Company Structure and Operations - The company operates as an offshore holding entity in the British Virgin Islands, with operations conducted in China through a Variable Interest Entity (VIE) structure[30]. - The VIE Agreements involve unique risks, including regulatory uncertainties regarding foreign ownership in China, which could materially affect operations and share value[44]. - The company is subject to potential changes in PRC government regulations that could disallow the VIE structure, impacting operations and share value significantly[45]. - The Equity Pledge Agreement allows the company to enforce rights over the VIE's equity interests in case of contractual breaches[39]. - The Exclusive Purchase Rights Agreement grants the company an option to purchase equity interests in the VIE, subject to PRC laws[40]. - The Proxy Agreement enables the company to exercise shareholder rights in the VIE without consent from the VIE's shareholders[43]. - The company relies on the VIE structure for business operations, which may not provide the same level of control as direct ownership[176]. - Potential conflicts of interest may arise between the VIE shareholders and the company, impacting financial performance[178]. - The legal environment in the PRC may hinder the enforcement of VIE Agreements, potentially affecting the consolidation of financial statements[216]. Financial Performance and Risks - Meiwu Shenzhen has recorded negative monthly profits from April 2019 to December 2022, resulting in no service fees being paid to the company[35]. - Cumulative income for January 2020 was RMB 456.08 million, with cumulative losses reaching RMB 3,079.56 million by December 2020[37]. - As of December 2022, cumulative income was RMB 1,160.57 million, while cumulative losses had increased to RMB 1,469.69 million[37]. - The company intends to reinvest future earnings into business expansion and does not anticipate paying cash dividends in the foreseeable future[51]. - Current PRC regulations allow the WFOE to pay dividends only from accumulated profits, and at least 10% of after-tax profits must be set aside for statutory reserves[53]. - The company may face difficulties in obtaining foreign currency for dividend payments due to PRC government controls[54]. - If considered a PRC tax resident enterprise, dividends paid to overseas shareholders may be subject to a withholding tax rate of up to 10%[55]. - The company experienced a significant sales decrease of 81% in 2022 compared to the previous year due to COVID-19-related transportation shutdowns in cities like Shenzhen[160]. - The company does not foresee paying cash dividends in the foreseeable future, intending to retain earnings for funding growth[150]. - The company is dependent on income generated by its subsidiaries for distributions and dividends, which may be affected by their financial performance[147]. - The company’s financial condition may be adversely affected by fluctuations in exchange rates and regulatory scrutiny over its corporate structure[76]. - Fluctuations in exchange rates could materially affect the company's results of operations and the value of shares, as revenues and expenditures are primarily in RMB[225]. Regulatory Environment - The CSRC's Trial Administrative Measures for Overseas Securities Offering and Listing became effective on March 31, 2023, requiring domestic companies to complete filing procedures within three working days of submission[50]. - Companies listed overseas before March 31, 2023, are not required to make immediate filings but must comply for subsequent offerings[50]. - The company has not received any formal inquiry or notice from the CSRC regarding its listing on the Nasdaq Capital Market[50]. - The regulatory environment in the PRC remains uncertain, with potential impacts on the company's ability to operate and list overseas[60]. - The company is not required to obtain permission from PRC authorities for its operations, but faces risks related to potential future regulatory changes that could materially affect its business structure and operations[65]. - The approval of the China Securities Regulatory Commission may be required for future offerings in the U.S., introducing uncertainty regarding compliance[164]. - The CAC Revised Measures require online platform operators with personal information of at least one million users to undergo cybersecurity reviews before listing overseas, potentially affecting the company's ability to go public[209]. - The PRC tax authorities may audit related party transactions within ten years, potentially leading to tax adjustments if deemed inconsistent with arm's length principles[180]. Market and Competitive Risks - The company is exposed to risks from economic recession and market volatility, which could adversely impact demand for its products and overall financial performance[70]. - The company faces significant competition in the food product industry, which may impact its ability to maintain sales and profit margins[85]. - The company must adapt to rapidly changing consumer