Wing Yip Food Holdings Group Limited American Depositary Shares (WYHG) F-1Registration statement (foreign)

As filed with the U.S. Securities and Exchange Commission on March 6, 2024. 

Registration No. 333-[•]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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Wing Yip Food Holdings Group Limited
(Exact name of registrant as specified in its charter)

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No.9, Guanxian North Rd,
Huangpu Town, Zhongshan City,
Guangdong, China 528429
86-760-23215457
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, NY 10168

(212) 947-7200
(Name, address, including zip code, and telephone number, including area code, of agent for service)

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Approximate date of commencement of proposed sale to the public: Promptly after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933

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 7(a)(2)(B) of the Securities Act ☐

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

modified or new laws and regulations will have on the daily business operations of our subsidiaries, our ability to accept foreign investments, and our listing on an U.S. exchange. The Standing Committee of the National People’s Congress (the “SCNPC”) or regulatory authorities of mainland China may in the future promulgate new laws, regulations, or implementing new rules that require us, or our subsidiaries to obtain regulatory approval from authorities of mainland China before listing in the U.S., apart from the filing with the CSRC per the requirements of the Trial Administrative Measures. If we do not receive or maintain the approval, or inadvertently conclude that such approval is not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, apart from the filing with the CSRC per the requirements of the Trial Administrative Measures, we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations and the value of the ADSs, limit our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value.

In addition, the ADSs may be delisted from a national exchange or prohibited from being traded over-the-counter under the Holding Foreign Companies Accountable Act if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditors for two consecutive years. Our auditor, Audit Alliance LLP, headquartered in Singapore, is an independent registered public accounting firm with the PCAOB and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S., pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. As of the date of this prospectus, the PCAOB has not yet issued an inspection report for Audit Alliance LLP. The PCAOB currently has access to inspect the working papers of our auditor and it is not subject to the determinations announced by the PCAOB on December 16, 2021, which determinations were vacated on December 15, 2022. If trading in the ADSs is prohibited under the Holding Foreign Companies Accountable Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist the ADSs. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and reduced the period of time for foreign companies to comply with PCAOB audits to two consecutive years, instead of three, thus reducing the time period before our securities may be prohibited from trading or delisted. On August 26, 2022, the PCAOB signed a Statement of Protocol (the “SOP”) Agreement with the CSRC and Ministry of Finance of the People’s Republic of China (the “PRC” or “China”). The SOP, together with two protocol agreements governing inspections and investigations (together, the “SOP Agreements”), establishes a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control. The PCAOB is continuing to demand complete access in mainland China and Hong Kong moving forward. Should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. Our securities may be delisted or prohibited from trading if the PCAOB determines that it cannot inspect or investigate completely our auditor under the Holding Foreign Companies Accountable Act. See “Risk Factors — Risks Relating to Doing Business in mainland China — Recent joint statement by the SEC and the PCAOB proposed rule changes submitted by Nasdaq, and the recently enacted Consolidated Appropriations Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.”

We are an “emerging growth company” as defined under the federal securities laws and will be subject to reduced public company reporting requirements. Please read the disclosures beginning on page 10 of this prospectus for more information.

Our Ordinary Shares have been listed on KOSDAQ since 2018, and Wing Yip distributed dividends to its shareholders or investors for each fiscal year between 2019 and 2021. For the fiscal year ended December 31, 2022 and the six months ended June 30, 2023, we have not received any dividends or distributions from our subsidiaries, nor have we paid any dividends or distributions to our shareholders or U.S. investors. We might pay certain amount of cash dividends in the foreseeable future, depending on our financial performance for a specific fiscal year. If we determine

to pay dividends on any of our Ordinary Shares in the future, as a holding company with no material operations of our own, we will be dependent upon the receipt of funds mainly from our PRC operating subsidiary, Wing Yip GD. Regulations in Mainland China currently permit payment of dividends of a mainland China company only out of accumulated distributable after-tax profits as determined in accordance with its articles of association and the accounting standards and regulations in mainland China. In addition, dividends distributed from our PRC subsidiaries to us are subject to mainland China taxes, such as withholding tax. Wing Yip is permitted under the laws of Hong Kong to provide funding to the operating subsidiaries through loans or capital contributions as our board of directors may determine from time to time. There were no cash transfers and transfers of other assets between our holding company and our subsidiaries during the fiscal year ended December 31, 2022 and the six months ended June 30, 2023. See “Prospectus Summary — Transfers of Cash to and from Our Subsidiaries.”

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(1)      The Company has agreed to pay the underwriter a fee equal to seven percent (7.0%) of the gross proceeds of the offering. See “Underwriting” in this prospectus for more information regarding our arrangements with the underwriters.

(2)      In addition to the underwriting discounts listed above, we have agreed to: (i) reimburse the underwriters for certain expenses; (ii) provide a non-accountable expense allowance equal to one percent (1.0%) of the gross proceeds of this offering payable to the Representative; and (iii) issue, upon closing of this offering, warrants to the Representative, exercisable during the five year period after the date of commencement of sales of ADSs in this offering, entitling the Representative to purchase 5.0% of the total number of ADSs sold in this offering (including any ADSs sold as a result of the exercise of the Representative’s over-allotment option) at a per ADS price equal to 100% of the initial public offering price (the “Representative’s Warrants”). The registration statement of which this prospectus is a part also covers the Representative’s Warrants, the ADSs issuable upon the exercise thereof and the underlying Ordinary Shares. See “Underwriting” for additional information regarding total underwriter compensation.

This offering is being conducted on a firm commitment basis. The underwriters are obligated to take and pay for all of the ADSs if any such ADSs are taken. We have granted the underwriters an option for a period of 45 days after the closing of this offering to purchase up to 15% of the total number of the ADSs to be offered by us pursuant to this offering (excluding ADSs subject to this option), solely for the purpose of covering over-allotments, at the public offering price less the underwriting discounts. If the underwriters exercise the option in full, the total underwriting discounts payable will be US$[•] based on an assumed offering price of US$[•] per ADS, and the total gross proceeds to us, before underwriting discounts and expenses, will be US$[•].

The underwriters expect to deliver the ADSs against payment as set forth under “Underwriting,” on or about [•], 2024.

Neither the United States Securities and Exchange Commission (the “SEC”) nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

EF Hutton LLC

Prospectus dated [•], 2024.

TABLE OF CONTENTS

About this Prospectus

We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the Ordinary Shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. For the avoidance of doubt, no offer or invitation to subscribe for Ordinary Shares is made to the public in Hong Kong. The information contained in this prospectus is current only as of the date on the front cover of the prospectus. Our business, financial condition, results of operations, and prospects may have changed since that date.

This prospectus includes statistical and other industry and market data that the Company obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.

Conventions that Apply to this Prospectus

Unless otherwise indicated or the context requires otherwise, references in this prospectus to:

•        “ADRs” are to the American depositary receipts that may evidence the ADSs (defined below);

•        “ADSs” are to the American depositary shares, each of which represents [•] Ordinary Shares (defined below);

•        “China” or the “PRC” are to the People’s Republic of China;

•        “mainland China” are to the geographic areas of the PRC, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region, and Taiwan;

•        “HK$” or “HKD” are to the legal currency of Hong Kong;

•        “PRC subsidiaries” or “our operating subsidiaries” are to our subsidiaries formed in mainland China, including Wing Yip GD and Wing Yip HN;

•        “shares,” “Shares,” or “Ordinary Shares” are to the ordinary shares of Wing Yip, with no par value;

•        “U.S. dollars,” “USD,” and “US$,” are to the legal currency of the United States;

•        “we,” “us,” “our,” “Wing Yip”, or the “Company”, are to Wing Yip Food Holdings Group Limited, previously known as Wing Yip Food (China) Holdings Group Limited, a company with limited liability incorporated in Hong Kong;

•        “Wing Yip GD” are to Guangdong Wing Yip Food Co., Ltd., previously known as Zhongshan Wing Yip Food Co., Ltd., a wholly foreign owned entity with limited liability organized in mainland China; and

•        “Wing Yip HN” are to Hainan Wing Yip Food Technology Co., Ltd., a company with limited liability organized in the mainland China.

Our business is conducted by our operating subsidiaries in mainland China using Renminbi (“RMB”). Our consolidated financial statements are presented in U.S. dollars. In this prospectus, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in U.S. dollars. These dollar references are based on the exchange rate of RMB to U.S. dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may result in an increase or decrease in the amount of our obligations (expressed in dollars) and the value of our assets, including accounts receivable (expressed in dollars). With respect to amounts not recorded in our consolidated financial statements included elsewhere in this prospectus, the conversion of RMB to U.S. dollars is based on 7.2513.

Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option.

RISK FACTORS

An investment in the ADSs involves a high degree of risk. Before deciding whether to invest in the ADSs, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of the ADSs to decline, resulting in a loss of all or part of your investment. The risks described below and discussed in other parts of this prospectus are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in the ADSs if you can bear the risk of loss of your entire investment.

Risks Relating to Doing Business in Mainland China

Recent joint statement by the SEC and the PCAOB proposed rule changes submitted by Nasdaq, and the recently enacted Consolidated Appropriations Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or that have substantial operations in emerging markets, including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply a minimum offering size requirement for companies primarily operating in a “Restrictive Market,” (ii) adopt a new requirement relating to the qualification of management or the board of directors for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditor.

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.

On March 24, 2021, the SEC announced the adoption of interim final amendments to implement the submission and disclosure requirements of the Holding Foreign Companies Accountable Act. In the announcement, the SEC clarifies that before any issuer will have to comply with the interim final amendments, the SEC must implement a process for identifying covered issuers. The announcement also states that the SEC staff is actively assessing how best to implement the other requirements of the Holding Foreign Companies Accountable Act, including the identification process and the trading prohibition requirements.

On September 22, 2021, the PCAOB adopted a final rule implementing the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining, as contemplated under the Holding Foreign Companies Accountable Act, whether the board of directors of a company is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the Holding Foreign Companies Accountable Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years, instead of three.

Our auditor, Audit Alliance LLP, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor is headquartered in Singapore, and is currently subject to inspection by the PCAOB on a regular basis. As of the date of this prospectus, the PCAOB has not yet issued an inspection report for Audit Alliance LLP. On August 26, 2022, the PCAOB signed SOP Agreements with the CSRC and the Ministry of Finance of the PRC. The SOP Agreements established a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous 2021 determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control. The PCAOB is continuing to demand complete access in mainland China and Hong Kong moving forward. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the Holding Foreign Companies Accountable Act if needed. If the PCAOB in the future again determines that it is unable to inspect and investigate completely auditors in mainland China and Hong Kong, then the companies audited by those auditors would be subject to a trading prohibition on U.S. markets pursuant to the Holding Foreign Companies Accountable Act and the Consolidated Appropriations Act. However, the recent developments would add uncertainties to our offering and we cannot assure you whether the national securities exchange we apply to for listing or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience as it relates to our audit. Furthermore, the Accelerating Holding Foreign Companies Accountable Act, which requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years, may result in the delisting of our Company in the future if the PCAOB is unable to inspect our accounting firm at such future time.

The regulatory authorities of mainland China exert substantial influence over the manner in which we must conduct our business, and may intervene or influence our operations at any time within their scope of authorities as prescribed by law, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our ADSs to significantly decline or be worthless.

The regulatory authorities of mainland China have exercised, and continue to exercise, substantial influence over the economy of mainland China through regulation and may intervene with or control, within their scope of authorities as prescribed by law, our operations to further regulatory, political and societal goals. The regulatory authorities of mainland China have recently published new policies that significantly affected certain industries, such as the cryptocurrency industry and the education industry. As of the date of this prospectus, we have not been affected by any newly published policies concerning our industry or our business operations that have limited or may limit our business operations to a significant degree, however, to the extent that the regulatory authorities of mainland China publish any policies in the future that concern and affect the food industry that our subsidiaries operate in, the ability of our PRC subsidiaries to continue operating their business or serving their customers in mainland China may be severely restricted. We cannot assure you that government authorities in mainland China will not introduce any enhanced regulation over the industry our PRC subsidiaries operate in that may lead to our inability to operate in mainland China at all. Additionally, our PRC subsidiaries’ ability to operate in mainland China may also be harmed by changes in laws and regulations, including those relating to taxation, environmental regulation, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision to strengthen overall regulation over the food industry, could have a significant effect on the industry in which our PRC subsidiaries operate. In any of these events, our PRC subsidiaries’ ability to continue their operations may

be significantly impacted, and the value of our ADSs may significantly decline or become worthless. Furthermore, the regulatory authorities of mainland China have indicated an intent to exert more regulatory oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. If we are subject to these actions because of our noncompliance with the applicable laws or rules, our ability to offer or continue to offer securities to investors could be significantly limited or completely hindered, and the value of our ADSs could be significantly declined or be worthless.

U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of the operations of our operating subsidiaries in mainland China.

The SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in mainland China. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation in mainland China. Mainland China has recently adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides, among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of mainland China. Further, the Trial Administrative Measures provide that overseas securities regulatory authorities may conduct investigations or evidence collection relating to mainland China companies’ overseas offering and listing activities through the assistance of the CSRC under relevant cross-border securities regulatory cooperation mechanisms. Accordingly, without regulatory cooperation between the U.S. and China, no entity or individual in mainland China may provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery conducted by overseas regulators, which could present significant legal and other obstacles to obtaining information needed for investigations and litigation conducted outside of mainland China.

Changes, application and interpretation with respect to the applicable legal laws/regulations, and economic policies for our PRC subsidiaries, could result in a material change in our operations and/or the value of the securities we are registering for sale.

The legal system of mainland China is based on written statutes and their legal interpretations by the SCNPC. Previous court decisions may be cited for reference but have limited precedential value. Since 1979, the regulatory authority of mainland China has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, as these laws and regulations are relatively new, and due to the non-binding nature of the court decisions, as mainland China is not a common law country, the interpretation and application of these laws and regulations are subject to change, which could result in a material change in our operations and/or the value of our ADRs.

While the economy of mainland China has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. Any changes in economic conditions in mainland China, in the policies of the regulatory authority, or in the laws and regulations in mainland China could have a material adverse effect on the overall economic growth of mainland China. Such developments could adversely affect our business and operating results, reduce demand for our products, and weaken our competitive position. The regulatory authority of mainland China has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall economy of mainland China, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government supervision over capital investments or changes in tax regulations. In addition, in the past the regulatory authority of mainland China has implemented certain measures, including interest rate adjustments, to adjust the pace of economic growth. These measures may affect economic activities in mainland China, which impact our business and operating results.

Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.

On November 14, 2021, the CAC published the Data Security Administration Draft, which provides that data processing operators engaging in data processing activities that affect or may affect national security must be subject to network data security review by the CAC. According to the Data Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data that affects or may affect national security

must be subject to network data security review by the CAC. The deadline for public comments on the Data Security Administration Draft was December 13, 2021. As of the date of this prospectus, the Data Security Administration Draft has not been enacted.

On December 28, 2021, the CAC and other relevant regulatory authority jointly promulgated the Cybersecurity Review Measures, which took effect on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to critical information infrastructure operators (“CIIOs”) that intend to purchase Internet products and services, net platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.

As of the date of this prospectus, neither we nor our operating subsidiaries have been involved in any investigations on cybersecurity review initiated by any regulatory authority, nor has any of them received any inquiry, notice, or sanction. If the Data Security Administration Draft is enacted as proposed in the future, we believe that our operations and listing will not be affected by both the Cybersecurity Review Measures or the Data Security Administration Draft, and that we will not be subject to cybersecurity review by the CAC for this offering, given that: (i) as a company that mainly manufactures and sells processed meat and protein products, our operating subsidiaries in mainland China are unlikely to be classified as CIIOs by the regulatory agencies; (ii) while we operate an online shopping platform (shop.wingyip-food.com), our customers are enterprises who are our dealers and we do not have individual customers on our shopping platform; as a result, we possess personal data of far fewer than one million individual clients in our business operations as of the date of this prospectus and do not anticipate that we will be collecting over one million users’ personal information in the near future, which we understand might otherwise subject us to the Cybersecurity Review Measures; and (iii) since we are in the meat processing industry, data processed in our business is unlikely to have a bearing on national security and therefore is unlikely to be classified as core or important data by the authorities. However, the relevant regulatory authorities of mainland China may take a view that is contrary to or otherwise different from the opinion stated above. The enforcement as to how the Cybersecurity Review Measures and the Data Security Administration Draft will be interpreted or implemented will still require further clarification, and whether the regulatory agencies of mainland China, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Data Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect and may have an adverse effect on us, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. We cannot guarantee, however, that we will not be subject to cybersecurity review in the future. During such review, we may be required to suspend our operating subsidiaries’ operation or experience other disruptions to their operations. Cybersecurity review could also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially and adversely affect our business, financial condition, and results of operations.

Due to the differences in the legal systems of different countries, you may find it difficult in effecting service of legal process, enforcing foreign judgments, or bringing actions in mainland China against us or our management named in the prospectus based on foreign laws, compared to doing so in your home country against a domestic company.

As a holding company incorporated under the laws of Hong Kong, we conduct substantially all our operations in mainland China and a majority of our assets are located in mainland China. In addition, all of our officers and directors reside outside the U.S. As a result, it may be time-consuming and costly for you to effect service of process upon those persons outside the U.S. It may be difficult for you to enforce judgments obtained in U.S. courts based on civil liability provisions of the U.S. federal securities laws against us and our officers and directors, as none of them currently resides in the U.S. or has substantial assets in the U.S. In addition, there is uncertainty as to whether the judicial branch outside the U.S. would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the U.S. or any state.

