

The Company periodically reviews notes receivable for impairment if there is any sign indicating that the carrying amount of notes receivable may not be fully recoverable. Factors to consider in these reviews include historical collection experience, aging of receivables, credit history and financial conditions of the issuer. In accordance with Topic 326, the Company recognizes the impairment based on the calculation of expected credit loss allowance of XChange. As of December 31, 2025, the Company recognized $88,427,734 allowance for credit losses on notes receivable, and the carrying amount turned out to be $9,409,560.

**NOTE 10 – <u>ACCRUED LIABILITIES AND OTHER PAYABLES</u>**

As of December 31, 2025 and 2024, accrued liabilities and other payables consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Accrued FINRA fine<sup>(1)</sup> | - | 83700 |
| Accrued interest<sup>(2)</sup> | 78791 | 6472292 |
| Accrued taxes | - | 24525 |
| Others | 5608 | 21425 |
|  | $84399 | $6601942 |

---

Notes:

(1) See Note 15.

(2) Accrued interest payable was primarily attributable to convertible promissory notes, amounted to $78,791 and $6,472,292 as of December 31, 2025 and 2024, respectively. See Note 11.

**NOTE 11 – <u>CONVERTIBLE PROMISSORY NOTES</u>**

<u>Convertible promissory note issued on February 22, 2023</u>

On February 22, 2023, the Company issued an unsecured senior convertible promissory note ("Note 1") of $40 million to a non-U.S. investor ("Investor 1"), bearing interest of 8% per annum. Note 1 will mature 24 months after the effective date. Investor 1 has the right to convert all or any portion of the outstanding balance into ordinary shares at a fixed conversion price. Such conversion price shall be fixed and shall not be adjusted based on future market prices or any other variable factors. Note 1 has an original principal amount of $40,000,000 and Investor 1 paid a purchase price of $32,000,000, reflecting an original issue discount of 20%. On February 24, 2023, Investor 1 converted all outstanding balance of notes into ordinary shares, par value $0.01 (see **Note 13**, $0.08 given effect of the 2024 Reverse Stock Split) per share, at conversion price of $0.5 ($4 given effect of the 2024 Reverse Stock Split) per share, which represents 80,000,000 (10,000,000 given effect of the 2024 Reverse Stock Split) ordinary shares.

<u>Convertible promissory note issued on March 31, 2023</u>

On March 31, 2023, the Company issued a senior convertible promissory note ("Note 2") of not more than $70 million to an investor ("Investor 2"), bearing interest of 8% per annum. Note 2 will mature on the second anniversary of their issuance date, or March 31, 2025. Investor 2 has the right to convert all or any portion of the outstanding balance into ordinary shares at a fixed conversion price. Such conversion price shall be fixed and shall not be adjusted based on future market prices or any other variable factors. Note 2 had an original issue discount of 20%, resulting in an aggregate purchase price of up to $56 million assuming the full purchase of Note 2.

On May 11, 2023, Investor 2 converted $2.82 million of outstanding balance of the note into ordinary shares, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, at conversion price of $0.705 ($5.64 given effect of the 2024 Reverse Stock Split) per share, which represents 4,000,000 (500,000 given effect of the 2024 Reverse Stock Split) ordinary shares. On October 4, 2023, the Company completed the conversion of $30.0 million of outstanding balance of the note into ordinary shares, at a conversion price of $0.30 ($2.4 given effect of the 2024 Reverse Stock Split) per share, which represents 100,000,000 (12,500,000 given effect of the 2024 Reverse Stock Split) ordinary shares. On August 26, 2024, the Company completed the conversion of $705,000 of outstanding balance of the note into ordinary shares, at a conversion price of $0.30 ($2.4 given effect of the 2024 Reverse Stock Split) per share, which represents 2,350,000 (293,750 given effect of the 2024 Reverse Stock Split) ordinary shares.

On December 26, 2024, the Company entered into an agreement with the Purchaser (the "Extension Agreement") pursuant to which the Company and the Purchaser mutually agreed to extend the term of the Notes from two years to six years, from the issuance date to March 31, 2029, and to amend the interest rate of the Notes from 8% per annum to 2% per annum. The other provisions of the Notes remain unchanged.

On September 19, 2025, the Company completed the conversion of $36,475,000 of outstanding balance and $7,495,960 accrued interests payable of Note 2 into ordinary shares, at a conversion price of $0.591 per share, which represents 74,400,947 ordinary shares.