preferences and maintain competitive pricing to retain customers on its e-commerce platform[82]. - The company’s ability to attract new customers and increase mobile engagement is critical for its growth in the e-commerce sector[88]. - Economic recessions could adversely affect discretionary spending, leading to reduced orders for food products[140]. - The company faces risks from supply chain disruptions due to extreme weather and natural disasters, which could adversely affect raw material availability[116]. - Food safety concerns and product quality issues could damage the company's reputation and lead to increased operational costs and decreased demand[122]. - The absence of long-term contracts with suppliers allows them to reduce order quantities or terminate sales, potentially harming revenue and profits[120]. - Higher carrier prices may decrease net revenue margins if the company cannot adjust pricing accordingly[142]. Operational and Management Risks - The company relies heavily on third-party suppliers for food products, and any adverse changes in supply or costs could negatively affect operations[70]. - The company relies on third-party transportation services, which may impact service delivery and quality[143]. - Disruptions in information technology systems could harm business operations and profitability[106]. - The company is subject to payment processing risks, which could impact revenues and operating expenses[107]. - Compliance with evolving data privacy regulations may incur substantial costs and affect business operations[112]. - Cybersecurity breaches could lead to significant legal and financial liabilities, harming the company's reputation and revenue[114]. - The company does not maintain business liability or disruption insurance, exposing it to substantial costs from potential losses[154]. - Future acquisitions may incur significant costs and operational challenges, potentially impacting financial results if not integrated successfully[131]. - Failure to implement business strategies could adversely affect operations and financial performance[93]. Legal and Compliance Risks - The company is subject to risks related to data privacy and security, which could lead to reputational and financial consequences if not managed properly[73]. - The company may face challenges in protecting its intellectual property rights, particularly in China, which could adversely affect its competitive position[152]. - The PCAOB determined on December 15, 2022, that it could secure complete access to inspect registered public accounting firms in mainland China and Hong Kong, but future access may be obstructed by PRC authorities[192]. - The HFCA Act mandates that if a foreign company cannot certify it is not controlled by a foreign government, its securities may be prohibited from trading on U.S. exchanges after two consecutive years of non-inspection[197]. - The company is subject to risks related to the inability of the PCAOB to inspect its auditors, which could lead to delisting from U.S. exchanges if this situation persists for two consecutive years[184]. - The legal system in China is evolving, leading to uncertainties in the interpretation and enforcement of laws, which could limit legal protections[213]. - Changes in political, social, and economic policies in China, the U.S., or Europe may adversely affect the company's business and financial results[202]. - The company may incur increased costs to comply with existing and new regulations imposed by various governmental entities in China, affecting its operational efficiency[207].

Company Formation and Structure - The company was incorporated on December 4, 2018, under the name "Advancement International Limited" and changed its name to "Wunong Net Technology Company Limited" on August 19, 2019[92]. - The company has a variable interest entity structure to control Wunong Shenzhen due to PRC legal restrictions on foreign ownership in telecommunications services[96]. - The company was incorporated in the British Virgin Islands on December 4, 2018, and operates through Wunong Technology (Shenzhen) Co., Ltd., which focuses on providing clean food to customers in China[184]. - Wunong Shenzhen has a registered capital of RMB 5,000,000 (approximately $707,500) and was established on June 16, 2015[184]. - The company has entered into various contractual agreements to maintain effective control over Wunong Shenzhen, ensuring it receives substantially all economic benefits[184]. Financial Performance - Total revenue for the fiscal year ended December 31, 2021, was $12,258,451, with $8,290,771 from online sales, $3,854,760 from offline sales, and $100,945 from restaurants[102]. - Net revenue decreased by $9.8 million, or 45%, from $22.1 million for the year ended December 31, 2020, to $12.3 million for the year ended December 31, 2021[197]. - The decrease in revenue was primarily due to the impact of COVID-19 and limited transportation, which caused insufficient supply of food products[197]. - The company reported a comprehensive loss of $715,313 