The recognition and enforcement of foreign judgments in mainland China are provided for under the PRC Civil Procedures Law. Courts of mainland China may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between mainland China and the country where the judgment is made or on principles of reciprocity between jurisdictions. Mainland China does not have any treaties or other forms of written arrangement with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, the mainland China courts will not

enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of mainland China laws or national sovereignty, security, or public interest. As a result, it is uncertain whether and on what basis a mainland China court would enforce a judgment rendered by a court in the United States. See “Enforceability of Civil Liabilities.”

Increases in labor costs in mainland China may adversely affect our business and our profitability.

China’s economy has experienced increases in labor costs in recent years. The overall economy and the average wage in mainland China are expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our customers by increasing prices for our products or services, our profitability and results of operations may be materially and adversely affected.

In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the “Labor Contract Law,” that became effective in January 2008 and its amendments that became effective in July 2013 and its implementing rules that became effective in September 2008, employers are subject to stricter requirements for labor protection in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation, and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.

As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related laws and regulations in mainland China, which may subject us to labor disputes or government investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations could be materially and adversely affected.

Our operating subsidiaries in mainland China have not made adequate social insurance and housing provident fund contributions for all employees as required by the mainland China regulations, which may subject us to penalties.

According to the PRC Social Insurance Law and the Administrative Regulations on the Housing Funds, companies operating in mainland China are required to participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance, maternity insurance (collectively known as “social insurance”), and housing provident funds plans, and the employers must pay all or a portion of the social insurance premiums and housing provident funds for their employees. For more details, see “Regulations — Laws and Regulations on Labor and Work Safety — Regulations on Social Insurance and Housing Provident Fund.” The requirement of social insurance and housing provident fund has not been implemented consistently by the local governments in mainland China given the different levels of economic development in different locations. As of the date of this prospectus, our operating subsidiaries in mainland China have not made adequate social insurance and housing provident fund contributions for all employees. Our operating subsidiaries in mainland China may be required to make up the social insurance contributions as well as to pay late fees at the rate of 0.05% per day of the outstanding amount from the due date. If they fail to make up for the shortfalls within the prescribed time limit, the relevant administrative authorities will impose a fine of one to three times the outstanding amount upon our PRC subsidiaries. With respect to housing provident fund plans, our operating subsidiaries in mainland China may be required to pay and deposit housing provident funds in full and on time within the prescribed time limit. If our operating subsidiaries in mainland China fail to do so, relevant authorities could file applications to competent courts for compulsory enforcement of payment and deposit. As of the date of this prospectus, our operating subsidiaries in mainland China have not received any notice from local authorities or any claim or request from the employees in this regard. However, if the relevant mainland China authorities determine that our operating subsidiaries in mainland China shall make supplemental social insurance and housing fund contributions or that our operating subsidiaries in mainland China are subject to fines and legal sanctions in relation to their failure to make social insurance and housing fund contributions in full for their employees, their business, financial condition, and results of operations may be adversely affected.

Failure to adapt to changes in laws and regulations governing the meat processing industry on a timely basis may result in fines, create limitations or uncertainties with respect to our operating subsidiaries’ business activities, make it difficult for them to obtain or maintain the necessary approvals, permits or licenses or render their operations non-compliant, any of which could materially and adversely affect our operating subsidiaries’ business.

The meat processing industry is a fragmented and evolving industry in mainland China, and the laws and regulations governing the industry are still developing. There are substantial uncertainties as to the legal system and the interpretation and implementation of the laws and regulations of mainland China applicable to the industry.

Any significant changes to the laws, regulations and government policies governing the meat processing industry could impose substantial costs on us, create limitations or uncertainties regarding the way our operating subsidiaries conduct or expand their business, or affect our rights or obligations under our existing agreements with investors, target companies or other parties as well as the extent to which we can engage in, or charge fees for our business.

We will continue to monitor any new rules in this area to ensure that we remain in compliance with relevant laws and regulations. Any failure to adapt to and other changes in applicable laws, regulations and other government policies on a timely basis may result in fines, restrictions on our operating subsidiaries’ business activities or revocations of approvals, permits or licenses, or render our operating subsidiaries’ operations to be non-compliant, any of which would have a material adverse effect on our business, financial condition and results of operations.

Regulations in mainland China relating to offshore investment activities by mainland China residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or otherwise expose us or our shareholders who are mainland China residents to liabilities or penalties.

On July 4, 2014, SAFE issued the Circular on Issues Concerning Foreign Exchange Control over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or “SAFE Circular 37.” According to SAFE Circular 37, prior registration with the local SAFE branch is required for PRC residents (including mainland China individuals and mainland China corporate entities as well as foreign individuals that are deemed to be mainland China residents for foreign exchange administration purpose), in connection with their direct or indirect contribution of domestic assets or interests to offshore special purpose vehicles, or “SPVs.” SAFE Circular 37 further requires amendments to the SAFE registrations in the event of any changes with respect to the basic information of the offshore SPV, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the offshore SPV, such as an increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders who are mainland China residents and may be applicable to any offshore acquisitions that we make in the future. In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or “SAFE Notice 13,” effective in June 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

In addition to SAFE Circular 37 and SAFE Notice 13, our ability to conduct foreign exchange activities in mainland China may be subject to the interpretation and enforcement of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January 2007 (as amended and supplemented, the “Individual Foreign Exchange Rules”). Under the Individual Foreign Exchange Rules, any mainland China individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions, the failure of which may subject such mainland China individual to warnings, fines, or other liabilities.

As of the date of this prospectus, our majority shareholder and shareholders who are directors and/or executives of our Company and known to us as mainland China residents have completed the registrations under the SAFE Circular 37 and SAFE Notice 13. However, we may not be informed of the identities of all the mainland China residents holding direct or indirect interest in our Company, and we have no control over any of our future beneficial owners. Thus, we cannot provide any assurance that our current or future beneficial owners who are mainland China resident will comply with our request to make or obtain any applicable registrations or continuously comply with all registration procedures set forth in these SAFE regulations. Such failure or inability of our mainland China residents beneficial owners to comply with these SAFE regulations may subject us or our mainland China resident beneficial owners

to fines and legal sanctions, restrict our cross-border investment activities, or limit our PRC subsidiaries’ ability to distribute dividends to or obtain foreign-exchange-dominated loans from us, or prevent us from being able to make distributions or pay dividends, as a result of which our business operations and our ability to distribute profits to you could be materially and adversely affected.

Mainland China regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC subsidiaries may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Any funds we transfer to our operating subsidiaries in mainland China, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in mainland China. According to the relevant regulations on foreign-invested enterprises, or “FIEs,” in mainland China, trans-border shareholder loans to our PRC subsidiary, Wing Yip GD, which is a FIE, are subject to registration with SAFE or its local branches in advance. There is, in effect, no statutory limit on the amount of capital contributions that we can make to our operating subsidiaries in mainland China, and we are allowed to make capital contributions to our operating subsidiaries in mainland China by subscribing to their initial registered capital and increased registered capital, provided that the operating subsidiaries in mainland China complete the relevant filing and registration procedures.

On the other hand, any foreign loan provided by us to our operating subsidiaries in mainland China is required to be registered with SAFE or its local branches or filed with SAFE in its information system, and our operating subsidiaries in mainland China may not procure foreign loans which exceed the difference between its total investment amount and registered capital (the “Current Foreign Debt Mechanism”) or, as an alternative, only procure loans subject to the calculation approach and limitations as provided in the Circular on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing of the People’s Bank of China (“PBOC”), or “PBOC Notice No. 9” (the “PBOC Notice No. 9 Mechanism”), which shall not exceed 200% of the net asset of the relevant PRC subsidiaries. According to PBOC Notice No. 9, after a transition period of one year since its promulgation, PBOC and SAFE will determine the cross-border financing administration mechanism for the FIEs after evaluating the overall implementation of PBOC Notice No. 9. As of the date of this prospectus, neither PBOC nor SAFE has promulgated and made public any material changes to PBOC Notice No. 9. It is uncertain which mechanism will be adopted by PBOC and SAFE in the future and what statutory limits will be imposed on us when providing loans to our operating subsidiaries in mainland China. Currently, our operating subsidiaries in mainland China have the flexibility to choose between the Current Foreign Debt Mechanism and the PBOC Notice No. 9 Mechanism. However, if a more stringent foreign debt mechanism becomes mandatory, our ability to provide loans to our operating subsidiaries in mainland China may be significantly limited, which may adversely affect our business, financial condition, and results of operations.

If we seek to make capital contributions to our operating subsidiaries in mainland China or provide any loan to our operating subsidiaries in mainland China in the future, we may not be able to obtain the required government approvals or complete the required registrations on a timely basis, if at all. If we fail to receive such approvals or complete such registrations, our ability to use the proceeds of this offering and to capitalize our operating subsidiaries in mainland China may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.

On March 30, 2015, SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or “SAFE Circular 19,” effective as of June 1, 2015, as amended by Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement under the Capital Account, or “SAFE Circular 16,” effective on June 9, 2016. SAFE Circular 19 and SAFE Circular 16 allow FIEs to settle their foreign exchange capital at their discretion, but prohibit FIEs from using the RMB fund converted from their foreign exchange capitals for (i) expenditures beyond the enterprise’s business scope or expenditures prohibited by laws and regulations; (ii) investments in securities or other investments than principal-secured products issued by banks; (iii) granting loans to non-affiliated enterprises, except where it is expressly permitted in the business license providing entrusted loans, or repaying loans between non-financial enterprises; and (iv) construction or purchase of real estate for purposes other than self-use (except for real estate enterprises). On October 23, 2019, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-Border Trade and Investment, or “SAFE Circular 28,” which removes the restrictions on domestic equity investments by non-investment foreign-invested enterprises with their capital funds, provided that certain conditions are met. The use of such RMB capital may not be altered without SAFE’s approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such loans have not been used.

As a result, we are required to apply RMB funds converted from the net proceeds we received from this offering within the business scopes of our PRC subsidiaries. Violations of these Circulars could result in severe monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 could potentially limit our ability to use RMB converted from the net proceeds of this offering to fund the establishment of new entities in mainland China by our operating subsidiaries in mainland China or to invest in or acquire any other mainland China companies through our operating subsidiaries in mainland China, which may adversely affect our business, financial condition, and results of operations.

Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.

The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in economic conditions in mainland China and by mainland China’s foreign exchange policies. On July 21, 2005, the mainland China regulatory authority changed its decade-old policy of pegging the value of the RMB to the U.S. dollar, and the RMB appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the U.S. dollar remained within a narrow band. Since June 2010, the RMB has fluctuated against the U.S. dollar, at times significantly and unpredictably. It is difficult to predict how market forces or mainland China or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future.

Our business is conducted in mainland China, and our books and records are maintained in RMB, which is the currency of mainland China. The financial statements that we file with the SEC and provide to our shareholders are presented in U.S. dollars. Changes in the exchange rates between the RMB and U.S. dollar affect the value of our assets and the results of our operations, when presented in U.S. dollars. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue, and financial condition. Further, the ADSs offered by this prospectus are offered in U.S. dollars, we will need to convert the net proceeds we receive into RMB in order to use the funds for our business. Changes in the conversion rate among the U.S. dollar and the RMB will affect the amount of proceeds we will have available for our business.

Very limited hedging options are available in mainland China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into more hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by mainland China exchange administration regulations that affect our ability to convert RMB into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

Under the PRC Enterprise Income Tax Law, we may be classified as a mainland China “resident enterprise” for mainland China enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-Chinese-mainlander shareholders and have a material adverse effect on our results of operations and the value of your investment.

Under the PRC Enterprise Income Tax Law, or the “EIT Law,” that became effective in January 2008, an enterprise established outside mainland China with “de facto management bodies” within mainland China is considered a “resident enterprise” for mainland China enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation rules to the EIT 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 properties of an enterprise. In addition, a circular, known as SAT Circular 82, issued in April 2009 by the State Administration of Taxation, or the “SAT,” specifies that certain offshore incorporated enterprises controlled by mainland China enterprises or mainland China enterprise groups will be classified as mainland China resident enterprises if the following are located or resident in mainland 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. Further to SAT Circular 82, the SAT issued a bulletin, known as SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation of SAT Circular 82 and clarify the reporting and filing obligations of such “Chinese-controlled offshore incorporated resident enterprises.” SAT Bulletin 45 provides procedures and administrative details for the determination of resident status and administration on post-determination matters. Although both SAT Circular 82 and SAT Bulletin 45

only apply to offshore enterprises controlled by mainland China enterprises or mainland China enterprise groups, not those controlled by mainland China individuals or foreign individuals, the determining criteria set forth in SAT Circular 82 and SAT Bulletin 45 may reflect the SAT’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by mainland China enterprises, mainland China enterprise groups, or by mainland China or foreign individuals.

If the mainland China tax authorities determine that the actual management organ of Wing Yip is within the territory of China, Wing Yip may be deemed to be a mainland China resident enterprise for mainland China enterprise income tax purposes and a number of unfavorable mainland China tax consequences could follow. First, we will be subject to the uniform 25% enterprise income tax on our worldwide income, which could materially reduce our net income. In addition, we will also be subject to mainland China enterprise income tax reporting obligations. Finally, dividends payable by us to our investors and gains on the sale of the ADSs may become subject to mainland China withholding tax, at a rate of 10% in the case of non-Chinese-mainlander enterprises or 20% in the case of non-mainland individuals (in each case, subject to the provisions of any applicable tax treaty), if such gains are deemed to be from sources of mainland China. It is unclear whether non-mainland shareholders of our Company would be able to claim the benefits of any tax treaties between their country of tax residence and mainland China in the event that we are treated as a mainland China resident enterprise. Any such tax may reduce the returns on your investment in the ADSs. Although up to the date of this prospectus, Wing Yip has not been notified or informed by the mainland China tax authorities that it has been deemed to be a resident enterprise for the purpose of the EIT Law, we cannot assure you that it will not be deemed to be a resident enterprise in the future.

We face uncertainty with respect to indirect transfers of equity interests in mainland China resident enterprises by their non-Chinese-mainlander holding companies.

In February 2015, SAT issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or “SAT Circular 7.” SAT Circular 7 provides comprehensive guidelines relating to indirect transfers of mainland China taxable assets (including equity interests and real properties of a mainland China resident enterprise) by a non-resident enterprise. In addition, in October 2017, SAT issued an Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or “SAT Circular 37,” effective in December 2017, which, among others, amended certain provisions in SAT Circular 7 and further clarify the tax payable declaration obligation by non-resident enterprise. The indirect transfer of an equity interest and/or real properties in a mainland China resident enterprise by an overseas holding company will be deemed a direct transfer of mainland China taxable assets and subject to enterprise income taxes, unless such transactions are for a reasonable commercial purpose.

SAT Circular 7 provides clear criteria for an assessment of reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. As stipulated in SAT Circular 7, indirect transfers of mainland China taxable assets are considered as reasonable commercial purposes if the shareholding structure of both transaction parties falls within the following situations: i) the transferor directly or indirectly owns 80% or above equity interest of the transferee, or vice versa; ii) the transferor and the transferee are both 80% or above directly or indirectly owned by the same party; iii) the percentage in bullet point i) and ii) shall be 100% if over 50% the share value of a foreign enterprise is directly or indirectly derived from real properties in mainland China. Furthermore, SAT Circular 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets. Where a non-resident enterprise transfers mainland China taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an indirect transfer, the non-resident enterprise as either transferor or transferee, or the mainland China entity that directly owns the taxable assets, may report such indirect transfer to the relevant tax authority and the mainland China tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding, or deferring mainland China tax. As a result, gains derived from such indirect transfer may be subject to mainland China enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a mainland China resident enterprise.

According to SAT Circular 37, where the non-resident enterprise fails to declare the tax payable pursuant to Article 39 of the EIT Law, the tax authority may order it to pay the tax due within required time limits, and the non-resident enterprise shall declare and pay the tax payable within such time limits specified by the tax authority. If the non-resident enterprise, however, voluntarily declares and pays the tax payable before the tax authority orders it to do so within required time limits, it shall be deemed that such enterprise has paid the tax in time.

We face uncertainties as to the reporting and assessment of reasonable commercial purposes and future transactions where mainland China taxable assets are involved, such as offshore restructuring and investments. In the event of being assessed as having no reasonable commercial purposes in an indirect transfer transaction, we may be subject to filing obligations or taxed if we are a transferor in such transactions, and may be subject to withholding obligations (to be specific, a 10% withholding tax for the transfer of equity interests) if we are a transferee in such transactions, under SAT Circular 7 and SAT Circular 37. For transfer of shares by investors who are non-mainland resident enterprises, our operating subsidiaries in China may be requested to assist in the filing under the SAT circulars. As a result, we may be required to expend valuable resources to comply with the SAT circulars or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that we should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

Our PRC subsidiaries are subject to certain limitations and restrictions on paying dividends or making other payments to us, which may have a material adverse effect on our ability to conduct our business.