<u>Convertible promissory note issued on June 7, 2023</u>

On June 7, 2023, the Company issued a senior convertible promissory note ("Note 3") of $7.0 million to the sellers of Alpha Mind (the "Seller"), bearing interest of 1% per annum. Note 3 will mature 24 months after the effective date. The Seller has the right to convert all or any portion of the outstanding balance into ordinary shares at a fixed conversion price. Such conversion price shall be fixed and shall not be adjusted based on future market prices or any other variable factors. On June 14, 2023, the Seller converted $3,950,000 of outstanding balance of the note into ordinary shares, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, at a conversion price of $0.395 ($3.16 given effect of the 2024 Reverse Stock Split) per share, which represents 10,000,000 (1,250,000 given effect of the 2024 Reverse Stock Split) ordinary shares. The maturity date was extended to December 31, 2026, pursuant to the Amendments to Secured Promissory Notes entered by and between the Company and the Seller dated on June 30, 2025. As of December 31, 2025, the fair value of Note 3 is $3,050,000, which equals its outstanding principal balance.

As of December 31, 2025, and 2024, the net carrying amount of convertible promissory notes was $3,050,000 and $31,941,830, respectively, with unamortized discount of nil and $7,583,170. The accumulated differences amounted to $99,113,558 and $61,094,673 between derecognized net carrying amounts of convertible promissory notes and shares issued upon conversions were recognized in "Additional paid-in capital" as of December 31, 2025 and 2024, respectively.

The interest expenses of $8,685,630 and $2,272,292 accrued for convertible promissory notes were included in the "Interest expense" section on the accompanying consolidated income statements for the years ended December 31, 2025 and 2024, respectively. Accrued interests payable on these notes were $78,791 and $6,472,292 as of December 31, 2025 and 2024, respectively.

**NOTE 12 – <u>INCOME TAXES</u>**

**British Virgin Islands ("BVI")**

Under the current laws of BVI, MMTEC, MMBD Trading and HAI TEC are not subject to tax on income or capital gain. In addition, payments of dividends by the Company to their shareholders are not subject to withholding tax in the BVI.

**Hong Kong**

Subsidiaries in Hong Kong are subject to 16.5% income tax on their taxable income generated from operations in Hong Kong. The first HK$2 million of profits arising in or derived from Hong Kong are taxed at 8.25% and any assessable profits over HK$2 million are taxed at 16.5%. The Company's subsidiaries, MM Future and HC Securities are incorporated in Hong Kong and had a loss for the years ended December 31, 2025, 2024 and 2023. Therefore, there was no provision for income taxes in the years ended December 31, 2025, 2024 and 2023.

**United States**

MM Global was incorporated in the State of Illinois and operates as a securities broker/dealer in New York, New York. MM Global is subject to Federal, State, and Local income taxes on its net income. For the year ended December 31, 2025, MM Global had an income tax provision of $8,973. For the year ended December 31, 2024, MM Global had an income tax provision of $24,525. MM Global has determined that there are no material uncertain tax positions that require recognition or disclosure in its financial statements.

MM Global's income tax returns are subject to examination by the appropriate tax jurisdictions. As of December 31, 2025, MM Global's federal and state tax returns generally remain open for the last three years.

**PRC**

Gujia and Haichuan Zhixin were incorporated in the PRC and are subject to PRC Enterprise Income Tax ("EIT") on the taxable income in accordance with the relevant PRC income tax laws. On March 16, 2007, the National People's Congress enacted a new enterprise income tax law, which took effect on January 1, 2008. The law applies a uniform 25% enterprise income tax rate to both foreign invested enterprises and domestic enterprises. In the years ended December 31, 2025, 2024 and 2023, Gujia were recognized as small low-profit enterprises and received a preferential income tax rate of 5%. Haichuan Zhixin had a loss for the years ended December 31, 2025, 2024 and 2023. In the years ended December 31, 2025, 2024 and 2023, Gujia and Haichuan Zhixin did not generate any taxable income. Therefore, there was no provision for income taxes in the years ended December 31, 2025, 2024 and 2023 for those entities.