for 2021, compared to a loss of $2,423,847 in 2020[198]. - The net loss attributable to the owners' company for 2021 was $1,081,946, a 51% improvement from a loss of $2,218,062 in 2020[198]. Acquisitions and Investments - The company acquired 100% of Wunong Technology (Liaoning) Co., Ltd on January 8, 2021, which has a registered capital of RMB 8.88 million (approximately $1.372 million)[94]. - On March 31, 2022, the company agreed to acquire 100% of Yundian BVI for a total consideration of $8.1 million, to be paid in Ordinary Shares at a price of $0.9 per share[94]. - The company sold 51% equity interests in Baode Supply Chain (Shenzhen) Co., Ltd for RMB 200,000 (approximately $31,405) on December 28, 2021[94]. - A Share Purchase Agreement was entered into for the acquisition of Yundian BVI for a total consideration of $8.1 million, to be paid in ordinary shares at a price of $0.9 per share[195]. - The company ceased to hold shares in Baode Supply Chain (Shenzhen) Co., Ltd after selling its 51% equity interest for RMB 200,000 (approximately $31,405) on December 28, 2021[188]. Market and Product Strategy - The company plans to open approximately 168 franchise experience stores by December 31, 2022, with 51 stores already launched across 8 provinces in China[103]. - The company has refined its restaurant model into a "community experience store" to enhance product experience and customer service[119]. - The company does not grow or manufacture food products, sourcing all items from suppliers[102]. - The company aims to provide customers with green, organic, and pollution-free food as part of its mission[184]. - The company launched its first experience store in Yangxian and 50 franchise experience stores across 8 provinces in China, with plans to open about 168 more by December 31, 2022[116]. Customer Engagement and Sales Channels - As of December 31, 2021, the company had over 682,147 registered users on its online sales platform, with approximately 69,730 monthly active users[104]. - The company generates revenue from the sale of food products, including custom pre-sales, and began offline sales in the second half of 2020, primarily selling meat and vegetables to enterprise customers[106]. - The experience store model allows customers to experience food products personally and order through the online platform, aiming to establish an offline supply chain system[116]. - The company has launched a sales platform on WeChat, facilitating easy shopping and sharing among customers, which is expected to expand the customer base[134]. - The company recognizes social media as a key driver for growth, directly linking increased sales to new customer acquisition through social media promotions[136]. Regulatory and Compliance - The company has adopted policies to comply with cybersecurity laws and protect customer data, with oversight from the board of directors[121]. - The Food Business License system requires all enterprises engaging in food production and operation in China to obtain a license, valid for five years[160]. - The PRC Cyber Security Law mandates that personal information and important data collected by critical information infrastructure operators must be stored in China[176]. - The company requires suppliers to provide various licenses and qualifications, which are verified against PRC government websites to ensure compliance with national standards[116]. - The company is subject to PRC regulations that restrict the payment of dividends from its subsidiaries, which may impact future dividend distributions[269]. Corporate Governance - The company has established three board committees: an audit committee, a compensation committee, and a nominating and corporate governance committee[245]. - The board of directors consists of five members, with directors re-elected at the annual general meeting of shareholders[240]. - The company has adopted a Code of Business Conduct and Ethics applicable to key executive officers, available on its corporate website[246]. - The company has not established a formal policy for determining executive compensation, relying instead on independent evaluations by the board[240]. - The Chief Executive Officer, Xinliang Zhang, has an annual base salary of $300,000, while the Chief Financial Officer, Junjun Li, has an annual base salary of $1,000[242][243]. Shareholder Information - The company is authorized to issue an unlimited number of Ordinary Shares, with 32,968,755 Ordinary Shares issued and outstanding as of the date of the annual report[259]. - Major shareholders include CEDE & CO with 5,999,910 shares (18.20%), Union International Company Limited with 5,100,051 shares (15.47%), and Kindness Global Company Limited with 4,350,043 shares (13.19%)[260]. - The ordinary shares began trading on the NASDAQ Capital Market on December 15, 2020, under the symbol "WNW"[270]. - The company has never declared a dividend and does not anticipate doing so in the foreseeable future[268]. - Shareholders holding 30% or more of voting rights can request a meeting of shareholders[279].