We are a holding company incorporated in Hong Kong. We may need dividends and other distributions on equity from our operating subsidiaries in mainland China to satisfy our liquidity requirements. Current mainland China regulations permit our operating subsidiaries in mainland China to pay dividends to us only out of its accumulated profits, if any, determined in accordance with mainland China accounting standards and regulations. In addition, our operating subsidiaries in mainland China are required to set aside at least 10% of its respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. Our operating subsidiaries in mainland China may also allocate a portion of their respective after-tax profits based on mainland China accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends. These limitations on the ability of our operating subsidiaries in mainland China to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments, or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

In response to the persistent capital outflow and Renminbi’s depreciation against U.S. dollar in the fourth quarter of 2016, the PBOC and SAFE implemented a series of capital administration measures, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. For instance, PBOC issued the Circular on Further Clarification of Relevant Matters Relating to Offshore RMB Loans Provided by Domestic Enterprises, or “PBOC Circular 306,” on November 26, 2016, which provides that offshore RMB loans provided by a domestic enterprise to offshore enterprises with which it has an equity relationship shall not exceed 30% of the domestic enterprise’s most recent audited owner’s equity. PBOC Circular 306 may constrain our PRC subsidiaries’ ability to provide offshore loans to us. The Circular of the State Administration of Foreign Exchange on Further Advancing Foreign Exchange Administration Reform to Enhance Authenticity and Compliance Reviews, promulgated by SAFE in January 2017, provides for several capital administration measures with respect to outbound remittances of profits from domestic entities to offshore entities, including the following: when a bank handles the remittances of profits of an amount exceeding the equivalent of US$50,000 for a domestic entity, the resolutions of the board of directors on profit distributions, the original tax filing forms and the audited financial statements should be verified in accordance with the principle of genuine transaction, and the domestic entity should hold income to account for previous years’ losses before remittances of profits. In addition, the domestic entity is required to make a detailed description of sources and use arrangements of capital, as well as proof of board resolutions, contracts, etc., when completing the registration procedures in connection with an outbound investment. The mainland China regulatory authority may continue to strengthen its capital administration, and our PRC subsidiaries’ dividends and other distributions may be subjected to tighter scrutiny in the future. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. See also “Under the PRC Enterprise Income Tax Law, we may be classified as a mainland China ‘resident enterprise’ for mainland China enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-mainland shareholders and have a material adverse effect on our results of operations and the value of your investment.”

Limitations and restrictions on currency conversion may affect the value of your investment and our payment of dividends.

The mainland China government regulates and imposes certain restrictions on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of mainland China. We receive substantially all of our revenue in the RMB. Under our current corporate structure, Wing Yip may rely on dividend payments from our

operating subsidiaries in mainland China to fund any cash and financing requirements we may have. Under existing mainland China foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, our operating subsidiaries in mainland China are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of mainland China complies with certain procedures under mainland China foreign exchange regulation, such as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are mainland China residents. Approval from or registration with appropriate government authorities is, however, required where the RMB is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The government may also at its discretion restrict access in the future to foreign currencies for current account transactions, within its scope of authority as prescribed by law. If the foreign exchange administration system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demand, we may not be able to pay dividends in foreign currencies to our shareholders.

There are uncertainties under the EIT Law relating to the withholding tax liabilities of our operating subsidiaries in mainland China, and dividends payable by our operating subsidiaries in mainland China to us may not qualify to enjoy certain treaty benefits.

Under the EIT Law and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside mainland China, will be subject to a withholding tax rate of 10%. Pursuant to the Arrangement between mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the “Double Tax Avoidance Arrangement,” a withholding tax rate of 10% may be lowered to 5% if the mainland China enterprise is at least 25% held by a Hong Kong enterprise for at least 12 consecutive months prior to distribution of the dividends and is determined by the relevant mainland China tax authority to have satisfied other conditions and requirements under the Double Tax Avoidance Arrangement and other applicable mainland China laws.

However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or the “SAT Circular 81,” which became effective on February 20, 2009, if the relevant mainland China tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such mainland China tax authorities may adjust the preferential tax treatment. According to Circular on Several Issues regarding the “Beneficial Owner” in Tax Treaties, which became effective as of April 1, 2018, when determining an applicant’s status as the “beneficial owner” regarding tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors will be taken into account. Such factors include whether the business operated by the applicant constitutes actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax, grant tax exemption on relevant incomes, or levy tax at an extremely low rate. This circular further requires any applicant who intends to be proved of being the “beneficial owner” to file relevant documents with the relevant tax authorities. Wing Yip GD is wholly owned by us, as a Hong Kong holding company. However, we cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant mainland China tax authority or we will be able to complete the necessary filings with the relevant mainland China tax authority and enjoy the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to dividends to be paid by our PRC subsidiaries to us, in which case, we would be subject to the higher withdrawing tax rate of 10% on dividends received.

If we become directly subject to the scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our operating subsidiaries’ business operations, the ADS price, and our reputation.

U.S. public companies that have substantially all of their operations in mainland China have been the subject of intense scrutiny, criticism, and negative publicity by investors, financial commentators, and regulatory agencies, such as the SEC. Much of the scrutiny, criticism, and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism, and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear

what effect this sector-wide scrutiny, criticism, and negative publicity will have on us, our business, and the price of the ADSs. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company. This situation will be costly and time-consuming and distract our management from developing our business. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of the ADSs.

We are required to fulfill the Trial Administrative Measures filing procedures and report relevant information to the CSRC; and, since further interpretation and implementation of the new regulations are still required, we cannot assure you that we will be able to complete the filings for any future offerings, after the completion of this offering, and fully comply with the relevant new rules on a timely basis, if at all.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly and Lawfully Cracking Down Illegal Securities Activities to crack down on illegal activities in the securities market and promote the high-quality development of the capital market (the “Opinions”), which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the securities laws of mainland China.

On December 24, 2021, the CSRC published the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comment) (the “Draft Administrative Provisions”) and the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comment) (the “Draft Filing Measures”). The Draft Administrative Provisions and the Draft Filing Measures lay out requirements for filing and include unified regulation management, strengthening regulatory coordination, and cross-border regulatory cooperation.

On February 17, 2023, the CSRC promulgated the Trial Administrative Measures, which came into force on March 31, 2023. On the same date, the CSRC circulated the Guidance Rules on CSRC’s official website. The Trial Administrative Measures refine the regulatory system by subjecting both direct and indirect overseas offering and listing activities to the CSRC filing-based administration. The Trial Administrative Measures, together with the Guidance Rules reiterate the basic principles of the Draft Administrative Provisions and Draft Filing Measures and impose substantially the same requirements for the overseas securities offering and listing by domestic enterprises, and clarified and emphasized several aspects, which include, but are not limited to: (i) comprehensive determination of the “indirect overseas offering and listing by domestic companies of mainland China” in compliance with the principle of “substance over form” and particularly, an issuer will be required to undertake the filing procedures under the Trial Administrative Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets, as documented in its audited consolidated financial statements for the most recent accounting year, is accounted for by mainland China companies, and b) the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (ii) a negative list of types of issuers banned from listing or offering overseas, such as issuers under investigation for crimes or major violations of the law, or whose overseas offering and listing may endanger national security, or whose controlling shareholders have been recently convicted of bribery and corruption; (iii) issuers’ compliance with foreign investment, network security, data security, and other national security laws, regulations and relevant provisions; (iv) issuers’ filing and reporting obligations, such as the obligation to file with the CSRC after it submits an application for initial public offering to competent overseas regulators, and the obligation to file with the CSRC after it completes subsequent offerings in the same overseas market and to report to the CSRC on material events including change of control or voluntary or mandatory delisting of the issuer; and (v) the CSRC’s authority to fine both issuers and their relevant shareholders for failure to comply with the Trial Administrative Measures, including failure to comply with the filing procedures or filing with materials on false, misleading statements or material omissions. Specifically, pursuant to the Trial Administrative Measures, we are required to file with the CSRC within three business days after submitting the application documents for offering and listing in the U.S., and this offering is contingent upon the completion of the filing with the CSRC. We submitted the filing report and related materials to the CSRC on November 30, 2023, and the CSRC published the notification on our completion of the required filing procedures on February 5, 2024 for this offering. As of the date of this prospectus, we have completed the CSRC filing procedure for this offering in accordance with the Trial Administrative Measures. As the Trial Administrative Measures are newly-issued, there

remains uncertainty regarding their interpretation and implementation. Therefore, we cannot assure you that we will be able to complete the filings for any future offerings, after the completion of this offering, and fully comply with the relevant new rules on a timely basis, if at all.

The M&A Rules and certain other mainland China regulations establish complex procedures for some acquisitions of mainland China companies by foreign investors, which could create certain obstacles for us to pursue growth through acquisitions in mainland China.

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the “M&A Rules,” and recently adopted regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex. For example, the M&A Rules require that the Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor takes control of a mainland China enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or Chinese time-honored brand. Mergers or acquisitions that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to the Ministry of Commerce when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the “Prior Notification Rules,” issued by the State Council in August 2008 is triggered. In addition, the security review rules issued by the Ministry of Commerce that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the Ministry of Commerce, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the Ministry of Commerce or its local counterparts may delay or inhibit our ability to complete such transactions. We do not believe our business would be deemed to be in an industry that raises “national defense and security” or “national security” concerns. The Ministry of Commerce or other government agencies, however, may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in mainland China, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected.

To the extent cash or assets in the business is in mainland China or Hong Kong or an entity incorporated in mainland China or Hong Kong, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong due to the imposition of restrictions and limitations on the ability of us or our subsidiaries by the mainland China regulatory authority within their scope of authority to transfer cash or assets.

The transfer of funds and assets among Wing Yip and its subsidiaries in mainland China is subject to certain limitations and restrictions. The mainland China regulatory authority imposes certain regulations and restrictions on the conversion of RMB into foreign currencies and the remittance of currencies out of mainland China. See “Risk Factors — Limitations and restrictions on currency conversion may affect the value of your investment and our payment of dividends.” In addition, the PRC EIT Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-mainland resident enterprises, unless reduced under treaties or arrangements between the PRC central government and the governments of other countries or regions where the non-mainland resident enterprises are tax residents. See “Risk Factors — Our PRC subsidiaries are subject to certain limitations and restrictions on paying dividends or making other payments to us, which may have a material adverse effect on our ability to conduct our business.”

As of the date of this prospectus, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to mainland China), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future.

As a result of the above, to the extent cash or assets in the business is in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong due to the imposition of restrictions and limitations on the ability of us or our subsidiaries by the mainland China regulatory authority to transfer cash or assets.

We rely on dividends and other distributions on equity paid by our operating subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our operating subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.

We are a holding company, and we rely on dividends and other distributions on equity paid by our operating subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If our operating subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. In addition, the mainland China tax authorities may require our mainland China subsidiaries to adjust their taxable income in a manner that would materially and adversely affect their ability to pay dividends and other distributions to us.

Under laws and regulations of mainland China, our PRC subsidiaries may pay dividends only out of their respective accumulated after-tax profits as determined in accordance with accounting standards and regulations of mainland China. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, after making up for previous year’s accumulated losses, if any, to fund certain statutory common reserves, and may stop setting aside such after-tax profits after the aggregate amount of such funds reaches 50% of its registered capital. And for the purpose of avoiding misunderstanding, this portion of such operating subsidiaries’ respective statutory common reserves are prohibited from being distributed to their shareholders as dividends except in the event of liquidation. If the shareholders’ meeting or the board of directors distributes the profits to the shareholders by violating the above-mentioned provisions before the losses are made up and the statutory common reserves are drawn, the profits distributed shall be refunded to the company.

Risks Relating to Our Business

We are subject to risks related to supply chain disruptions.

Our operating subsidiaries must manage the supply chain for raw materials and the delivery services they rely upon for our products. Any supply chain fragmentation and local protectionism within the PRC may complicate supply chain disruption risks. Local administrative bodies and physical infrastructure built to protect local interests pose transportation challenges for raw material transportation as well as product delivery. In addition, profitability and sales volume could be negatively impacted by limitations inherent within the supply chain, including competitive, governmental, and legal impediments, natural disasters, and other events that could impact both supply and price of our products. As of the date of this prospectus, our operating subsidiaries’ business and operations have not been materially impacted by any supply chain disruptions. However, any of these occurrences could cause significant disruptions to our supply chain, production capability and distribution system that could adversely impact our ability to produce and deliver products, and materially affect our outlook or business goals.

We face increasing competition in our business, which may adversely affect our market share and profitability.

The meat processing industry is highly competitive in mainland China. Competition exists both in the purchase of raw meat and processing techniques and in the sale of processed meat products. We face competition from a number of meat processing companies in mainland China.

The principal competitive factors in the meat processing industry are operating efficiency, availability, quality and cost of raw materials, cost of labor, product price and quality, food safety, product distribution, technological innovations, and brand loyalty. Our ability to be an effective competitor depends on our ability to compete on the basis of these characteristics. In addition, some of our competitors may have greater financial and other resources than us. We may be unable to compete effectively with these companies, and if we are unable to remain competitive with these meat processing companies in the future, our market share and profitability may be adversely affected.

We generally do not enter into long-term contracts with our distributor customers.

We, through the operating subsidiaries, typically do not enter into long-term agreements with our major customers. Instead, we have annual distribution agreements with our distributors. The distribution agreement usually specifies that we deliver the ordered products to the distributor customers at our costs and we usually grant distributors a credit term of one-to three months after products delivery, after which time, payment in full is required. We also set an annual minimum sales target with the distributor customer, based on the distributor’s sales performance in the previous period. We incentivize distributors to achieve progressive sales targets through incentive programs, often in the form of rebates calculated based on sales amounts exceeding the sales targets. See “Business — Distribution — Distributors.” As such, our Group may not experience a continuous and steady source of revenue generated from our business.

There is no guarantee that our distributor customers will continue to give us their orders or that the level of their orders with us will be maintained. If our distributor customers decide to source similar products from other suppliers or reduce their orders with us and we are unable to secure sufficient additional orders to replace these lost and/or replaced orders, our revenue and financial performance will be adversely affected.

Our results of operations may be adversely affected by fluctuations in market prices for raw meat materials.

Our operating margins depend on, among other factors, the purchase price of raw materials, primarily raw meat materials, such as pork, beef, and poultry. These prices may vary significantly during short periods of time, due to raw meat materials supply and demand. The supply and market for raw materials depend on a number of factors that we have little or no control over, including the cost of animal feed ingredients, such as grain, corn, and soybeans, outbreaks of livestock diseases, and economic and weather conditions. Raw materials accounted for 90.93%, 90.17%, and 90.21% of the total cost of products sold during the fiscal years ended December 31, 2021 and 2022, and the six-month period ended June 30, 2023, respectively. Market prices for raw meat materials remain volatile. High prices for raw meat materials may have a material adverse effect on our operating results.

We may be unable to pass on all or part of any increased costs we experience from time to time to consumers of our products directly, in a timely manner, or at all. Additionally, if we do not attract and maintain contracts or business relationships with raw meat materials suppliers on favorable terms, our production operations could be disrupted, adversely affecting us.

Market demand for our products may fluctuate.

Our Group faces competition from producers of alternative meats and protein sources, including pork, beef, chicken, fish, and plant-based proteins. The factors on which the Company competes include:

•        price;

•        product quality and attributes;

•        brand identification;

•        breadth of product line; and

•        customer service.

Demand for our products is also affected by competitors’ promotional spending, the effectiveness of the Group’s advertising and marketing programs, and consumer perceptions. Failure to identify and react to changes in food attitudes and trends, such as concerns regarding sustainability of product sources and animal welfare, could lead to, among other things, reduced demand for the Group’s brands and products. The Company may be unable to compete successfully on any or all of these factors in the future.

Failure to continually innovate and successfully launch new products and maintain our brand image through marketing investment could adversely impact our operating results.

Our financial success is dependent on anticipating changes in consumer preferences, purchasing behaviors and dietary habits and successfully developing and launching new products and product extensions that consumers want in the channels where they shop. We devote significant resources to new product development and product extensions. However, we may not be successful in developing innovative new products or our new products may not be commercially

successful. To the extent we are not able to effectively gauge the direction of our key markets and successfully identify, develop, manufacture and market new or improved products in these changing markets, such as adapting to emerging e-commerce channels, our financial results and our competitive position will suffer. In addition, our introduction of new products or product extensions may generate litigation or other legal proceedings against us by competitors claiming infringement of their intellectual property or other rights, which could negatively impact our results of operations.

We also seek to maintain and extend the image of our brands through marketing investments, including advertising, consumer promotions and trade spend. Due to inherent risks in the marketplace associated with advertising, promotions and new product introductions, including uncertainties about trade and consumer acceptance, our marketing investments may not prove successful in maintaining or increasing our market share and could result in lower sales and profits. Continuing global focus on health and wellness, including weight management, and increasing media attention to the role of food marketing could adversely affect our brand image or lead to stricter regulations and greater scrutiny of food marketing practices.

Our success in maintaining, extending and expanding our brand image also depends on our ability to adapt to a rapidly changing media environment, including our increasing reliance on social media and online dissemination of advertising campaigns. The growing use of social and digital media increases the speed and extent that information or misinformation and opinions can be shared. Negative posts or comments about us, our brands or our products on social or digital media could seriously damage our reputation and brand image.

We are subject to a variety of legal and regulatory restrictions on how and to whom we market our products, which may limit our ability to maintain or extend our brand image. If we do not maintain or extend our brand image, then our product sales, financial condition and results of operations could be materially and adversely affected.

Any perceived or real health risks related to the food industry could adversely affect our ability to sell our products. If our products become contaminated, we may be subject to product liability claims and product recalls.

We are subject to general risks of the food industry, including risks posed by the following:

•        food spoilage or food contamination;

•        consumer product liability claims;

•        product tampering;

•        the possible unavailability and expense of product liability insurance; and

•        the potential cost and disruption of a product recall.

Our products may in the future be exposed to contamination by organisms that may produce food-borne illnesses, such as E. coli, listeria monocytogenes, and salmonella. These organisms are generally found in the environment and, as a result, there is a risk that they could be present in our products. These pathogens can also be introduced to our products through tampering or as a result of improper handling at the further processing, food service, or consumer level. Once contaminated products have been shipped for distribution, illness or death may result if the products are not properly prepared prior to consumption or if the pathogens are not eliminated in further processing.

Our systems designed to monitor food safety risks throughout all stages of our processes may not eliminate the risks related to food safety. As a result, we may voluntarily recall, or be required to recall, our products if they are or may be contaminated, spoiled, or inappropriately labeled.

We may be subject to significant liability in the jurisdictions in which our products are sold if the consumption of any of our products causes injury, illness, or death. Such liability may result from proceedings filed by the distributor customers, consumer agencies, and individual consumers. We may have to pay significant damages and such liability may be in excess of applicable liability insurance policy limits. Adverse publicity concerning any perceived or real health risk associated with our products could also cause customers to lose confidence in the safety and quality of our food products, which could adversely affect our ability to sell our products. We could also be adversely affected by perceived or real health risks associated with similar products produced by others to the extent that such risks cause customers to lose confidence in the safety and quality of such products generally.