Income (loss) before income taxes and provision for (benefit from) by tax jurisdiction are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the<br> Year Ended**<br>**December 31, <br> 2025** | **For the<br> Year Ended**<br>**December 31, <br> 2024** | **For the<br> Year Ended**<br>**December 31, <br> 2023** |
| Income (loss) before income taxes |  |  |  |
| BVI | $(53468649) | $(89809419) | $(5273322) |
| Hong Kong | (700708) | (695219) | (409755) |
| PRC | (1581818) | (1635067) | (1762803) |
| U.S. | (315097) | 995950 | (402500) |
| Total income (loss) before income taxes | $(56066272) | $(91143755) | $(7848380) |

---

The components of provision for income taxes by tax jurisdiction are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the<br> Year Ended**<br>**December 31, <br> 2025** | **For the<br> Year Ended**<br>**December 31, <br> 2024** | **For the<br> Year Ended**<br>**December 31, <br> 2023** |
| Current income tax provisions |  |  |  |
| BVI | $- | $- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| Hong Kong | - | - | - |
| PRC | - | - | - |
| U.S. federal | 5944 | 20995 | - |
| U.S. state and local | 3029 | 3530 | - |
| Total current income tax provisions | $8973 | $24525 | $- |

---

Cash paid for Income taxes are as follows:

---

| | |
|:---|:---|
|  | **For the<br> Year Ended**<br>**December 31, <br> 2025** |
| U.S. federal | $29510 |
| U.S. state and local | 6991 |
| Total cash paid for income taxes | $36501 |

---

In accordance with the updated requirements of ASU No. 2023-09 for the year ended December 31, 2025, the reconciliations of the statutory income tax rate and the Company's effective income tax rate are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the<br> Year Ended**<br>**December 31,<br> 2025** | **For the<br> Year Ended**<br>**December 31,<br> 2024** | **For the <br> Year Ended**<br>**December 31,<br> 2023** |
| Hong Kong statutory income tax rate | 16.5% | 16.5% | 16.5% |
| Valuation allowance recognized with respect to the loss in the Hong Kong companies | (16.5)% | (16.5)% | (16.5)% |
| Effective income tax rate | 0.0% | 0.0% | 0.0% |
| PRC statutory income tax rate | 25.0% | 25.0% | 25.0% |
| Effect of income tax exemptions and reliefs | (20.0)% | (20.0)% | (20.0)% |
| Valuation allowance recognized with respect to the loss in the PRC companies | (5.0)% | (5.0)% | (5.0)% |
| Effective income tax rate | 0.0% | 0.0% | 0.0% |
| US corporate tax rate | 21.0% | 21.0% | 21.0% |
| Valuation allowance recognized with respect to the loss in the US companies | (23.85)% | (18.54)% | (21.0)% |
| Effective income tax rate | (2.85)% | 2.46% | 0.0% |

---

---

| | | |
|:---|:---|:---|
|  | **For the<br> Year Ended** | **For the<br> Year Ended** |
|  | **December 31,<br> 2025** | **December 31,<br> 2025** |
|  | **Amount** | **Percent** |
| Hong Kong statutory income tax rate | $(115617) | 16.5% |
| Valuation allowance recognized with respect to the loss in the Hong Kong companies | 115617 | (16.5)% |
| Effective income tax rate | $- | 0.0% |
| PRC statutory income tax rate | $(395455) | 25.0% |
| Effect of income tax exemptions and reliefs | 316364 | (20.0)% |
| Valuation allowance recognized with respect to the loss in the PRC companies | 79091 | (5.0)% |
| Effective income tax rate | $- | 0.0% |
| US corporate tax rate | $(66170) | 21.0% |
| Valuation allowance recognized with respect to the loss in the US companies | 75143 | (23.85)% |
| Effective income tax rate | $8973 | (2.85)% |

---

As of December 31, 2025, 2024 and 2023, the components of the Company's deferred income tax assets were set forth below:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31, <br> 2024** | **December 31, <br> 2023** |
| Deferred Tax Assets: |  |  |  |
| Net operating losses carry forward | $1585963 | $1524901 | $1548868 |
| Cutoff adjustments | - | - | - |
| Gross deferred tax assets | 1585963 | 1524901 | 1548868 |
| Less: valuation allowance | (1585963) | (1524901) | (1548868) |
| Net deferred tax assets | $- | $- | $- |

---

As of December 31, 2025, the Company has a net operating loss ("NOL") carry forward for tax purposes of $20,350,289 available to offset future taxable income. The gross amount and expiration dates of NOL carry forward as of December 31, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **Amount** | **Expiration Date** |
| Hong Kong | $2865169 | Indefinite |
| PRC | 15991656 | 2026-2030 |
| U.S. | 1493464 | Indefinite |