Financial Performance - Total net revenues for 2020 reached $22,125,320, a significant increase of 187.5% compared to $7,682,583 in 2019[13] - Gross profit for 2020 was $4,157,727, representing a gross margin of approximately 18.8%[13] - The net loss for 2020 was $(2,218,062), compared to a net loss of $(1,755,042) in 2019, indicating a worsening of approximately 26.4%[13] - Operating expenses surged to $6,395,047 in 2020, up from $3,663,362 in 2019, marking an increase of about 74.7%[13] - The company reported a net loss of $1,755,042 for the year ended December 31, 2020, compared to a net loss of $980,098 in 2019[209] - The company experienced a comprehensive loss of $2.4 million in 2020, compared to a loss of $1.7 million in 2019[201] - The gross profit for the year ended December 31, 2020, was $4,157,727, with a gross margin of 18.8%, down from 24.8% in 2019[206] - The total cost of revenues for 2020 was $17,909,994, resulting in a gross profit margin decrease attributed to an expanded revenue base and a larger portfolio of food products[206] Assets and Liabilities - Total current assets decreased to $36,366,646 in 2020 from $37,462,877 in 2019, indicating a decline of about 2.9%[12] - Total liabilities increased to $20,561,099 in 2020 from $4,892,558 in 2019, reflecting a substantial rise of approximately 319.5%[12] Market and Competition - The company is heavily dependent on middle-income young professionals, facing strong competition in a fragmented market[18] - Economic downturns and tighter credit conditions could lead to consumers opting for cheaper private label products, adversely affecting demand for branded products[23] - The online food retail market in China is expected to grow significantly, with less than 5% market share currently, indicating substantial growth potential[148] Growth Strategies - Future growth strategies include expanding sourcing and marketing operations, which may strain management and operational systems[20] - The company plans to pursue growth through strategic acquisitions, although success is not guaranteed[21] - The company plans to open 120 franchise restaurants in 2021 and another 120 in 2022, with the first restaurant launched in Shenzhen and 49 cooperative restaurants established[104] Risks and Challenges - Economic conditions, including the impact of the COVID-19 pandemic, pose significant risks to demand and overall business operations[16] - The company faces risks related to cybersecurity, including potential breaches that could harm reputation and lead to significant legal and financial liabilities[28] - Disruptions in the supply network due to extreme weather or natural disasters could materially affect the availability of raw materials and overall business operations[30] - Labor disputes and work stoppages at suppliers' manufacturing sites could impact the company's ability to supply customers and adversely affect financial results[29] - The inability to pass on price increases for food products to customers may adversely affect profit margins and overall financial performance[27] Supply Chain and Operations - The company is dependent on third-party suppliers for food products, and any adverse changes in supply or costs may negatively impact operations and financial results[23] - The company does not have long-term contracts with suppliers, allowing them to reduce order quantities or cease sales at any time, which could negatively impact revenues[30] - The company relies on third-party providers for transportation and logistics, which could impact service delivery and operational results[37] Regulatory and Compliance - The company faces uncertainties regarding compliance with PRC laws and regulations, which could lead to severe penalties or operational restrictions[50] - The PRC government exercises significant control over economic growth, which may negatively impact the company's financial condition and results of operations[59] - The evolving legal system in China presents uncertainties that could limit legal protections available to the company[60] Shareholder and Capital Structure - Significant shareholders control a majority of the company's Ordinary Shares, influencing corporate decisions that may not align with minority shareholders' interests[42] - The company plans to raise capital through further share issuances, which may dilute shareholders' interests and negatively affect share value if revenues and earnings do not grow correspondingly[23] - Future financing needs may lead to dilution of existing shareholders' ownership or impose operational restrictions[83] Marketing and Customer Engagement - The company has refined its restaurant model into a "community experience store" to enhance product experience and customer service[104] - The company has launched a sales platform on WeChat, enhancing customer engagement and facilitating easy product recommendations[141] - The pre-ordering service has gained popularity, allowing customers to oversee the growth stages of food products via real-time cameras, enhancing customer engagement[140] Product and Service Offerings - The product portfolio includes 14.3% Organic Food (130 products), 4.18% Green Food (38 products), 5.28% Agri GI Products (48 products), and 76.24% other food products (693 products)[104] - The company does not grow or manufacture food products but sources them from suppliers, ensuring they are safe and non-genetically modified[103] - The company has diversified its revenue streams by generating income from offline sales and operating 24 restaurants[107] Employee and Management - The management team has extensive experience, with most members having over 10 years in marketing and management, ensuring effective supplier and customer relations[139] - The company is implementing a market-oriented employee compensation structure to attract and retain talented professionals, crucial for maintaining competitive advantage[141] Intellectual Property - The company has 63 registered trademarks and 29 registered computer software copyrights in China to protect its intellectual property[123] - The company’s ability to protect its intellectual property rights is challenged by rapid technological changes and potential unauthorized use by competitors[46] Economic and Market Trends - The e-grocery sector in China experienced a compound annual growth rate of 53% from 2012 to 2016, indicating significant market potential[139] - Mobile-payment transactions in China are projected to surge to about 1,270 trillion yuan by 2027, supporting e-commerce growth[149]