Changes in consumer preferences could adversely affect our business.

The food industry, in general, is subject to changing consumer trends, demands, and preferences. We may fail to anticipate, identify, or respond to changes in consumer preferences and needs on a timely basis, and as a result, may be unable to continue to gain market receptiveness and market share for our products. Consumer preferences and demands for products and brands change from time to time for various reasons, such as the emergence of competitive products and brands that our competitors may be able to introduce that are more appealing to consumers, or a general decrease in demand for certain products sold by us. Any change in consumer preferences could require us to change our pricing, marketing, or promotional strategies. Any change in our strategy or any failure to respond effectively to changes in consumer preferences and needs could adversely affect our business and the results of operations.

Our business depends significantly on the market recognition of our “Wing Yip” (“荣业”) brand.

We believe that our business growth depends significantly on our flagship brand name “Wing Yip” (“荣业”) and the reputation for trustworthy and quality products associated with our brand. We believe that the market recognition of our brand plays a vital role in influencing consumer decisions in purchasing our products, and our continued growth will depend largely on our ability to protect and enhance the value of our brand. We have invested significant effort and resources to establish brand recognition through various channels and have received various awards and recognitions for our brand. As we continue to expand our sales network, our ability to market, protect, and enhance our brand will remain critical to the success of our business. Any incident that erodes consumer trust in our brand could significantly reduce our brand value and, hence, affect our business, results of operations, and prospects.

We may not be able to prevent unauthorized use of our intellectual property, which could reduce demand for our products, adversely affect our revenues and harm our competitive position.

As of the date of this prospectus, we have registered various intellectual property rights in the PRC, which includes trademarks, invention patents, utility model patents, software copyrights and certain domain names. We cannot assure you that the steps we have taken or will take in the future to protect our intellectual property or prevent piracy will prove to be sufficient. Current or potential competitors may use our intellectual property without our authorization in the development of products that are substantially equivalent or superior to it, which could reduce demand for our products, adversely affect our revenues and harm its competitive position. Even if we were to discover evidence of infringement or misappropriation, our recourse against such competitors may be limited or could require us to pursue litigation against the infringing parties, which could involve substantial costs and diversion of management’s attention from the operation of our business and have an adverse effect on our financial performance. Please refer to “Business — Intellectual Property” of this prospectus for further details of our intellectual property rights.

We may face intellectual property infringement claims against us, which could be time-consuming and costly to defend and may result in the loss of significant rights by us.

Intellectual property litigation is expensive and time-consuming and could divert resources and management attention from the operation of our business even if the claim is without merit. We cannot assure you that such infringement claims will not be asserted against us in the future. If there is a successful claim of infringement, we may be required to alter our services, cease certain activities, pay substantial royalties and damages to, and obtain one or more licenses from, third parties. We may not be able to obtain those licenses on commercially acceptable terms, or at all. Any of those consequences could cause us to lose revenues, impair our client relationships and harm our reputation.

Our operating subsidiaries’ operations may be adversely affected by the disruption of logistics services or poor handling of products by third-party logistics service providers.

Our operating subsidiaries rely on third-party logistics service providers to provide a range of transportation and logistics services for the delivery of products to our physical stores, warehouses, and/or our customers. The shelf life of our processed meat and protein products is generally between 90 to 270 days. Any failure to provide on-time delivery or failure to maintain our operating subsidiaries’ products in good condition during delivery may have a material adverse impact on our operating subsidiaries’ business operations and our reputation. In such event, our operating subsidiaries may be unable to seek full recourse against the logistics service providers in default under the terms of the service contracts or enforce in full any judgments obtained.

We depend on our founding members and other key personnel, and the loss of their services could have a material adverse effect on our business, results of operations, and financial condition.

The success of our Company is attributable to the contribution and experience of our key management team, headed by our director and chairman of the board of directors, Mr. Xiantao Wang. He is responsible for implementing overall business strategies and identifying business opportunities. The key management team also includes our executive director, CEO Ms. Tingfeng Wang and CFO Mr. Haobo Ye. Please refer to “Management” of this prospectus for further details of our directors and executive officers. As such, our continued success is dependent on our ability to retain the services of our key management team, which has collectively amassed over 47 years of experience in the meat processing industry and contributed to the financial and operational aspects of our business. We do not maintain key person life insurance. Our management team currently has no immediate plans to cease providing services to our Company, but our founders and other key personnel are not obligated to remain employed with us. In addition, our other key personnel may leave us in the future, and we cannot predict the impact that the departure of any key personnel will have on our ability to achieve our investment objectives. The loss of the services of any of them could have a material adverse effect on our revenues, net income, and cash flow.

In order to recruit and retain existing and future senior professionals and other key personnel, we may need to increase the level of compensation that we pay to them. Accordingly, as we promote or hire new senior professionals and other key personnel over time or attempt to retain the services of certain of our key personnel, we may increase compensation we pay to these individuals, which could cause our total employee compensation and benefits expense as a percentage of our total revenue to increase and adversely affect our profitability.

We are dependent on the mainland China market.

We are dependent on the mainland China market, as substantially all of our customers are located in mainland China. We anticipate that the mainland China market will continue to be a significant sales and production base for our Group in the near future and we are therefore susceptible to the market conditions in mainland China. Any adverse changes in the economic conditions in mainland China will affect consumers’ spending patterns and purchasing power and may negatively impact the demand for our products resulting in our revenue, future performance and profitability being materially and adversely affected.

Any failure to obtain or renew approvals, licenses, permits, and quality/product certifications for certain markets required for our operating subsidiaries’ operations could materially and adversely affect our business and results of operations.

Our operating subsidiaries’ business is regulated by various laws and regulations in mainland China, which, among other things, require them to complete certain registrations and obtain various licenses, permits, and quality/product certificates for our operations. For details, see “Business — Licenses, Awards and Certificates,” and “Regulations.”

Most of the licenses needed for our operating subsidiaries’ operations are subject to examinations or verifications by relevant authorities and are valid only for a fixed period of time, subject to renewal and accreditation. Compliance with the relevant laws and regulations may require substantial expenses, and any non-compliance with such laws and regulations may expose our operating subsidiaries to liabilities. In case of any non-compliance, our operating subsidiaries may have to incur significant expenses and divert substantial management time to remedy any deficiencies. There can be no assurance that our operating subsidiaries will be able to obtain or renew all of the approvals, licenses, permits, and certifications required for our operating subsidiaries’ existing business operations upon expiration in a timely manner or at all. If our operating subsidiaries cannot obtain or maintain all licenses required to operate our operating subsidiaries’ business, planned new business operations and expansion may be delayed, and our operating subsidiaries’ ongoing business could be interrupted. Our operating subsidiaries may also be subject to prosecutions and penalties.

We face risks related to natural disasters, health epidemics, and other outbreaks, which could significantly disrupt our operations.

Our business may be adversely affected by instability, disruption, or destruction in a geographic region of China in which our operating subsidiaries operate, regardless of cause, including international supply chain disruptions or delays, war, terrorism, riot, civil insurrection, or social unrest, and natural or manmade disasters, including famine, flood, fire, earthquake, storm or pandemic events and spread of disease (including the COVID-19 pandemic). Such

events may cause our customers to suspend their decisions to purchase our products, as well as give rise to sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risks to our personnel, physical facilities, and operations, which could materially adversely affect our financial results.

Outbreaks of disease among livestock and poultry flocks could harm the Company’s revenues and operating margins.

The Company is subject to risks associated with the outbreak of disease in pork and beef livestock, and poultry flocks, including African swine fever (ASF), Bovine Spongiform Encephalopathy (BSE), pneumo-virus, Porcine Circovirus 2 (PCV2), Porcine Reproduction & Respiratory Syndrome (PRRS), Foot-and-Mouth Disease (FMD), Porcine Epidemic Diarrhea Virus (PEDv), and Highly Pathogenic Avian Influenza (HPAI). The outbreak of such diseases could adversely affect the Company’s supply of raw materials, increase the cost of production, reduce utilization of the Company’s harvest facilities, and reduce operating margins. Additionally, the outbreak of disease may hinder the Company’s ability to market and sell products within mainland China.

In recent years, the outbreak of ASF has impacted hog herds in China, Asia, and Europe. If an outbreak of ASF were to occur in China again in the future, the Company’s supply of hogs and pork could be materially impacted.

The Company has developed business continuity plans for various disease scenarios and will continue to update these plans as necessary. The Company also regularly engages in meat raw material stockpiling, ensuring ample inventory preparedness to withstand negative external influences. There can be no assurance given, however, that these plans will be effective in eliminating the negative effects of any such diseases on the Company’s operating results.

The COVID-19 pandemic has affected, and could continue to affect, the global economy as a whole and the markets in which we operate.

The COVID-19 pandemic has caused volatility in the global economy and resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of the virus. However, as a whole, our business and operations have not been affected by the pandemic-related lockdowns in mainland China during COVID-19 pandemic. As food is a key staple commodity, and our products have a relatively long shelf life and are easily stored because of vacuum packaging, demands for our products, including cured meat products, snack products and frozen meat products, remained strong in mainland China during the COVID-19 pandemic, and we have not experienced a decline in consumer demand for our products in mainland China. In addition, our operating subsidiaries employ multiple sales channels, with the channels of supermarkets and online sales experiencing growth during the COVID-19 pandemic.

The impact of the COVID-19 pandemic on our business going forward will depend on a range of factors which we are not able to accurately predict, including the duration and scope of the pandemic, a repeat of the spike in the number of COVID-19 cases, the geographies impacted, the impact of the pandemic on economic activity and the nature and severity of measures adopted by governments, including restrictions on travel, mandates to avoid large gatherings and orders to self-quarantine or shelter in place.

The COVID-19 pandemic has also led to sharp reductions in global growth rates and the ultimate impact on the global economy remains uncertain. Accordingly, the COVID-19 pandemic may have significant negative impacts in the medium and long term, including on our business, financial condition, results of operations, cash flows and prospects.

We are subject to risks of loss of proprietary information.

Our ability to compete successfully and/or to achieve future growth in sales will depend, in part, on our ability to protect our proprietary information relating to our product development, production, and marketing of processed meat products. Our directors and executive officers and all other employees, who may come into possession of such proprietary information including our technical know-how and our customer database in the course of their employment with us, are under an obligation to maintain confidentiality on any such information during their term of employment with us, as well as for a prescribed period after the cessation of their employment. However, there is no assurance that such confidentiality obligations will not be breached. In the event of a disclosure of our proprietary information by any employee in breach of their confidentiality obligations, in particular, where disclosure is made

to third parties who may be our competitors or prospective competitors, our ability to compete against such parties may be materially and adversely affected. This would, in turn, have a material adverse impact on our business and profitability as well as our prospects.

We may be harmed by negative publicity.

We operate in a highly competitive industry, and there are other companies in the market that offer similar products. We rely on the positive feedback of our loyal customers to expand our customer base. Thus, customer satisfaction is critical to the success of our business, as this will also result in potential referrals from our existing customers. If we fail to meet our customers’ expectations, there may be negative feedback regarding our products, which may have an adverse impact on our business and reputation. In the event we are unable to maintain a high level of customer satisfaction or any customer dissatisfaction is inadequately addressed, our business, financial condition, results of operations, and prospects may also be adversely affected.

Our reputation may also be adversely affected by negative publicity in reports and publications such as major newspapers and forums, or any other negative publicity or rumors. There is no assurance that we will not experience negative publicity in the future or that such negative publicity will not have a material and adverse effect on our reputation or prospects. This may result in our inability to attract new customers or retain existing customers and may in turn adversely affect our business and the results of operations.

We may be affected by adverse changes in taxation law, tax treaties and in the practices of tax authorities.

Changes in taxation legislation, tax treaties and in the practices of tax authorities can affect investment behavior which can have the effect of making specific kinds of investment products either more or less attractive to existing or potential investors.

We cannot predict the impact of future changes to tax legislation, tax treaties and the practices of tax authorities on our business or on the attractiveness of our investment projects. Amendments to existing tax legislation (in particular if there is a withdrawal of any available tax relief or an increase in tax rates) and tax treaties or the introduction of new rules and new tax treaties or changes in the practices of tax authorities may affect the investment decisions of either existing or potential investors. Changes from time to time in the interpretation of existing tax laws, amendments to existing tax rates, the introduction of new tax legislation and tax treaties, a change in the interpretation of tax legislation, any change in the enforcement of such legislation or any particular change in our tax treatment could have a material adverse effect on our business, growth prospects, fee income, results of operations and/or financial condition.

Our current insurance policies may not provide adequate levels of coverage against all claims and we may incur losses that are not covered by our insurance.

We believe we maintain insurance coverage that is customary for businesses of our size and type. However, we may be unable to insure against certain types of losses or claims, or the cost of such insurance may be prohibitive. Uninsured losses or claims, if they occur, could have a material adverse effect on our reputation, business, results of operations, financial condition, or prospects.

We might face risks related to compliance with environmental regulations in mainland China, including waste disposal, water usage, emissions standards, and other environmental guidelines. Changes in regulations or failure to comply could result in fines, legal actions, or operational constraints.

We are subject to various domestic environmental laws and regulations that govern the discharge of pollutants and disposal of wastes, and which may require that we investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. We could incur substantial cleanup costs, fines and civil or criminal sanctions, third party property damage or personal injury claims as a result of violations or liabilities under these laws or non-compliance with environmental permits required at our facilities. We also could be subject to future laws and regulations that govern greenhouse gas emissions and various matters related to climate change and other air emissions, which could increase our operating costs.

We believe that we operate our businesses in compliance in all material respects with applicable environmental laws and regulations. As of the date of this prospectus, none of the operating subsidiaries have received any notifications of noncompliance of any environmental regulations from relevant governmental authorities in mainland China. However, we may be involved in lawsuits and other proceedings involving alleged violations of, or liabilities arising from, environmental laws. When our liability is probable and we can reasonably estimate our costs, we record environmental liabilities in our financial statements. However, in many cases, we are not able to determine whether we are liable or if liability is probable or to reasonably estimate the loss or range of loss. Estimates of our liability remain subject to additional uncertainties, including the nature and extent of site contamination, available remediation alternatives, the extent of corrective actions that may be required, and the extent of our responsibility for the remediation. We have taken, and expect to take all reasonable measures to control any probable contamination, however, future developments, administrative actions or liabilities relating to environmental matters, could have a material adverse effect on our financial condition or results of operations.

Risks Relating to this Offering and the Trading Market

There has been no public market for our Ordinary Shares or ADSs in the U.S. prior to the completion of this offering, and you may not be able to resell the ADSs at or above the price you pay for them, or at all.

Prior to the completion of this offering, there has not been a public market for our Ordinary Shares or ADSs in the U.S. Since 2018, our Ordinary Shares have been listed on KOSDAQ of the KRX. Investors who purchase the ADSs in this offering may not be able to sell their ADSs at or above the initial public offering price.

An active or liquid market for the ADSs in the U.S. may not develop upon completion of this offering or, if it does develop, it may not be sustainable given the limited number of ADSs being issued in this offering. The initial public offering price for the ADSs will be determined through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of the ADSs after this offering. This initial public offering price will vary from the market price of the ADSs after the offering. As a result of these and other factors, you may be unable to resell your ADSs at or above the initial public offering price.

The following factors, in addition to other risks described in this prospectus, may have a significant effect on the market price of the ADSs:

•        variations in our operating results;

•        actual or anticipated changes in the estimates of our operating results;

•        changes in stock market analyst recommendations regarding the ADSs, other comparable companies or our industry generally;

•        currency exchange fluctuations and the denominations in which we conduct business and hold our cash reserves;

•        market conditions in our industry, the industries of our customers and the economy as a whole;

•        actual or expected changes in our growth rates or our competitors’ growth rates;

•        changes in the market valuation of similar companies;

•        the trading volume of the ADSs on Nasdaq;

•        sales of the ADSs by us or our shareholders; and

•        the adoption or modification of regulations, policies, procedures or programs applicable to our business.

In addition, if the meat processing market or the stock market in general experiences a loss of investor confidence, the trading price of the ADSs could decline for reasons unrelated to our business, financial condition, or operating results. The trading price of the ADSs might also decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. Each of these factors, among others, could harm the value of your investment in the ADSs. In the past, following periods of volatility in the market, securities class-action litigation has often been

instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially adversely affect our business, operating results, and financial condition.

The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Ordinary Shares which are represented by your ADSs are voted.

Holders of ADSs do not have the same rights as our registered shareholders. As a holder of the ADSs, you will not have any direct right to attend general meetings of our shareholders or to cast any votes at such meetings. As an ADS holder, you will only be able to exercise the voting rights attached to the Ordinary Shares which are represented by your ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement. Under the deposit agreement, you may vote only by giving voting instructions to the depositary, as the holder of the Ordinary Shares underlying your ADSs. Where any matter is to be put to a vote at a general meeting, then upon receipt of your voting instructions, the depositary will try, as far as is practicable, to vote the underlying Ordinary Shares which are represented by your ADSs in accordance with your instructions. If we ask for your instructions, then upon receipt of your voting instructions, the depositary will try to vote the underlying Ordinary Shares in accordance with these instructions. If we do not instruct the depositary to ask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so. You will not be able to directly exercise your right to vote with respect to the underlying Ordinary Shares represented by your ADSs, unless you cancel the ADSs and withdraw the shares and become the registered holder of such Ordinary Shares prior to the record date for the general meeting. Under our articles of association, the minimum notice period required to be given by our Company to our registered shareholders to convene a general meeting will be 14 clear days, (or, in respect of an annual general meeting, 21 clear days). When a general meeting is convened, you may not receive sufficient advance notice of the meeting to withdraw the Ordinary Shares underlying your ADSs and become the registered holder of such shares to allow you to attend the general meeting and to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting. In addition, under our articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members and/or fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the Ordinary Shares underlying your ADSs and becoming the registered holder of such shares prior to the record date, so that you would not be able to attend the general meeting or to vote directly. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our voting materials to you. We have agreed to give the depositary at least 30 business days’ prior notice of shareholder meetings. Nevertheless, we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the underlying Ordinary Shares represented by your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to direct how the Ordinary Shares underlying your ADSs are voted and you may have no legal remedy if the Ordinary Shares underlying your ADSs are not voted as you requested. In addition, in your capacity as an ADS holder, you will not be able to call a shareholders’ meeting. Except in limited circumstances, the depositary for the ADSs will give us a discretionary proxy to vote the Ordinary Shares underlying your ADSs if you do not vote at shareholders’ meetings, which could adversely affect your interests.