---

The Company provided a valuation allowance equal to the deferred income tax asset for the years ended December 31, 2025, 2024 and 2023. The management believes that the Company's cumulative losses arising from recurring business of subsidiaries constituted significant strong evidence that most of the deferred tax assets would not be realizable and this evidence outweighed the expectations that the Company would generate future taxable income. As such, deferred tax assets arise from net operating losses are fully allowed for the years ended December 31, 2025, 2024 and 2023. The allowance increased by $61,062 for the year ended December 31, 2025, decreased by $23,967 for the year ended December 31, 2024, and increased by $310,419 for the year ended December 31, 2023, respectively.

**Accounting for Uncertainty in Income Taxes**

The tax authority of the PRC government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their tax filings. Therefore, the Company's PRC entities' tax filings results are subject to change. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company's PRC entities' tax filings, which may lead to additional tax liabilities. Tax years that remain subject to examination are the years ended December 31, 2025, 2024 and 2023.

ASC 740 requires recognition and measurement of uncertain income tax positions using a "more-likely-than-not" approach. The management evaluated the Company's tax positions and concluded that no provision for uncertainty in income taxes was necessary for the years ended December 31, 2025, 2024 and 2023.

**NOTE 13 – <u>SHAREHOLDERS' EQUITY</u>**

**Common Stock**

The Company is authorized to issue 625,000,000 shares of common stock with a par value of $0.08 per share.

Pursuant to a service agreement dated July 21, 2020, the Company issued 9,375 common shares (given effect of the 2022 and 2024 Reverse Stock Split) to Tony Wayne Network Technology Co., Limited as compensation of a Hong Kong and China based consulting program. The stock-based compensation of $1,005,000 was recognized as part of the "professional fees" in the Company's consolidated statement of operations and comprehensive income/ (loss).

On February 22, 2021, the Company entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered direct offering of 53,750 (given effect of the 2022 and 2024 Reverse Stock Split) of the Company's common shares, at a purchase price of $296.0 per share (given effect of the 2022 and 2024 Reverse Stock Split). The Company sold the common shares for aggregate gross proceeds of $15,910,000. The net proceeds from the transactions were $14,637,200, after deducting certain fees due to the placement agent and the Company's transaction expenses and will be used for working capital and general corporate purposes.

Pursuant to a service agreement dated September 25, 2021, the Company issued 5,328 (given effect of the 2022 and 2024 Reverse Stock Split) shares to Fortune Fintech Limited ("Fortune") on December 28, 2021, as compensation of an investor relationship consulting program. The fair value of the shares on the grant date was $319,820.

On December 20, 2021, the Company entered into a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $2,000,000 investment in the Company in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase 62,500 common shares (given effect of the 2022 and 2024 Reverse Stock Split) of the Company at a purchase price of $32.0 per share (given effect of the 2022 and 2024 Reverse Stock Split). The gross proceeds of the transaction were $2.0 million before deducting fees and other expenses.

Pursuant to a restricted stock award agreement dated December 17, 2021, the board issued 6,641 shares (given effect of the 2022 and 2024 Reverse Stock Split) to employees as 2020 awards on December 31, 2021. The fair value of the shares on the grant date was $475,514.

Pursuant to the restricted stock award agreement dated December 24, 2021, the board issued 3,656 shares (given effect of the 2022 and 2024 Reverse Stock Split) to former employees on December 31, 2021. The fair value of the shares on the grant date was $229,028.

Effective on July 13, 2022, the Company approved a reverse stock split of the Company's authorized and issued and outstanding shares of common stock, par value $0.001 per share, at a ratio of 10-for-1 (the "2022 Reverse Stock Split"). As a result of the 2022 Reverse Stock Split, the Company's authorized shares of common stock reduced from 500,000,000 shares to 50,000,000 shares (before the effect of the 2024 Reverse Stock Split), and the par value per share was increased from $0.001 to $0.01 (before the effect of the 2024 Reverse Stock Split).