You may experience dilution of your holdings due to inability to participate in rights offerings.

We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. Under the deposit agreement, the depositary will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs, or are registered under the provisions of the Securities Act. The depositary may, but is not required to, attempt to sell these undistributed rights to third parties, and may allow the rights to lapse. We may be unable to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result.

Future issuances of the ADSs or Ordinary Shares or securities convertible into, or exercisable or exchangeable for, our Ordinary Shares, or the expiration of lock-up agreements that restrict the issuance of new ADSs or Ordinary Shares or the trading of outstanding ADSs or Ordinary Shares, could cause the market price of the ADSs to decline and would result in the dilution of your holdings.

Future issuances of the ADSs or our Ordinary Shares or securities convertible into, or exercisable or exchangeable for, our Ordinary Shares, or the expiration of lock-up agreements that restrict the issuance of new ADSs or Ordinary Shares or the trading of outstanding ADSs or Ordinary Shares, could cause the market price of the ADSs to decline. We cannot predict the effect, if any, of future issuances of our securities, or the future expirations of lock-up agreements, on the price of the ADSs. In all events, future issuances of the ADSs or our Ordinary Shares would result in the dilution of your holdings. In addition, the perception that new issuances of our securities could occur, or the perception that locked-up parties will sell their securities when the lock-ups expire, could adversely affect the market price of the ADSs. In connection with this offering, we will enter into a lock-up agreement that prevents us, subject to certain exceptions, from offering additional shares of capital stock for up to six months from the effective date of the registration statement of which this prospectus forms a part, as further described in the section titled “Underwriting.” In addition to any adverse effects that may arise upon the expiration of these lock-up agreements, the lock-up provisions in these agreements may be waived, at any time and without notice. If the restrictions under the lock-up agreements are waived, the ADSs or our Ordinary Shares may become available for resale, subject to applicable law, including without notice, which could reduce the market price for the ADSs.

You may be subject to limitations on transfer of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate action events such as a rights offering. The depositary may also close its books in emergencies, and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

ADSs holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.

The deposit agreement governing the ADSs representing our Ordinary Shares provides that, subject to the depositary’s right to require a claim to be submitted to arbitration, the federal or state courts in the City of New York have exclusive jurisdiction to hear and determine claims arising under the deposit agreement and in that regard, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our Ordinary Shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.

If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable U.S. state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before investing in the ADSs.

If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under U.S. federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary. If a lawsuit is brought against us and/or

the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action.

Nevertheless, if the foregoing jury trial waiver provision is not enforced, to the extent a court action proceeds, it would proceed under the terms of the deposit agreement with a jury trial. No condition, stipulation or provision of the deposit agreement or ADSs shall relieve us or the depositary from our respective obligations to comply with the Securities Act and the Exchange Act.

Your rights to pursue claims against the depositary as a holder of ADSs are limited by the terms of the deposit agreement.

Under the deposit agreement, any action or proceeding against or involving the depositary, arising out of or based upon the deposit agreement or the transactions contemplated thereby or by virtue of owning the ADSs may only be instituted in a state or federal court in New York, New York, and you, as a holder of our ADSs, will have irrevocably waived any objection which you may have to the laying of venue of any such proceeding, and irrevocably submitted to the exclusive jurisdiction of such courts in any such action or proceeding.

The depositary may, in its sole discretion, require that any dispute or difference arising from the relationship created by the deposit agreement be referred to and finally settled by arbitration conducted under the terms described in the deposit agreement, which may include claims arising under the federal securities laws, although the arbitration provisions of the deposit agreement do not preclude you from pursuing claims under the Securities Act or Exchange Act in state or federal courts. No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with the Securities Act and the Exchange Act. The state and federal courts sitting in New York generally respect the contractual decision of the parties to submit their disputes to arbitration and such arbitration provisions are generally enforceable under the U.S. federal laws and the laws of the State of New York, subject to certain exceptions, such as corruption, fraud or undue means. Therefore, we believe that the arbitration provision in the deposit agreement is enforceable under the U.S. federal laws and the laws of the State of New York. See “Description of American Depositary Shares — Jurisdiction and Arbitration” for more information.

The deposit agreement may be amended or terminated without your consent.

We and the depositary may amend or terminate the deposit agreement without your consent. Such amendment or termination may be done in favor of our Company. Holders of the ADSs, subject to the terms of the deposit agreement, will receive notice in the event of an amendment that prejudices a substantial existing right or a termination. If you continue to hold your ADSs after an amendment to the deposit agreement, you agree to be bound by the deposit agreement as amended. The deposit agreement may be terminated at any time upon a prior written notice. Upon the termination of the deposit agreement, our Company will be discharged from all obligations under the deposit agreement, except for our obligations to the depositary thereunder. See “Description of American Depositary Shares” for more information.

Holders or beneficial owners of the ADSs have limited recourse if we or the depositary fail to meet our respective obligations under the deposit agreement.

The deposit agreement expressly limits the obligations and liability of us and the depositary. For example, the depositary is not liable if any of us or our respective controlling persons or agents are prevented or forbidden from, or subjected to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement and any ADR, by reason of any provision of any present or future law or regulation of the United States or any state thereof, Hong Kong or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the possible criminal or civil penalties or restraint, or by reason of any provision, present or future, of our articles of association, or any provision of or governing any deposited securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure). See “Description of American Depositary Shares” for more information.

In addition, the depositary and any of its agents also disclaim any liability for (i) any failure to carry out any instructions to vote, the manner in which any vote is cast or the effect of any vote or failure to determine that any distribution or action may be lawful or reasonably practicable or for allowing any rights to lapse in accordance with the provisions of the deposit agreement, (ii) the failure or timeliness of any notice from us, the content of any information submitted to it by us for distribution to you or for any inaccuracy of any translation thereof, (iii) any investment risk associated with the acquisition of an interest in the deposited securities, the validity or worth of the deposited securities or the credit-worthiness of any third party, (iv) any tax consequences that may result from ownership of ADSs, ordinary shares or deposited securities, or (v) any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the depositary or in connection with any matter arising wholly after the removal or resignation of the depositary, provided that in connection with the issue out of which such potential liability arises the depositary performed its obligations without gross negligence or willful misconduct while it acted as depositary. These provisions of the deposit agreement will limit the ability of holders or beneficial owners of the ADSs to obtain recourse if we or the depositary fail to meet our respective obligations under the deposit agreement.

The depositary for the ADSs will give us a discretionary proxy to vote our Ordinary Shares underlying your ADSs if you do not vote at shareholders’ meetings, except in limited circumstances, which could adversely affect your interests.

Under the deposit agreement for the ADSs, if you do not vote, the depositary will give us a discretionary proxy to vote our Ordinary Shares underlying your ADSs at shareholders’ meetings, unless:

•        we have instructed the depositary that we do not wish a discretionary proxy to be given;

•        we are aware or should reasonably be aware that there is substantial opposition from holders against the outcome for which we would vote; or

•        the outcome for which we would otherwise vote on would materially and adversely affect the rights of shareholders.

The effect of this discretionary proxy is that if you do not vote at shareholders’ meetings, you cannot prevent our Ordinary Shares underlying your ADSs from being voted, except under the circumstances described above. This may make it more difficult for shareholders to influence the management of our Company. Holders of our Ordinary Shares are not subject to this discretionary proxy.

You will experience immediate and substantial dilution in the net tangible book value of ADSs purchased.

The initial public offering price of the ADSs is substantially higher than the (pro forma) net tangible book value per ADS of the ADSs. Consequently, when you purchase the ADSs in the offering, upon completion of the offering you will incur immediate dilution of US$[•] per share, assuming an initial public offering price of US$[•]. See “Dilution.” In addition, you may experience further dilution to the extent that additional ADSs are issued upon exercise of outstanding options we may grant from time to time.

If we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of the ADSs may be materially and adversely affected.

In preparing our consolidated financial statements as of and for the fiscal years ended December 31, 2021 and 2022, and the six-month period ended June 30, 2023, we and our independent registered public accounting firm have identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the PCAOB, and other control deficiencies. The material weaknesses identified included (i) the lack of formal internal control policies and internal independent supervision functions to establish formal risk assessment process and internal control framework over financing reporting; and (ii) the lack of accounting staff and resources with appropriate knowledge of generally accepted U.S. accounting principles (“U.S. GAAP”) and SEC reporting and compliance requirements to design and implement formal period-end financial reporting policies and procedures to address complex U.S. GAAP technical accounting issues in accordance with U.S. GAAP and the SEC requirements. Following the identification of the material weaknesses and control deficiencies, we have taken the following remedial measures: (i) hiring additional qualified accounting and financial personnel with appropriate knowledge and experience in U.S. GAAP accounting and SEC reporting; and (ii) organizing regular training for our accounting staff, especially training related to U.S. GAAP and

SEC reporting requirements. We also plan to adopt additional measures to improve our internal control over financial reporting, including, among others, creating U.S. GAAP accounting policies and a procedures manual, which will be maintained, reviewed, and updated, on a regular basis, to the latest U.S. GAAP accounting standards, and establishing an audit committee and strengthening corporate governance. However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting. Our failure to correct the material weaknesses or our failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, and the trading price of the ADSs, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.

Upon completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2024. In addition, once we cease to be an “emerging growth company,” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company in the U.S., our reporting obligations may place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.

Our holding company structure and potential restrictions on the payment of dividends could materially adversely affect our market price.

Wing Yip is a holding company with no direct business operations other than its ownership of the capital stock of its subsidiaries and equity investees. Wing Yip’s principal assets are the equity interests it directly or indirectly holds in its operating subsidiaries. As a holding company, Wing Yip’s ability to pay dividends and meet its other obligations depends upon the amount of distributions, if any, received from its operating subsidiaries and other holdings and investments. Wing Yip’s operating subsidiaries and other holdings and investments, from time to time, may be subject to restrictions on their ability to make distributions to Wing Yip, including, but not limited to, as a result of restrictive covenants contained in loan agreements, restrictions on the conversion of local currency earnings into U.S. dollars or other currency, and other regulatory restrictions. For example, legal restrictions permit payments of dividends by our business entities in mainland China only out of their retained earnings, if any, determined in accordance with relevant accounting standards and regulations of mainland China. Under mainland China law, such entities are also required to set aside a portion of their net income each year to fund certain reserve funds. These reserves are not distributable as cash dividends. The foregoing restrictions may also affect Wing Yip’s ability to fund the operations of one subsidiary with dividends and other payments received from another subsidiary. Distributions may also be limited from time to time by reason of the current cash requirements of Wing Yip’s operating subsidiaries. Such restrictions on payments involving entities organized in mainland China could adversely affect our liquidity, our business results, and thus, the price of the ADSs.

In addition, were we able to declare dividends, such dividends could only be paid by us out of our distributable profits (that is, our accumulated realized profits less our accumulated realized losses) permitted under Hong Kong law. Dividends cannot be paid out of our share capital. To the extent profits are distributed as dividends, such a portion of profits will not be available to be reinvested in our operations. See “Description of Share Capital.” Dividends must be paid in accordance with the procedures and requirements specified in our articles of association. When recommending dividends, our directors must act in the general interest of all classes of shareholders and must not favor any one class at the expense of another in accordance with Hong Kong law. The payment and the amount, form, and frequency of any future dividends will depend on our results of operations, cash flows, financial condition, statutory, regulatory, and contractual restrictions on the payment of dividends by us, future prospects, and other factors that our directors may consider relevant. Our board of directors has discretion as to whether to distribute dividends and determine new dividend policies, subject to certain requirements of Hong Kong law. Holders of the ADSs will be entitled to receive dividends pro rata according to the amounts paid up or credited as paid up on the Ordinary Shares.

We may need to raise additional funds to support our business operations or to finance future acquisitions, including through the issuance of equity or debt securities, which could have a material adverse effect on our ability to grow our business.

If we do not generate sufficient cash from operations or do not otherwise have sufficient cash and cash equivalents to support our business operations or to finance future acquisitions, we may need raise addition capital through the issuance of debt or equity securities. We may not be able to raise cash in future financing on terms acceptable to us, or at all.

Financings, if available, may be on terms that are dilutive to our shareholders, and the prices at which new investors would be willing to purchase our securities may be lower than the current price of the ADSs. The holders of new securities may also receive rights, preferences or privileges that are senior to those of existing holders of the ADSs. If new sources of financing are required but are insufficient or unavailable, we would be required to modify our plans to the extent of available funding, which could harm our ability to grow our business.

We are a Hong Kong company and it may be difficult for you to enforce judgments outside Hong Kong against us or certain of our directors or officers who reside in Hong Kong.

We are a holding company incorporated under the laws of Hong Kong. As a result, the rights of holders of our Ordinary Shares will be governed by Hong Kong law, and our articles of association, as may be amended from time to time. The rights of shareholders under Hong Kong law may differ from the rights of shareholders of companies incorporated in other jurisdictions. All of our directors and officers reside outside the United States and our material assets are located outside the United States. As a result, it may be difficult for investors to effect service of process on those persons in the United States or to enforce in the United States judgments obtained in United States courts against us or those persons based on the civil liability provisions of the United States securities laws. Even if investors are successful in realizing judgments against such persons in courts of the United States, the laws of Hong Kong or mainland China may render such investors unable to enforce the judgment against our assets or the assets of our officers and directors. Also, investors may have difficulty in bringing an original action based upon the United States federal securities laws against such persons in mainland China courts. Additionally, there is uncertainty as to whether the courts in Hong Kong will enforce judgments obtained in other jurisdictions, including the United States, against us or our directors or officers under the securities laws of those jurisdictions or entertain actions in Hong Kong against us or our directors or officers under the securities laws of other jurisdictions.

Furthermore, we have been advised by our counsel as to the laws of Hong Kong, Patrick Mak & Tse, that in Hong Kong, foreign judgments can be enforced under the Foreign Judgments (Reciprocal Enforcement) Ordinance or under common law. The Foreign Judgments (Reciprocal Enforcement) Ordinance is a registration scheme for the recognition and enforcement of foreign judgments based on reciprocity, but the United States is not a designated country under the Foreign Judgments (Reciprocal Enforcement) Ordinance. As a result, a judgment rendered by a court in the United States, including as a result of administrative actions brought by regulatory authorities, such as the SEC, and other actions, will not be enforced by the Hong Kong courts under the statutory regime. In addition, the Supreme People’s Court of the PRC and the Government of Hong Kong have entered into the “Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region pursuant to Choice of Court Agreements between Parties Concerned,” or the Arrangement. The Mainland Judgements (Reciprocal Enforcement) Ordinance gave effect to the Arrangement and is a registration scheme for recognition and enforcement of mainland China judgements based on reciprocity. Other than the Arrangement, Hong Kong has not entered into any multilateral convention or bilateral treaty regarding the recognition and enforcement of foreign judgments. Accordingly, any judgments rendered by a court in the United States will need to be enforced under common law. In order to enforce a foreign judgment under common law in Hong Kong, the judgment must meet certain criteria before it can be enforced, such as the judgment being final and conclusive.

Our articles of association restrict shareholders from bringing legal action against our officers and directors.

Our articles of association that contain a broad waiver by our shareholders of any claim or right of action such shareholder may have, whether individually or by or in our right, against any of our directors or officers on account of any action taken by such director or officer, or the failure of such director or officer to take any action in the performance of his or her duties with or for us; provided that such waiver does not extend to any matter in respect of

any fraud or dishonesty which may attach to such director or officer. This waiver limits the right of shareholders to assert claims against our directors and officers unless the act or failure to act involves any fraud or dishonesty of such director or officer.

We have provisions in our articles of association that may discourage a change of control.

Our articles of association contain provisions that could delay or prevent a change of control of our Company that a shareholder might consider favorable. These provisions include, among others:

•        subject to the prior approval of our shareholders, our board of directors is permitted to issue any shares and to fix the price, rights, preferences and restrictions of any such shares, provided that, among other things, no shares shall be issued to transfer a controlling interest in the Company without the prior approval of our shareholders in general meeting;

•        provisions that limit the ability of shareholders to requisition and convene general meetings of shareholders;

•        the approval of a majority of not less than three-fourths of the votes cast by our shareholders, being entitled so to do, voting in person or by proxy, is required to effect amendments to our articles of association; and

•        the requirement for shareholders wishing to propose a person for election as a director to give the Company advance written notice of nomination of such person for the election of director.

These provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many shareholders. As a result, shareholders may be limited in their ability to obtain a premium for their shares.

We are an “emerging growth company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised, and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

We will incur substantial increased costs as a result of being a public company in the U.S.

Upon consummation of this offering, we will incur significant legal, accounting, and other expenses as a public company in the U.S. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.

Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. We have incurred additional costs in obtaining director and officer liability insurance. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.