On August 12, 2022, the Company entered into a common stock purchase agreement with VG Master Fund SPC ("Investor"). Under this common stock purchase agreement, subject to specified terms and conditions, the Company could, from time to time during the term of the purchase agreement, sell to Investor up to the lesser of (a) $5.5 million worth of shares of common stock, par value $0.08 per share (given effect of the 2024 Reverse Stock Split), and (b) the maximum amount of securities the Company is permitted to issue under its existing shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for entering into the purchase agreement, the Company issued 6,667 shares of common stock (given effect of the 2024 Reverse Stock Split) to Investor as direct offering costs. The fair value of the shares on the grant date was $146,137. The $146,137 was capitalized and was subsequently reduced to $112,748 which was included in "Deferred offering cost" on the accompanying consolidated balance sheets for the year ended December 31, 2023 and nil for the year ended December 31, 2024. The Company sold 131,250 common shares (given effect of the 2024 Reverse Stock Split) for aggregate net proceeds of $1,223,251 to the Investor after reduction of $33,389 direct offering cost. The proceeds will be used for working capital and general corporate purposes.

On October 26, 2022, the Company adopted a resolution to amend the Company's Memorandum and Articles of Association to increase the maximum number of shares that the Company is authorized to issue from 50,000,000 to 5,000,000,000 (before the effect of the 2024 Reverse Stock Split).

On October 29, 2022, the Company entered into a Securities Purchase Agreement ("Agreement 1") with an investor. Pursuant to Agreement 1, the Company agreed to sell to this investor 50,000 (given effect of the 2024 Reverse Stock Split) shares of common stock at a purchase price of $4.72 (given effect of the 2024 Reverse Stock Split) for a consideration of $236,000. The Company issued 50,000 (given effect of the 2024 Reverse Stock Split) shares to this purchaser on December 3, 2022 and received consideration on December 30, 2022.

On November 23, 2022, the Company entered into a Securities Purchase Agreement ("Agreement 2") with an investor. Pursuant to Agreement 2, the Company agreed to sell to this investor 62,500 (given effect of the 2024 Reverse Stock Split) shares of common stock at a purchase price of $4.12 (given effect of the 2024 Reverse Stock Split) for a consideration of $257,500. The Company issued 62,500 shares (given effect of the 2024 Reverse Stock Split) to this purchaser on December 7, 2022 and received consideration on December 23, 2022.

On February 22, 2023, the Company issued an unsecured senior convertible promissory note of $40.0 million to a non-U.S. investor. The note has an original principal amount of $40,000,000 and investor paid a purchase price of $32,000,000, reflecting an original issue discount of 20%. On February 24, 2023, the investor converted all outstanding balance of notes into ordinary shares, par value $0.08 (given effect of the 2024 Reverse Stock Split) per share, at conversion price of $4 (given effect of the 2024 Reverse Stock Split) per share, which represents 10,000,000 (given effect of the 2024 Reverse Stock Split) ordinary shares.

On March 31, 2023, the Company issued a senior convertible promissory note of not more than $70.0 million to an investor. The notes have an original issue discount of 20%, resulting in an aggregate purchase price for the offering of up to $56 million assuming the full purchase of notes under the Agreement. On May 11, 2023, the investor converted $2.82 million of outstanding balance of the note into ordinary shares, par value $0.08 (given effect of the 2024 Reverse Stock Split) per share, at conversion price of $5.64 per share (given effect of the 2024 Reverse Stock Split), which represents 500,000 ordinary shares (given effect of the 2024 Reverse Stock Split). On October 4, 2023, the Company completed the conversion of $30.0 million of outstanding balance of the note into ordinary shares, at a conversion price of $2.4 per share (given effect of the 2024 Reverse Stock Split), which represents 12,500,000 ordinary shares (given effect of the 2024 Reverse Stock Split). On August 26, 2024, the Company completed the conversion of $705,000 of outstanding balance of the note into ordinary shares, at a conversion price of $2.4 per share (given effect of the 2024 Reverse Stock Split), which represents 293,750 ordinary shares (given effect of the 2024 Reverse Stock Split). On September 19, 2025, the Company completed the conversion of $36,475,000 of outstanding balance of the note and $7,495,960 accrued interests payable into ordinary shares, at a conversion price of $0.591 per share, which represents 74,400,947 ordinary shares.

On June 7, 2023, the Company issued a senior convertible promissory note of $7.0 million to the sellers of Alpha Mind. On June 14, 2023, the sellers converted $3,950,000 of outstanding balance of the note into ordinary shares, par value $0.01 per share, at a conversion price of $3.16 per share (given effect of the 2024 Reverse Stock Split), which represents 1,250,000 ordinary shares (given effect of the 2024 Reverse Stock Split).

During fiscal year 2023 and 2024, the Company received $1,430,000 and $2,550,000 from VG Master Fund SPC, for the purpose of purchasing common stock from the Company. These transactions were subsequently rescinded in 2024, with no shares issued. The received amount was initially presented as "Shares to be issued" on the consolidated balance sheet for the year ended December 31, 2023, short-term in nature, non-interest bearing, unsecured and repayable on demand, and was reduced to nil for the year ended December 31, 2024.

On November 21, 2024, the Company adopted a resolution to amend the Company's Memorandum and Articles of Association to increase the maximum number of shares that the Company is authorized to issue from 5,000,000,000 to 625,000,000.

On December 18, 2024, the Company approved a 1-for-8 reverse stock split of the Company's authorized and issued and outstanding shares of common stock, par value $0.01 per share (the "2024 Reverse Stock Split"). As a result of the 2024 Reverse Stock Split, the Company's authorized shares of common stock reduced from 5,000,000,000 shares to 625,000,000 shares, and the par value per share was increased from $0.01 to $0.08. All share and per share amount in the accompanying financial statement for the prior periods have been retroactively adjusted to reflect the 2022 and 2024 Reverse Stock Split.

As a result, there were 99,587,811 common shares issued and outstanding as of December 31, 2025.

**Share-based compensation**

On January 14, 2020, the 2019 Share Incentive Plan was approved by the Company's shareholders at the Annual Meeting, the purpose of which is to provide an incentive for employees and consultant contributing to the Company. The Company has Stock Option Plan with 25,000 shares (given effect of the 2022 and 2024 Reverse Stock Split) authorized for issuance under the Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of the underlying ordinary shares of the Company on the date of grant.

Pursuant to a service agreement dated July 21, 2020, the Company issued 9,375 shares (given effect of the 2022 and 2024 Reverse Stock Split) to Tony Wayne Network Technology Co., Limited ("Tony Wayne") on July 30, 2020 as compensation for a Hong Kong and China based consulting program. The fair value of the shares on the grant date was $1,005,000. The Company recognized the $1,005,000 in full as stock-based compensation to nonemployee during the year ended December 31, 2020.

Pursuant to a service agreement dated September 25, 2021, the Company issued 5,328 shares (given effect of the 2022 and 2024 Reverse Stock Split) to Fortune Fintech Limited ("Fortune") on December 28, 2021 as compensation of an investor relationship consulting program. The fair value of the shares on the grant date was $319,820.

Subject to 2019 Share Incentive Plan, pursuant to the restricted stock award agreement dated December 17, 2021, the Board issued 6,641 shares (given effect of the 2022 and 2024 Reverse Stock Split) to employees as 2020 awards on December 31, 2021. The fair value of the shares on the grant date was $475,514. Pursuant to a restricted stock award agreement dated December 24, 2021, the board issued 3,656 shares (given effect of the 2022 and 2024 Reverse Stock Split) to former employees on December 31, 2021. The fair value of the shares on the grant date was $229,028.

The Company recognized the fair value of the shares $1,024,361 as stock-based compensation to employee and nonemployee during the year ended December 31, 2021. As of the date of this report, all the authorized shares under the 2019 Share Incentive Plan were issued.

On January 17, 2022, the 2021 Share Incentive Plan was approved by the Company's shareholders at the Annual Meeting, the purpose of which is to provide an incentive for employees and consultant contributing to the Company. The Company has a Stock Option Plan with 37,500 shares (given effect of the 2022 and 2024 Reverse Stock Split) authorized for issuance under the Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of the underlying ordinary shares of the Company on the date of grant. As of the date of this report, there were 37,500 shares (given effect of the 2022 and 2024 Reverse Stock Split) available for issuance under the 2021 Share Incentive Plan.

**NOTE 14 - <u>STATUTORY RESERVE</u>**

Gujia operates in the PRC, and is required to reserve 10% of their net profit after income tax, as determined in accordance with the PRC accounting rules and regulations. Appropriation to the statutory reserve by the Company is based on profit arrived at under PRC accounting standards for business enterprises for each year. The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends.

Gujia has sustained losses since establishment. During the years ended December 31, 2025, 2024 and 2023, no appropriation to statutory reserves was required as it incurred recurring net losses.