We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least US$1.235 billion, or (c) in which we are deemed to be a large

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions in this prospectus. These statements are likely to address our growth strategy, financial results and product and development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

•        assumptions about our future financial and operating results, including revenue, income, expenditures, cash balances, and other financial items;

•        our ability to execute our growth, and expansion, including our ability to meet our goals;

•        current and future economic conditions;

•        our capital requirements and our ability to raise any additional financing which we may require;

•        our ability to attract clients and further enhance our brand recognition;

•        our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business;

•        trends and competition in the meat processing industry;

•        the COVID-19 pandemic; and

•        other assumptions described in this prospectus underlying or relating to any forward-looking statements.

We describe certain material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.

Industry Data and Forecasts

This prospectus contains data related to the meat processing industry in mainland China. These industry data include projections that are based on a number of assumptions, which have been derived from industry and government sources, which we believe to be reasonable. The meat processing industry may not grow at the rate projected by industry data, or at all. The failure of these industries to grow as anticipated is likely to have a material adverse effect on our business and the market price of the ADSs. In addition, the rapidly changing nature of the meat processing industry subjects any projections or estimates relating to the growth prospects or future condition of our industries to significant uncertainties. Furthermore, if any one or more of the assumptions underlying the industry data turns out to be incorrect, actual results may, and are likely to, differ from the projections based on these assumptions.

ENFORCEABILITY OF CIVIL LIABILITIES

We are a holding company incorporated under the laws of Hong Kong. As a result, the rights of holders of the ADSs will be governed by Hong Kong law and our articles of association. The rights of shareholders under Hong Kong law may differ from the rights of shareholders of companies incorporated in other jurisdictions. Substantially all of our assets are located in mainland China. In addition, a majority of our directors and officers reside in mainland China, including our director and chairman of the board of directors, Mr. Xiantao Wang, our director and CEO, Ms. Tingfeng Wang, our CFO, Mr. Haobo Ye, our independent director, Mr. Yang Chen, and our independent director Mr. Nanlong Liu and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. Patrick Mak & Tse, our counsel with respect to the laws of Hong Kong, has advised us that it is uncertain and case specific that whether courts in Hong Kong will enforce judgments obtained in other jurisdictions, including the United States, against us or our directors or officers under the securities laws of those jurisdictions or entertain actions in Hong Kong against us or our directors or officers under the securities laws of other jurisdictions.

We have appointed Cogency Global Inc. as our agent to receive service of process with respect to any action brought against us in the United State District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

Jincheng Tongda & Neal Law Firm, our counsel with respect to mainland China law, has advised us that there is uncertainty as to whether the courts of mainland China would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in the mainland China against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

Jincheng Tongda & Neal Law Firm has further advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. Mainland China courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedure Law (2023), promulgated on September 1, 2023 and effective on January 1, 2024, based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. There are no treaties and rarely no other forms of reciprocity between China and the United States for the mutual recognition and enforcement of court judgments as of the date of this prospectus. Jincheng Tongda & Neal Law Firm, has further advised us that under mainland China law, mainland China courts will not enforce a foreign judgment against us or our officers and directors if the court decides that such judgment violates the basic principles of mainland China law or national sovereignty, security or public interest, thus making the recognition and enforcement of a U.S. court judgment in mainland China difficult. As a result, it is uncertain whether and on what basis a mainland China court would enforce a judgment rendered by a court in the United States or in Hong Kong.

Under the PRC Civil Procedures Law (2023), foreign shareholders may originate actions based on mainland China law before a mainland China court against a company for all types of civil disputes, except for those relating to identity relationship, and the mainland China court may accept a cause of action if there is appropriate connection to China for a mainland China court to have jurisdiction as required by law, or based on the parties’ express mutual agreement in writing choosing mainland China courts for dispute resolution. The mainland China court will determine whether to accept the complaint in accordance with the PRC Civil Procedures Law. The foreign shareholder must entrust mainland China legal counsel to participate on behalf of such shareholder. Foreign citizens and companies will have the same rights as Chinese citizens and companies in an action unless the home jurisdiction of such foreign citizens or companies restricts the rights of Chinese citizens and companies. However, it remains uncertain whether the mainland China courts will accept a lawsuit originated by U.S. shareholders against us in mainland China, by virtue only of holding the ADSs, to establish an “appropriate connection” to China for a mainland China court to have jurisdiction as required under the PRC Civil Procedures Law (2023).

USE OF PROCEEDS

Based upon an assumed initial public offering price of US$[•] per ADS, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, we estimate that we will receive net proceeds from this offering, after deducting the estimated underwriting discounts, the non-accountable expense allowance and the estimated offering expenses payable by us, of approximately US$[•] if the underwriters do not exercise their over-allotment option, and US$[•] if the underwriters exercise their over-allotment option in full.

We plan to use the net proceeds we receive from this offering for the following purposes:

•        approximately 48% for upgrading existing production lines and establishing new production lines;

•        approximately 22% for marketing and promotion of our products;

•        approximately 15% for new product research and development; and

•        approximately 15% for working capital and general corporate matters.

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

DIVIDEND POLICY

Our Ordinary Shares have been listed on KOSDAQ since 2018, Wing Yip distributed dividends to its shareholders or investors for each fiscal year between 2019 and 2021. For the fiscal year ended December 31, 2022 and the six months ended June 30, 2023, we have not received any dividends or distributions from our subsidiaries, nor have we paid any dividends or distributions to our shareholders or U.S. investors. We might pay certain amount of cash dividends in the foreseeable future, depending on our financial performance for a specific fiscal year. Subject to the PFIC rules, the gross amount of distributions we make to investors with respect to the ADSs (including the amount of any taxes withheld therefrom) will be taxable as a dividend, 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.

Subject to our articles of association and applicable Hong Kong law, our board of directors has discretion as to whether we will pay dividends in the future. Subject to our articles of association and applicable Hong Kong law, our shareholders in general meeting may declare dividends to be paid to the shareholders of the Company but no dividend shall be declared in excess of the amount recommended by our board of directors. Under the applicable Hong Kong law, we may not declare or pay dividends if there are reasonable grounds for believing that the Company has no distributable profit which could be the result of the following scenarios: (a) we are, or would after the payment be, unable to pay our liabilities as they become due, or (b) the realizable value of our assets would thereby be less than our liabilities. See “Description of Share Capital.”

As a holding company with no material operations of our own, we will be dependent on receipt of funds from Wing Yip GD. Mainland China regulations currently permit payment of dividends of a mainland China company only out of accumulated distributable after-tax profits as determined in accordance with its articles of association and the accounting standards and regulations in mainland China. In addition, dividends distributed from our PRC subsidiaries to us are subject to PRC taxes, such as withholding tax.

Mainland China regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. As a result, our ability to pay dividends and to finance any debt we may incur depends upon dividends paid by our subsidiaries. If our existing subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. The PRC regulatory authority also imposes certain restrictions on the conversion of RMB into foreign currencies and the remittance of currencies out of mainland China. Therefore, we may encounter difficulties in complying with the administrative requirements necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any.

The principal regulations governing the distribution of dividends by companies in the mainland China include the Company Law of the PRC, which was promulgated by the SCNPC on December 29, 1993, and was most recently amended on December 29, 2023 and will become effective on July 1, 2024. Each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, after making up for previous year’s accumulated losses, if any, to fund certain statutory common reserves, and may stop setting aside such after-tax profits after the aggregate amount of such funds reaches 50% of its registered capital. And for the purpose of avoiding misunderstanding, this portion of our PRC subsidiaries’ respective statutory common reserves are prohibited from being distributed to their shareholders as dividends, except in the event of liquidation. If the shareholders’ meeting or the board of directors distributes the profits to the shareholders by violating the above-mentioned provisions before the losses are made up and the statutory common reserves are drawn, the profits distributed shall be refunded to the Company. Upon contribution to the statutory common reserve using their after-tax profits, our PRC subsidiaries may also make further contribution to the discretionary common reserve using after-tax profits in accordance with a resolution of the shareholders’ meeting. The above-mentioned common reserves shall be used to expanding the production and business scale, increase the registered capital or eliminate future losses in excess of retained earnings of the respective companies. According to the Company Law of the PRC, shareholders shall be distributed with the dividends based on the percentages of the capital that they actually contributed. The exception shall be given if all shareholders agree that they will not be distributed with the dividends based on the percentages of the capital that they contributed.

In addition, the EIT Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by mainland China companies to non-mainland resident enterprises unless reduced under treaties or arrangements between the PRC central government and the governments of other countries or regions where the non-mainland resident enterprises are tax resident. Wing Yip may be considered as non-resident enterprises for tax purposes, so that any dividends paid by Wing Yip GD to Wing Yip may be regarded as Chinese mainland-sourced income and as a result may be subject to mainland China withholding tax at a rate of up to 10%.

Nevertheless, pursuant to the Arrangement between mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the “Double Tax Avoidance Arrangement”, the withholding tax rate in respect of the payment of dividends by a mainland China enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. The 5% withholding tax rate, however, does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than a 25% share ownership in the mainland China entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower mainland China withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to any dividends paid by our PRC subsidiary Wing Yip GD to Wing Yip. If the relevant tax authorities determine that our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong holding company from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. See “Risk Factors — There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our operating subsidiaries in mainland China, and dividends payable by our operating subsidiaries in mainland China to us may not qualify to enjoy certain treaty benefits.”

If we pay any dividends on our Ordinary Shares, we will pay those dividends which are payable in respect of the Ordinary Shares underlying the ADSs to the depositary, as the registered holder of such Ordinary Shares, and the depositary then will pay such amounts to the ADS holders in proportion to the Ordinary Shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See “Description of American Depositary Shares.” Cash dividends, if any, on our Ordinary Shares will be paid in U.S. Dollars.

CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2023:

•        on an actual basis; and

•        on an as adjusted basis to reflect the issuance and sale of the Ordinary Shares in the form of ADSs by us in this offering at the assumed initial public offering price of US$[•] per ADS, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts to the underwriters, the non-accountable expense allowance and the estimated offering expenses payable by us.

You should read this capitalization table in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes appearing elsewhere in this prospectus.

A US$1.00 increase (decrease) in the assumed initial public offering price of US$[•] per ADS would increase (decrease) each of additional paid-in capital, total shareholders’ equity and total capitalization by US$[•] million, assuming the number of Ordinary Shares in the form of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and estimated expenses payable by us.

DILUTION

If you invest in the ADSs, your interest will be diluted for each ADS you purchase to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after this offering. Dilution results from the fact that the initial public offering price per share is substantially in excess of the net tangible book value per ADS attributable to the existing shareholders for our presently issued and outstanding Ordinary Shares.

Our net tangible book value as of June 30, 2023, was US$[•], or US$[•] per Ordinary Share as of that date and US$[•] per ADS. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting the net tangible book value per Ordinary Share (as adjusted for the offering) from the initial public offering price per Ordinary Share and after deducting the estimated underwriting discounts to the underwriters, the non-accountable expense allowance and the estimated offering expenses payable by us.

After giving effect to our sale of [•] ADSs offered in this offering based on an assumed initial public offering price of US$[•] per ADS, after deduction of the estimated underwriting discounts, the non-accountable expense allowance to the underwriters and the estimated offering expenses payable by us, our as adjusted net tangible book value as of June 30, 2023, would have been US$[•], or US$[•] per issued and outstanding Ordinary Share and US$[•] per ADS. This represents an immediate increase in net tangible book value of US$[•] per Ordinary Share and US$[•] per ADS to the existing shareholders, and an immediate dilution in net tangible book value of US$[•] per Ordinary Share and US$[•] per ADS to investors purchasing ADSs in this offering. The as adjusted information discussed above is illustrative only.

A $1.00 increase (decrease) in the assumed initial public offering price of US$[•] per ADS would increase (decrease) our pro forma as adjusted net tangible book value after giving effect to this offering by US$[•], the pro forma as adjusted net tangible book value per Ordinary Share and per ADS after giving effect to this offering by US$[•] per Ordinary Share and US$[•] per ADS, and the dilution in pro forma as adjusted net tangible book value per Ordinary Share and per ADS to new investors in this offering by US$[•] per Ordinary Share and US$[•] per ADS, assuming no change to the number of ADSs offered by us as set forth on the front cover of this prospectus, and after deducting underwriting discounts, the non-accountable expense allowance and estimated offering expenses payable by us.

An increase (decrease) of [ ] ADSs in the number of ADSs offered by us would increase (decrease) our pro forma as adjusted net tangible book value after giving effect to this offering by US$[•], increase (decrease) the pro forma as adjusted net tangible book value per Ordinary Share and per ADS after giving effect to this offering by $[•] per Ordinary Share and $[•] per ADS, and decrease (increase) the dilution in pro forma as adjusted net tangible book value per Ordinary Share and per ADS to new investors in this offering by US$[•] per Ordinary Share and $[•] per ADS, based on an assumed initial public offering price of US$[•] per ADS, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, and after deducting underwriting discounts, the non-accountable expense allowance and estimated offering expenses payable by us.

The following tables illustrate such dilution:

The following tables summarize, on a pro forma as adjusted basis as of June 30, 2023, the differences between existing shareholders and the new investors with respect to the number of Ordinary Shares (in the form of ADS) purchased from us, the total consideration paid and the average price per Ordinary Share before deducting the estimated underwriting discounts, and non-accountable expense allowance to the underwriters and the estimated offering expenses payable by us.

The pro forma as adjusted information as discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of the ADSs and other terms of this offering.

CORPORATE HISTORY AND STRUCTURE

Our Corporate History

Our operations commenced on December 2, 2010 through our wholly owned subsidiary Wing Yip GD in Guangdong, China. On April 24, 2015, Wing Yip was established in Hong Kong as a limited liability company. In December 2015, Wing Yip acquired 100% equity interests in Wing Yip GD, and as a result, Wing Yip became the holding company of Wing Yip GD. On November 26, 2017, Horgos Wing Yip Brand Business Service Co., Ltd. was established as a wholly owned subsidiary of Wing Yip GD, which was voluntarily dissolved in September 2022.

In 2018, we were successfully listed on KOSDAQ (stock code: 900340). On August 12, 2020, Wing Yip HN was established as a private limited liability company in Hainan, China, as a wholly owned subsidiary of Wing Yip GD. On August 3, 2021, Huaiji Wing Yip Food Technology Co., Ltd. was established as a private limited liability company in Guangdong China, as a wholly owned subsidiary of Wing Yip GD, which was voluntarily dissolved in February 2024.

As of the date of this prospectus, Wing Yip GD has seven branches, each of which operate its own physical store in Guangdong Province, China. See “Business — Facilities.”

Our Corporate Structure

The following diagram illustrates our corporate structure as of the date of this prospectus and upon completion of our IPO based on a proposed number of [•] ADSs being offered, assuming no exercise of the underwriters’ over-allotment option.

For details of each shareholder’s ownership, please refer to the beneficial ownership table in the section captioned “Principal Shareholders.”

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Disclosure Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks, and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Overview

We are a holding company incorporated in Hong Kong. As a holding company with no material operation of our own, we conduct our operations through operating subsidiaries in mainland China. Through the operating subsidiaries in China, we are one of the notable meat product processing companies in China. According to the industry report produced by Frost & Sullivan, whom we commissioned in October 2023, in fiscal year 2022, based on retail sales of cured meat products in China, we ranked second with a market share of 9.2%. As of the date of this prospectus, our products are primarily marketed and sold across 18 provinces in mainland China through 7 self-operated stores, 72 distributors, including major retail outlets and supermarkets and 7 e-commerce platforms, including one platform owned by us.

The operating subsidiaries are primarily engaged in the processing, sales and distribution of i) cured meat products, including cured pork sausages, cured pork meat and other cured meat products, such as cured chicken, cured duck and cured fish; ii) snack products, including ready-to-eat sausages, jerky, duck necks, duck feet and claypot rice; and iii) frozen meat products, including frozen sausages, frozen beef patties and frozen chicken breast fillets.

We, through the operating subsidiaries, sell and market our products under our flagship brand “Wing Yip” (“荣业”), which can trace its history back to 1915, when our predecessor business began processing and selling cured sausages under the name “Wing Yip” (“荣业”). Since the commencement of operations through our subsidiary, Wing Yip GD in 2010, we have continuously developed our business and built our brand. In addition to “Wing Yip” (“荣业”), we have also developed the snack product brands “Jiangwang” (“匠王”) and “Kuangke” (“狂客”).

We, through the operating subsidiaries, focus on product development and are committed to improving product quality and expanding our product offerings to cater to evolving consumer preferences. As of the date of this prospectus, our research and development department is composed of 51 employees and it closely collaborates with the sales and marketing department, and the production department to periodically introduce new products and enhance the ingredients and packaging of existing products. We also enter into strategic cooperation agreements with external research institutions for the development of new products and product formulas. Leveraging our expertise in new product development, we developed and introduced 50, 62 and 11 new products to the market, during fiscal years 2021 and 2022, and during the six months ended June 30, 2023, respectively.

We also pride ourselves in upholding high standards for food safety, product quality and sustainability. The operating subsidiaries have stringent quality control systems in place at every stage of our value chain, from processing to sales and distribution. The operating subsidiaries have obtained internationally recognized quality assurance certifications, including (i) the ISO 22000: 2018 Food Safety Management System Certificate, and (ii) the Hazard Analysis and Critical Control Point (HACCP) System Certificate.

We generate revenue primarily from sales of cured meat products, snack products and frozen meat products. For the six months ended June 30, 2023, we had total revenue of approximately $65,956,754 and net income of approximately $6,221,216. Revenue derived from sales of cured meat products, snack products and frozen meat products accounted for approximately 67.28%, 27.63% and 5.09% of our total revenue, respectively.

For the fiscal years ended December 31, 2022 and 2021, we had total revenue of approximately $130,789,405 and $134,034,331, respectively, representing a decrease by approximately 2.42%. Revenue derived from sales of cured meat products accounted for approximately 67.58% and approximately 71.26% of the total revenue for those fiscal years, respectively. Revenue derived from sales of snack products accounted for approximately 27.45% and approximately 25.69% of the total revenue for those fiscal years, respectively. Revenue derived from sales of frozen meat products accounted for approximately 4.96% and approximately 3.06% of the total revenue for those fiscal years, respectively.