**NOTE 15 – <u>COMMITMENTS AND CONTINGENCIES</u>**

**Operating Lease Commitment**

The Company leases office space under non-cancelable operating lease agreements, which end at various dates in 2026 and 2027. As of December 31, 2025, the Company's operating leases had a weighted average remaining lease term of 1.71 years and a weighted average discount rate of 3.53%. Future lease payments under operating leases as of December 31, 2025 were as follows:

---

| | |
|:---|:---|
|  | **December 31,<br> 2025** |
| 2026 | $307750 |
| 2027 | $180025 |
| Total future lease payments | $487775 |
| Less imputed interest | $(17026) |
| Total lease liabilities | $470749 |
| Less: current portion | $(290703) |
| Operating lease liability, non-current | $180046 |

---

The amortization of the right-of-use asset and interest expense related to the lease liability are recorded as lease expense to produce a straight-line recognition effect in the income statement. For the year ended December 31, 2025, the Company had operating lease costs of $413,949 and short-term lease costs of $57,722. For the year ended December 31, 2024, the Company had operating lease costs of $437,665 and short-term lease costs of $59,570. For the year ended December 31, 2023, the Company had operating lease costs of $446,149 and short-term lease costs of $54,867. Cash paid for amounts included in the measurement of operating lease liabilities were $446,098, $445,424 and $419,855 during the years ended December 31, 2025, 2024 and 2023, respectively.

**Contingencies** 

In the normal course of business, MM Global is engaged in various trading and brokerage activities on a principal and agency basis through a clearing broker. As a regulated FINRA broker-dealer, MM Global is subject to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA rules may have occurred. During fiscal year ended December 31, 2022, FINRA's Department of Enforcement concluded its investigation and alleges that there have been violations of the federal securities laws and FINRA rules. FINRA has issued the settlement for MM Global with a fine of $450,000 to pay through 3 years, an installment plan fee of $38,250, and a prohibition from providing market access to customers for a period of two years. The settlement also prohibits MM Global from engaging in any business in which MM Global provides market access to customers unless and until a registered principal or officer of MM Global certifies in writing to FINRA that the firm revised and enhanced its AML and supervisory procedures related to detecting and investigating suspicious trading activity and potential market manipulation. During the fiscal year ended December 31, 2025, the Company had made payment in the amount of $83,700 and as of December 31, 2025, all the Company's fine has been fully paid.

**NOTE 16 – <u>CONCENTRATIONS</u>**

**Customer**

The following table sets forth information as to each customer that accounted for 10% or more of the Company's revenue for the years ended December 31, 2025, 2024 and 2023.

---

| | | | |
|:---|:---|:---|:---|
| **Customer** | **Year Ended<br> December 31, <br> 2025** | **Year Ended<br> December 31, <br> 2024** | **Year Ended<br> December 31,<br> 2023** |
| A | 100.0% | 99.6% | \*% |
| B | \*% | \*% | 92.0% |

---

\* Less than 10%

**NOTE 17 – <u>SEGMENT INFORMATION</u>**

The Company currently has two operating segments, (i) Gujia, MM Future and HC Securities, which provide market data services and consulting services, and (ii) MM Global, which operates as an introducing broker that clears all transactions through a clearing broker dealer and earns commission income, placement agent services fee and other related income from customers. Unallocated amounts that do not relate to an operating segment have been allocated to "Unallocated." Since most of the Company's long-lived assets are located in the PRC, no geographical information on long-lived assets is presented. Refer to **Note 3** for disaggregated revenue information by geographical region attributed on the basis of the location where the revenue is originated.