Key Factors Affecting our Results of Operations

Our business and results of operations are affected by a number of general factors that impact our industry, including, among others, economic, political and social conditions in mainland China, any increase in customer demand for our products, raw material costs, and the competitive environment. Unfavorable changes in any of these general factors could adversely affect demand for our products and materially and adversely affect our results of operations.

While our business is influenced by these general factors, our results of operations are more directly affected by the following company-specific factors.

Our Ability to Increase Awareness of our Brands and Develop Customer Loyalty

We, through the operating subsidiaries, have a long-standing track record in China’s meat processing market and have established brand recognition under the “Wing Yip” (“荣业”) brand. Our brands are integral to our sales and marketing efforts. We believe that maintaining and enhancing our brand name recognition in a cost-effective manner is critical to elevating acceptance of our current and future products and increasing our customer base. Successful promotion of our brand names will depend largely on our marketing efforts and ability to provide reliable and quality products at competitive prices. Brand promotion activities may not necessarily yield increased revenue, and even if they do, any increased revenue may not offset the expenses we may incur in marketing activities. If we fail to successfully promote and maintain our brands, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brands, we may fail to attract new customers or retain our existing customers, in which case, our business, operating results and financial condition could be materially adversely affected.

Our Ability to Attract Additional Dealers and Expand our Dealer Network

We, through the operating subsidiaries, sell our products through a network of distributors, many of whom also sell products of our competitors. Our business is therefore affected by our ability to establish new relationships with potential distributors and maintain relationships with existing distributors. The geographic coverage of our distributors and their individual business conditions can affect the ability of our distributors to sell our products to end customers. There may be consolidation and changes in the distribution landscape over time which could affect the performance of our existing distributors. Thus, if we are unable to maintain business relationship with our existing distributors or recruit more reputable and qualified distributors, our results of operations may be adversely and materially impacted. If we are unable to renew our contracts with our largest distributor or re-negotiate an agreement under the same or more advantageous terms, our sales and results of operations could be adversely affected. If our marketing efforts fail to elevate acceptance of our products among distributors, we may find it difficult to maintain the existing level of sales or to increase such sales.

Fluctuations in Ingredient Materials, Supplies and Prices

Supplies and prices of the various ingredient materials that are used to prepare the operating subsidiaries’ meat products (including pork, chicken and duck) can be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics, and economics factors, and such prices may fluctuate. An increase in pricing of any ingredient that is used in the operating subsidiaries’ meat products could result in an increase in costs from their suppliers, and the operating subsidiaries may not be able to increase prices to cover increased costs which would have an adverse effect on their operating results and profitability.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic has caused volatility in the global economy and resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of the virus. However, as a whole, our business and operations have not been affected by the pandemic-related lockdowns in China during the COVID-19 pandemic. As food is a key staple commodity, and our products have a relatively long shelf life and are easily stored because of vacuum packaging, demands for our products, including cured meat products, snack products and frozen meat products, remained strong in China during the COVID-19 pandemic, and we have not experienced a decline in consumer demand for our products in China. In addition, our operating subsidiaries employ multiple sales channels, with the channels of supermarkets and online sales experiencing growth during the COVID-19 pandemic.

The impact of the COVID-19 pandemic on our business going forward will depend on a range of factors which we are not able to accurately predict, including the duration and scope of the pandemic, a repeat of the spike in the number of COVID-19 cases, the geographies impacted, the impact of the pandemic on economic activity and the nature and severity of measures adopted by governments, including restrictions on travel, mandates to avoid large gatherings and orders to self-quarantine or shelter in place. The COVID-19 pandemic has also led to sharp reductions in global growth rates and the ultimate impact on the global economy remains uncertain. Accordingly, the COVID-19 pandemic may have significant negative impacts in the medium and long term, including on our business, financial condition, results of operations, cash flows and prospects.

Key Components of Results of Operations for the Six Months Ended June 30, 2023 and 2022

Net Revenues

Our revenue is reported net of all value added taxes (“VAT”). We derived revenue primarily from sales of cured meat products, snack products and frozen meat products.

The following table sets forth the breakdown of our revenues by category for the periods indicated.

Compared with net revenue for the six months ended June 30, 2022, our net revenue increased by $0.41 million, or 0.63%, for the six months ended June 30, 2023, which was primarily attributable to a $0.23 million increase in sales of cured meat products and a $0.32 million increase in sales of frozen meat products, partially offset by a $0.13 million decrease in sales of snack products.

Revenue from sales of cured meat products increased by $0.23 million, to $44.37 million for the six months ended June 30, 2023 from $44.14 million for the six months ended June 30, 2022. For the six months ended June 30, 2023, the sales volume of cured pork sausages, cured pork meat and other cured meat products was 3,871 tons, 908 tons and 960 tons, respectively. For the six months ended June 30, 2022, the sales volume of cured pork sausages, cured pork meat and other cured meat products was 3,546 tons, 863 tons and 1,028 tons, respectively. The increase in revenue was primarily due to i) the increase in sales volume from 5,438 tons for the six months ended June 30, 2022 to 5,739 tons for the six months ended June 30, 2023, mainly attributable to an increase in sales orders from customers, which contributed to an increase of $2.44 million in revenue, and ii) an increase in the average unit sales price from $7.59 per kilogram for the six months ended June 30, 2022 to $7.73 per kilogram for the six months ended June 30, 2023, which resulted in an increase of $0.86 million in revenue. The increase in revenue was partially offset by an increase of the currency exchange rates applied to statements of operations from RMB6.4791 to $1.00 for the six months ended June 30, 2022 to RMB6.9283 to $1.00 for the six months ended June 30, 2023, which resulted in a decrease of $3.07 million in revenue.

Revenue from sales of snack products decreased by $0.13 million, to $18.23 million for the six months ended June 30, 2023 from $18.36 million for the six months ended June 30, 2022. The decrease was mainly due to i) an increase of the currency exchange rates applied to statements of operations from RMB6.4791 to $1.00 for the six months ended June 30, 2022 to RMB6.9283 to $1.00 for the six months ended June 30, 2023, which resulted in a decrease of $1.26 million in revenue, ii) a decrease in the average unit sales price from $8.12 per kilogram for the six months ended June 30, 2022 to $7.89 per kilogram for the six months ended June 30, 2023, which resulted in a decrease of $0.58 million in revenue. The decrease in revenue was partially offset by an increase of the sales volume of snack products from 2,114 tons for the six months ended June 30, 2022 to 2,310 tons for the six months ended June 30, 2023, which resulted in an increase of $1.71 million in revenue.

Revenue from sales of frozen meat products increased by $0.32 million, to $3.36 million for the six months ended June 30, 2023 from $3.04 million for the six months ended June 30, 2022. The increase was mainly due to the increase of sales volume and unit price. The sales volume of frozen meat products increased from 579 tons for the six months ended June 30, 2022 to 664 tons for the six months ended June 30, 2023. The increase in sales volume resulted in an increase of $0.45 million in revenue. In addition, the increase was attributable to the increase in the average unit sales price from $4.91 per kilogram for the six months ended June 30, 2022 to $5.06 per kilogram for the six months ended June 30, 2023, which resulted in an increase of $0.11 million in revenue. The increase in revenue was partially offset by an increase of the currency exchange rates applied to statements of operations from RMB6.4791 to $1.00 for the six months ended June 30, 2022 to RMB6.9283 to $1.00 for the six months ended June 30, 2023, which resulted in a decrease of $0.24 million in revenue.

Cost of Revenues

Our cost of revenue consists primarily of (i) cost of materials purchased from suppliers, (ii) sales taxes and additional taxes, (iii) depreciation expenses of the equipment, and (iv) amortization of land use rights.

Our cost of revenue increased by $2.57 million, or 6.20% from $41.41 million for the six months ended June 30, 2022 to $43.97 million for the six months ended June 30, 2023, which was primarily attributable to an increase in sales volume resulting in an increase of costs accordingly, an increase of raw material of pork prices, and the increased depreciation expenses of equipment.

Cost of revenue of cured meat products increased by $2.39 million, to $30.18 million for the six months ended June 30, 2023 from $27.79 million for the six months ended June 30, 2022. The increase was primarily due to the increase in sales volume as discussed above, which resulted in an increase of $1.43 million in cost of revenue. The increase of cost of revenue of cured meat products was also due to the increase of raw material of pork prices from $2.51 per kilogram for the six months ended June 30, 2022 to $2.8 per kilogram for the six months ended June 30, 2023, which caused an increase of $2.30 million in the cost of revenue. In addition, the increase in depreciation expenses of equipment resulted in an increase in cost of revenue of $0.75 million. The increase was partially offset by the decrease

in the exchange rate average translation rates applied to statements of operations from RMB6.4791 to $1.00 for the six months ended June 30, 2022 to RMB6.9283 to $1.00 for the six months ended June 30, 2023, which caused a decrease of $2.09 million in the cost of revenue.

Cost of revenue of snack products increased by $0.05 million, to $11.86 million for the six months ended June 30, 2023 from $11.81 million for the six months ended June 30, 2022. The increase was primarily due to the increase in sales volume as discussed above, which resulted in an increase of $1.02 million in the cost of revenue. In addition, the increase in depreciation expenses of equipment resulted in an increase in cost of revenue of $0.29 million. The increase was partially offset by i) the decrease in unit cost from $5.23 per kilogram for the six months ended June 30, 2022 to $5.13 per kilogram for the six months ended June 30, 2023, which caused a decrease of $0.43 million in the cost of revenue, and ii) the decrease in the exchange rate average translation rates applied to statements of operations from RMB6.4791 to $1.00 for the six months ended June 30, 2022 to RMB6.9283 to $1.00 for the six months ended June 30, 2023, which caused a decrease of $0.83 million in the cost of revenue.

Cost of revenue of frozen meat products increased by $0.13 million, to $1.93 million for the six months ended June 30, 2023 from $1.80 million for the six months ended June 30, 2022. The increase was primarily due to the increase in sales volume as discussed above, which resulted in an increase of $0.24 million in the cost of revenue. In addition, the increase in depreciation expenses of equipment resulted in an increase in cost of revenue of $0.04 million. The increase was partially offset by the decrease in the exchange rate average translation rates applied to statements of operations from RMB6.4791 to $1.00 for the six months ended June 30, 2022 to RMB6.9283 to $1.00 for the six months ended June 30, 2023, which caused a decrease of $0.15 million in the cost of revenue.

Gross profit and gross profit margin

Gross profit represents our revenue less cost of revenues. Our gross profit margin represents our gross profit as a percentage of our revenue. For the six months ended June 30, 2023 and 2022, our gross profit was $21.98 million and $24.14 million, respectively, and our gross profit margin was 33.33% and 36.83%, respectively.

The following table sets forth our gross profit and gross profit margin by sales category for the periods indicated.

Compared with gross profit for the six months ended June 30, 2022, our gross profit decreased by $2.15 million, or 8.93%, for the six months ended June 30, 2023, and the gross profit margin decreased from 36.83% to 33.33%, mainly due to a $2.16 million decrease in gross profit for sales of cured meat products, a $0.18 million decrease in gross profit for sales of snack products, and partially offset by a $0.19 million increase in gross profit for sales of frozen meat products. Our gross profit and gross profit margin are primarily affected by sales price we charged to our customers and our cost of revenues.

Operating expenses

The following table sets forth the breakdown of our operating expenses for the six months ended June 30, 2023 and 2022.

Selling expenses

Selling expenses mainly include (i) advertising costs, (ii) salaries and commissions of sales and marketing staff, (iii) transportation fees and delivery fees for e-commerce platforms, (iv) space occupancy expenses, such as counters in supermarkets, and (v) service fees for e-commerce platforms such as Tiktok, JD.com, and Pinduoduo.

Our selling expenses decreased by 19.69% from $9.10 million for the six months ended June 30, 2022 to $7.31 million for the six months ended June 30, 2023, mainly attributable to the decrease in advertising costs of $1.56 million. Due to the resurgence of the COVID-19 pandemic in China at the end of 2022, we adopted a more targeted method of advertising and reduced the expenses in community advertising in the six months ended June 30, 2023.

General and administrative expenses

General and administrative expenses mainly consist of (i) salaries, welfare and insurance expenses for our administrative personnel, (ii) depreciations and amortizations, (iii) lease expenses relating to leased properties used for administrative and factory purposes, (iv) entertainment expenses are used for business operation, and (v) others, which primarily include traveling, office expenses, and other miscellaneous expenses for administrative purposes.

Our general and administrative expenses increased by 13.94% from $1.84 million for the six months ended June 30, 2022 to $2.09 million for the six months ended June 30, 2023, which was primarily attributable to the $0.26 million office relocation expense incurred in the six months ended June 30, 2023.

Research and development expenses

Our research and development expenses primarily comprise costs of materials used for experiments, employee salary and welfare expenses, and depreciation expenses related to research and development activities.

Our research and develop expenses decreased by 22.84%, from $2.05 million for the six months ended June 30, 2022 to $1.58 million for the six months ended June 30, 2023, which was primarily attributable to a decreased investment in research and corresponding material consumption used for experiments, as we mainly focused on the research and development of prepared dishes from the second half year of 2022, before focusing on the research and development of frozen food. The research and development of prepared dishes consumes fewer raw materials.

Other income (expenses)

Other income (expenses) primarily consists of (i) government subsidies provided as incentives from mainland China local government to encourage the expansion of local business; (ii) interest income on bank deposits, interest expense on short-term bank borrowings, interest expense on lease liabilities, which is non-cash and calculated as the difference between lease payments and the net present value of the lease payment over the entire term of the lease; (iii) foreign exchange gains or losses; and (iv) loss on disposal of fixed assets.

Our total other expense increased from $1.95 million for the six months ended June 30, 2022 to $2.47 million for the six months ended June 30, 2023, primarily due to the completion of the new office building and disposal of the old office building.

Income tax expenses

Hong Kong

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. From year of assessment of 2018/2019 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000.

Mainland China

Generally, our subsidiaries that are considered mainland China resident enterprises under mainland China tax laws are subject to enterprise income tax on their worldwide taxable income as determined under mainland China tax laws and accounting standards at a rate of 25%.

In accordance with the implementation rules of the EIT Law, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity may re-apply for the HNTE certificate when the prior certificate expires. Our subsidiary, Wing Yip GD, qualified as a HNTE in 2019. Therefore, Wing Yip GD was eligible to enjoy a preferential tax rate of 15% for the years 2019, 2020, and 2021, to the extent it had taxable income under the EIT Law. For fiscal year 2022 and for the six months ended June 30, 2023, Wing Yip GD’s income tax rate was 25%, as it did not re-apply for the HNTE certificate by the end of December 2022, and cannot enjoy such tax incentives starting in 2022. Wing Yip GD re-applied for the HNTE certificate in September 2023. As of the date of this prospectus, such application is still under review by relevant government authority.

Our income tax expense decreased from $2.34 million for the six months ended June 30, 2022 to $2.31 million for the six months ended June 30, 2023.

Net income

As a result of the foregoing, our net income decreased by 9.32%, from net income of $6.86 million for the six months ended June 30, 2022 to $6.22 million for the six months ended June 30, 2023.

Key Components of Results of Operations for the Years Ended December 31, 2022 and 2021

The following table sets forth a summary of our consolidated results of operations for the years indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this prospectus. The operating results in any year are not necessarily indicative of the results that may be expected for any future period.

Net Revenues

Our revenue is reported net of all VAT. We derived revenue primarily from sales of cured meat products, snack products and frozen meat products.

The following table sets forth the breakdown of our revenues by category for the periods indicated.

Compared with net revenue for the fiscal year ended December 31, 2021, our net revenue decreased by $3.24 million, or 2.42%, for the fiscal year ended December 31, 2022, which was primarily attributable to a $7.10 million decrease in sales of cured meat products, a $1.48 million increase in sales of snack products, and a $2.39 million increase in sales of frozen meat products, mainly due to increased promotion of snack products and frozen meat products by direct stores and e-commerce, while the demand for traditional cured meat products has declined.

Revenue from sales of cured meat products decreased by $7.11 million, to $88.39 million for the fiscal year ended December 31, 2022 from $95.50 million for the fiscal year ended December 31, 2021, which was primarily due to an increase of the currency exchange rates applied to statements of operations from RMB6.4508 to $1.00 for the fiscal year ended December 31, 2021 to RMB6.7290 to $1.00 for the fiscal year ended December 31, 2022, resulting in a decrease of $3.81 million in revenue. In addition, the decrease in revenue was due to the decrease in the average unit sales price from $8.10 per kilogram for the fiscal year ended December 31, 2021 to $7.65 per kilogram for the fiscal year ended December 31, 2022, which resulted in a decrease of $5.27 million in revenue. The decrease in revenue from sales of cured meat products was partially offset by an increase of $1.97 million in revenue, primarily due to the increase in sales volume from 11,305 tons for the fiscal year ended December 31, 2021 to 11,562 tons for the fiscal year ended December 31, 2022.

Revenue from sales of snack products increased by $1.47 million, to $35.90 million for the fiscal year ended December 31, 2022 from $34.43 million for the fiscal year ended December 31, 2021. The sales volume of snack products increased from 3,664 tons for the fiscal year ended December 31, 2021 to 4,517 tons for the fiscal year ended December 31, 2022. The increase in sales volume resulted in an increase of $8.01 million in revenue. The increase was partially offset by the decrease in the exchange rate average translation rates applied to statements of operations from RMB6.4508 to $1.00 for the fiscal year ended December 31, 2021 to RMB6.7290 to $1.00 for the fiscal year ended December 31, 2022, which caused a decrease of $1.55 million in the cost of revenue. In addition, the increase was partially offset by the decrease in the average unit sales price from $9.01 per kilogram for the fiscal year ended December 31, 2021 to $7.95 per kilogram for the fiscal year ended December 31, 2022, which resulted in a decrease of $4.99 million in revenue.