The following tables present summary information by segment:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Market data<br> services and<br> consulting<br> services** | **Introducing<br> broker<br> services** | **Unallocated** | **Total** |
| **Year Ended December 31, 2025** | | | | |
| REVENUE | $- | $807500 | $- | $807500 |
| GROSS PROFIT | $- | $174500 | $- | $174500 |
| NET INCOME (LOSS) | $(2282659) | $(324070) | $(53628516) | $(56075245) |
| DEPRECIATION AND AMORTIZATION | $83928 | $- | $- | $83928 |
| CAPITAL EXPENDITURE | $- | $- | $- | $- |
| **Year Ended December 31, 2024** |  |  |  |  |
| REVENUE | $- | $1868333 | $- | $1868333 |
| GROSS PROFIT | $- | $1525250 | $- | $1525250 |
| NET LOSS FROM CONTINUING OPERATIONS | $- | $971425 | $(92139705) | $(91168280) |
| DEPRECIATION AND AMORTIZATION | $46759 | $- | $- | $46759 |
| CAPITAL EXPENDITURE | $5036 | $- | $- | $5036 |
| **Year Ended December 31, 2023** |  |  |  |  |
| REVENUE | $824098 | $45837 | $- | $869935 |
| GROSS PROFIT | $660399 | $36588 | $- | $696987 |
| NET LOSS FROM CONTINUING OPERATIONS | $(1532533) | $(402500) | $(5913347) | $(7848380) |
| DEPRECIATION AND AMORTIZATION | $45782 | $- | $- | $45782 |
| CAPITAL EXPENDITURE | $970 | $- | $- | $970 |
| **As of December 31, 2025** |  |  |  |  |
| TOTAL ASSETS | $6999023 | $772125 | $10647257 | $18418405 |
| **As of December 31, 2024** |  |  |  |  |
| TOTAL ASSETS | $6488002 | $1619121 | $57799734 | $65906857 |

---

**NOTE 18 – <u>SUBSEQUENT EVENTS</u>** 

The Company has evaluated subsequent events through the date the consolidated financial statements are issued, and concluded that no subsequent events have occurred that would require recognition or disclosure in the consolidated financial statements.

## Exhibit 12.1

**Exhibit 12.1**

**Certification Pursuant to Rule 13a-14(a) of the Exchange Act**

I, Xiangdong Wen, certify that:

1. I have reviewed this annual report on Form 20-F of MMTec, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the annual report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: April 2, 2026 | By: | /s/ Xiangdong Wen |
|  | Name: | Xiangdong Wen |
|  | Title: | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 12.2

**Exhibit 12.2**

**Certification Pursuant to Rule 13a-14(a) of the Exchange Act**

I, Min Kong, certify that:

1. I have reviewed this annual report on Form 20-F of MMTec, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the annual report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: April 2, 2026 | By: | /s/ Min Kong |
|  | Name: | Min Kong |
|  | Title: | Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---

## Exhibit 13.1

**Exhibit 13.1**

**Certification**

**Pursuant to 18 U.S.C. Section 1350**

Pursuant to U.S.C. Section 1350 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of MMTec, Inc. (the "Company"), does hereby certify, to such officer's knowledge, that the Annual Report on Form 20-F for the year ended December 31, 2025 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
|  | **MMTEC, INC.** | **MMTEC, INC.** | **MMTEC, INC.** |
| April 2, 2026 | By: | /s/ Xiangdong Wen | /s/ Xiangdong Wen |
|  |  | Name: | Xiangdong Wen |
|  |  | Title: | Chief Executive Officer |
|  |  |  | (Principal Executive Officer) |

---

## Exhibit 13.2

**Exhibit 13.2**

**Certification**

**Pursuant to 18 U.S.C. Section 1350**

Pursuant to U.S.C. Section 1350 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of MMTec, Inc. (the "Company"), does hereby certify, to such officer's knowledge, that the Annual Report on Form 20-F for the year ended December 31, 2025 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
|  | **MMTEC, INC.** | **MMTEC, INC.** | **MMTEC, INC.** |
| April 2, 2026 | By: | /s/ Min Kong | /s/ Min Kong |
|  |  | Name: | Min Kong |
|  |  | Title: | Chief Financial Officer |
|  |  |  | (Principal Financial and Accounting Officer) |

---

## Exhibit 15.1

**Exhibit** 15.1**

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the reference to our firm under the caption "Experts" and to the incorporation by reference of our report dated April 2, 2026 with respect to the consolidated financial statements of MMTEC, INC. as of and for the year ended December 31, 2025, which appears in its Annual Report on Form 20-F for the year ended December 31, 2025, in this Registration Statement on Form F-3 (Registration No. 333-288881) and the related Prospectus of MMTEC, INC. filed with the Securities and Exchange Commission.

/s/ HTL International, LLC

Houston, TX

April 2, 2026

## Exhibit 15.2

**Exhibit 15.2**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the incorporation by reference in the Registration Statement on Form F-3 (No. 333-288881) of our report dated April 9, 2025, with respect to the consolidated financial statements of MMTEC, INC., appearing in this Annual Report on Form 20-F for the year ended December 31, 2025.

/s/ Assentsure PAC

Singapore

April 2, 2026