Revenue from sales of frozen meat products increased by $2.39 million, to $6.49 million for the fiscal year ended December 31, 2022 from $4.10 million for the fiscal year ended December 31, 2021. The sales volume of frozen meat products increased from 714 tons for the fiscal year ended December 31, 2021 to 1,276 tons for the fiscal year ended December 31, 2022. The increase in sales volume resulted in an increase of $3.23 million in revenue. The increase was partially offset by the decrease in the exchange rate average translation rates applied to statements of operations from RMB6.4508 to $1.00 for the fiscal year ended December 31, 2021 to RMB6.7290 to $1.00 for the fiscal year ended December 31, 2022, which caused a decrease of $0.28 million in the cost of revenue. In addition, the increase was partially offset by the decrease in the average unit sales price from $5.51 per kilogram for the fiscal year ended December 31, 2021 to $5.09 per kilogram for the fiscal year ended December 31, 2022, which resulted in an decrease of $0.56 million in revenue.

Cost of Revenues

Our cost of revenue consists primarily of (i) cost of materials purchased from suppliers, (ii) sales taxes and additional taxes, and (iii) depreciation expenses of the equipment.

Our cost of revenue increased by 2.08% from $84.68 million for the fiscal year ended December 31, 2021 to $86.44 million for the year ended December 31, 2022, which was primarily attributable to an increase of sales volume resulting in an increase of costs accordingly.

Cost of revenue of cured meat products decreased by $2.67 million, to $59.21 million for the fiscal year ended December 31, 2022 from $61.88 million for the fiscal year ended December 31, 2021. The decrease was mainly due to i) the decrease in the exchange rate average translation rates applied to statements of operations from RMB6.4508 to $1.00 for the fiscal year ended December 31, 2021 to RMB6.7290 to $1.00 for the fiscal year ended December 31, 2022, which caused a decrease of $2.55 million in cost of revenue, and ii) an decrease of the unit cost from $5.23 per kilogram for the fiscal year ended December 31, 2021 to $5.12 per kilogram for the fiscal year ended December 31, 2022, which caused a decrease of $1.53 million in cost of revenue. The decrease was partially offset by the increase in sales volume as discussed above, which resulted in an increase of $1.41 million in cost of revenue.

Cost of revenue of snack products increased by $2.92 million, to $23.39 million for the fiscal year ended December 31, 2022 from $20.47 million for the fiscal year ended December 31, 2021. The increase was primarily due to the increase in sales volume as discussed above, which resulted in an increase of $4.77million in cost of revenue. The increase was partially offset by the decrease in the exchange rate average translation rates applied to statements of operations from RMB6.4508 to $1.00 for the fiscal year ended December 31, 2021 to RMB6.7290 to $1.00 for the fiscal year ended

December 31, 2022, which caused a decrease of $1.01 million in cost of revenue. In addition, the increase was partially offset by the unit cost from $5.36 per kilogram for the fiscal year ended December 31, 2021 to $5.18 per kilogram for the fiscal year ended December 31, 2022, which caused a decrease of $0.84 million in cost of revenue.

Cost of revenue of frozen meat products increased by $1.51 million, to $3.84 million for the fiscal year ended December 31, 2022 from $2.33 million for the fiscal year ended December 31, 2021. The increase was primarily due to the increase in sales volume as discussed above, which resulted in an increase of $1.77 million in cost of revenue. The increase was partially offset by the decrease in the exchange rate average translation rates applied to statements of operations from RMB6.4508 to $1.00 for the fiscal year ended December 31,2021 to RMB6.7290 to $1.00 for the fiscal year ended December 31,2022, which caused a decrease of $0.15 million in cost of revenue. In addition, the increase was partially offset by the unit cost from $3.27 per kilogram for the fiscal year ended December 31, 2021 to $3.14 per kilogram for the fiscal year ended December 31, 2022, which caused a decrease of $0.11 million in cost of revenue.

Gross profit and gross profit margin

Gross profit represents our revenue less cost of revenues. Our gross profit margin represents our gross profit as a percentage of our revenue. For the fiscal years ended December 31, 2022 and 2021, our gross profit was $44.34 million and $49.35 million, respectively, and our gross profit margins were 33.91% and 36.82%, respectively.

The following table sets forth our gross profit and gross profit margin by sales category for the periods indicated.

Compared with gross profit for the fiscal year ended December 31, 2021, our gross profit decreased by $5.01 million, or 10.15%, for the fiscal year ended December 31, 2022, and the gross profit margin decreased from 36.82% to 33.91%, mainly due to a $4.44 million decrease in gross profit for sales of cured meat products, a $1.44 million decrease in gross profit for sales of snack products, and a $0.88 million increase in gross profit for sales of frozen meat products. Our gross profit and gross profit margin are primarily affected by sales price we charged to our customers and our cost of revenues.

Operating expenses

The following table sets forth the breakdown of our operating expenses for the fiscal years ended December 31, 2022 and 2021.

Selling expenses

Selling expenses mainly include (i) advertising costs, (ii) salaries and commissions of sales and marketing staff, (iii) transportation fees and delivery fees for e-commerce platforms, (iv) space occupancy expenses, such as counters in supermarkets, and (v) service fees for e-commerce platforms such as Tiktok, JD.com, and Pinduoduo.

Our selling expenses decreased by 1.63%, from $20.02 million for the fiscal year ended December 31, 2021 to $19.69 million for the year ended December 31, 2022. The decrease was mainly due to (i) a decrease in currency exchange rates of $0.85 million; and (ii) an increase in advertising costs of $0.51 million.

General and administrative expenses

General and administrative expenses mainly consist of (i) salaries, welfare and insurance expenses for our administrative personnel; (ii) depreciations and amortizations; (iii) lease expenses relating to leased properties used for administrative and factory purposes; (iv) entertainment expenses used for business operation; and (v) others, which primarily include traveling, office expenses, and other miscellaneous expenses for administrative purposes.

Our general and administrative expenses decreased by 21.34%, from $5.09 million for the fiscal year ended December 31, 2021 to $4.01 million for the fiscal year ended December 31, 2022, which was primarily attributable to (i) a decrease in currency exchange rates of $0.17 million; (ii) a decrease of professional service fees relating to our planned public listing in Hong Kong in 2021 of $1.22 million; and (iii) an increase of depreciation expenses of $0.40 million due to an increase in our fixed assets.

Research and development expenses

Our research and development expenses primarily comprise costs of materials used for experiments, employee salary and welfare expenses, and depreciation expenses related to research and development activities.

Our research and development expenses decreased by 18.04%, from $5.01 million for the year ended December 31, 2021 to $4.11 million for the year ended December 31, 2022, which was primarily attributable to a decreased investment in research and corresponding material consumption used for experiments, as we mainly focused on the research and development of frozen food in 2021 and focus on prepared dishes in 2022.The research and development of prepared dishes consumes less raw materials.

Other income (expenses)

Other income (expenses) primarily consists of (i) government subsidies provided as incentives from mainland China local government to encourage the expansion of local business; (ii) interest income on bank deposits, interest expense on short-term bank borrowings, interest expense on lease liabilities, which is non-cash and calculated as the difference between lease payments and the net present value of the lease payment over the entire term of the lease; (iii) foreign exchange gains or losses; and (iv) loss on disposal of fixed assets.

Our total other expenses increased from $0.59 million for the fiscal year ended December 31, 2021 to $1.53 million of other income for the year ended December 31, 2022, primarily due to the completion of the new office building and disposal of the old office building of $1.66 million.

Income tax expenses

Hong Kong

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. From year of assessment of 2018/2019 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000.

Mainland China

Generally, subsidiaries that are considered mainland China resident enterprises under mainland China tax laws are subject to enterprise income tax on their worldwide taxable income as determined under mainland China tax laws and accounting standards at a rate of 25%.

In accordance with the implementation rules of the EIT Law, a qualified HNTE is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity may re-apply for the HNTE certificate when the prior certificate expires. Our subsidiary, Wing Yip GD, was qualified as a HNTE in 2019. Therefore, Wing Yip GD was eligible to enjoy a preferential tax rate of 15% for years 2019, 2020, and 2021, to the extent it had taxable income under the EIT Law. For fiscal year 2022 and for the six months ended June 30, 2023, Wing Yip GD’s income tax rate was 25%, as it did not re-apply for the HNTE certificate by the end of December 2022, and cannot enjoy such tax incentives starting in 2022. Wing Yip GD re-applied for the HNTE certificate in September 2023. As of the date of this prospectus, such application is still under review by relevant government authority.

Our income tax expense increased from $3.26 million for the fiscal year ended December 31, 2021 to $3.81 million for the year ended December 31, 2022, mainly due to the income tax rate was 25% of Wing Yip GD in 2022 and was not eligible to enjoy a preferential tax rate of 15%.

Net income

As a result of the foregoing, our net income decreased by 32.43%, from net income of $16.57 million for the fiscal year ended December 31, 2021 to $11.19 million for the fiscal year ended December 31, 2022.

Liquidity and Capital Resources

As of June 30, 2023, we had $78.35 million in cash, compared to $83.83 million as of June 30, 2022. We had $67.39 million in cash as of December 31, 2022, compared to $76.76 million as of December 31, 2021. Our cash primarily consists of cash in bank. Our principal source of cash came from our operations and bank loans. Most of our cash resources were used to pay for the procurement of raw materials, purchase of equipment and property, payroll and operating expenses. Currently, we are working to improve our liquidity and capital sources primarily through cash flows from operations, debt financing, and financial support from the principal shareholder or external investors. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our shareholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that could restrict our operations. There can be no assurances that we will be able to raise additional capital. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.

Indebtedness.    As of June 30, 2023, we have loans of $20.43 million. Beside these loans, we did not have any debts, finance leases or purchase commitments, guarantees or other material contingent liabilities.

Off-Balance Sheet Arrangements.    We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that we provide financing, liquidity, market risk or credit support to or engages in hedging or research and development services with us.

Capital Resources.    The primary drivers and material factors impacting our liquidity and capital resources include our ability to generate sufficient cash flows from our operations and renew commercial bank loans, as well as proceeds from equity and debt financing, to ensure our future growth and expansion plans.

Working Capital.    Total working capital as of June 30, 2023 amounted to $78.09 million, compared to $70.04 million as of June 30, 2022. Total working capital as of December 31, 2022 amounted to $67.22 million, compared to $64.82 million as of December 31, 2021.

Capital Needs.    Our capital needs include our daily working capital needs and capital needs to finance the expansion of our business. Our management believes that income generated from our current operations can satisfy our daily working capital needs over the next 12 months. We may also raise additional capital through public offerings or private placements to finance our business development and to consummate any merger or acquisition, if necessary.

Cash Flows

For the Six Months Ended June 30, 2023 and 2022

The following table sets forth a summary of our cash flows for the periods indicated:

Operating activities

For the six months ended June 30, 2023, our net cash provided by operating activities was $10.70 million, which was primarily attributable to (i) depreciation and disposal loss of property and equipment of $2.25 million and $2.05 million; (ii) an increase in inventories of $1.76 million, which was due to the expansion of production scale and the increase of raw material cost; (iii) a decrease in prepaid expenses and other current assets of $2.93 million, which was mainly due to the decrease of new factory installation expenses and the decrease of prepaid rental expense; and (iv) an increase in accounts receivable of $2.72 million, which was mainly due to the addition of new customers and increased revenue.

For the six months ended June 30, 2022, our net cash provided by operating activities was $10.37 million, which was primarily attributable to (i) disposal of property and equipment of $1.74 million; (ii) a decrease in prepaid expenses and other current assets of $1.40 million, which was mainly due to the decrease of prepaid rental expenses; (iii) a decrease in accounts payable of $5.96 million, which was mainly due to the payment to suppliers; and (iv) a decrease in accounts receivable of $2.37 million as a result of collections; and (v) a decrease in inventories of $3.08 million, due to a decrease in raw materials. In order to ensure the stability of production at the end of the year, the Company increased the purchase of raw material in the fourth quarter of 2021 and used such inventory in 2022.

Investing activities

For the six months ended June 30, 2023 and 2022, our net cash used in investing activities was $4 thousand and $4.23 million, respectively, which was attributable to the purchase of property and equipment.

Financing activities

For the six months ended June 30, 2023, our net cash provided by financing activities was $3.88 million, which was attributable to the proceeds received from short-term loans which amount to $1.10 million and the proceeds received from long-term loans which amount to $4.14 million, as offset by repayment of long-term loans in the amount of $1.31 million and the deferred offering cost which amount to $50 thousand.

For the six months ended June 30, 2022, our net cash provided by financing activities was $1.27 million, which was attributable to the proceeds received from short-term loans which amount to $6.99 million, as offset by repayment of short-term loans in the amount of $0.04 million and repayment of long-term loans in the amount of $5.69 million.

For the Fiscal Years Ended December 31, 2022 and 2021

The following table sets forth a summary of our cash flows for the periods indicated:

Operating activities

For the year fiscal ended December 31, 2022, our net cash provided by operating activities was $8.92 million, which was primarily attributable to (i) depreciation and disposal loss of property and equipment of $1.35 million and $1.67 million; (ii) an increase in inventories of $1.81 million, due to an increase in the purchase of raw materials by the Company in the fourth quarter of 2022; (iii) a decrease in accounts payable of $6.04 million, because the Company’s purchases for the fourth quarter of 2022 were concentrated in November 2022 and accounts payable were paid in December 2022; and (iv) a decrease in accounts receivable of $2.23 million, which was mainly due to an increase in new customers who paid a larger proportion of their invoices in the subsequent month, resulting reduced accounts receivable.

For the fiscal year ended December 31, 2021, our net cash provided by operating activities was $23.97 million, which was primarily attributable to (i) depreciation of property and equipment of $2.93 million; (ii) an increase in prepaid expenses for new offices decoration in 2021 and other current assets of $1.31 million; (iii) an increase in accounts payable of $3.36 million, due to an increase in the purchase of raw materials for new products at the end of 2021; and (iv) a decrease in accounts receivable of $1.55 million, due to an increase in collections from the Company’s e-commerce platform at the end of 2021.

Investing activities

For the fiscal year ended December 31, 2022, our net cash used in investing activities was $18.06 million, which was primarily attributable to the purchase of property and equipment of $18.01 million.

For the fiscal year ended December 31, 2021, our net cash used in investing activities was $27.60 million, which was primarily attributable to the purchase of property and equipment of $27.55 million.

Financing activities

For the fiscal year ended December 31, 2022, our net cash provided by financing activities was $5.83 million, which was attributable to the proceeds received from short-term loans which amount to $9.96 million and the proceeds received from long-term loans which amount to $11.60 million, as offset by repayment of short-term loans in the aggregate principal amount of $15.73 million.

For the fiscal year ended December 31, 2021, our net cash provided by financing activities was $3.15 million, which attributable to the proceeds received from short-term loans amount to $11.81 million and the proceeds received from long-term loans amount to $1.37 million, as offset by repayment of short-term loans of $8.63 million and repayment of long-term loans of $0.95 million.

Contractual obligation

The following table sets forth our contractual obligations as of June 30, 2023:

____________

(1)      As of June 30, 2023, we had outstanding loans of $20.43 million (see Note 11 of the notes to consolidated financial statements for details).

(2)      As of June 30, 2023, we had operating lease commitment of $0.28 million (see Note 9 of the notes to consolidated financial statements for details).

Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of June 30, 2023.

The following table sets forth our contractual obligations as of December 31, 2022:

____________

(1)      As of December 31, 2022, we had outstanding loans of $17.09 million (see Note 11 of the notes to consolidated financial statements for details).

(2)      As of December 31, 2022, we had operating lease commitment of $0.4 million (see Note 9 of the notes to consolidated financial statements for details).

Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2022.

Trend Information

Other than as disclosed elsewhere in this prospectus, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our net revenue, 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.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of June 30, 2023 and December 31, 2022.

Inflation

Inflation does not materially affect our business or the results of our operations.

Seasonality

We have not experienced, and do not expect to experience, any seasonal fluctuations in our results of operations for our business.

contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligation. VAT that we collect concurrent with revenue-producing activities is excluded from revenue.

We follow the requirements of Topic 606-10-55-36 through -40, Revenue from Contracts with Customers, Principal Agent Considerations, in determining the gross versus net revenue recognition for performance obligation(s) in the contract with a customer. Revenue recorded with us acting in the capacity of a principal is reported on a gross basis equal to the full amount of consideration to which we expect in exchange for the good or service transferred. Revenue recorded with us acting in the capacity of an agent is reported on a net basis, exclusive of any consideration provided to the principal party in the transaction.

The principal versus agent evaluation is a matter of judgment that depends on the facts and circumstances of the arrangement and is dependent on whether we control the good or service before it is transferred to the customer or whether we are acting as an agent of a third party. This evaluation is performed separately for each performance obligation identified. For the six months ended June 30, 2023, and the fiscal years ended December 31, 2022 and 2021, there was no revenue recognized on a net basis where we are acting as an agent.

For the six months ended June 30, 2023, and the fiscal years ended December 31, 2022 and 2021, our revenues were primarily derived from (i) sales of products through offline, including sales of cured meat products, snack products and frozen meat products to distributors, and sales of cured meat products and snack products in stores, and (ii) sales of cured meat products and snack products primarily through online platform such as Tiktok, JD.com, and Pinduoduo.

Revenue from sales of products through offline

We generate revenue from the sale of cured meat products, snack products and frozen meat products to customers. We enter into contracts with customers as a principal. The contracts contain one single performance obligation with standard quality guarantee, which is transferring the products or accessories to their customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. Usually, we offer a credit term within 30-90 days for business customers. We recognize revenue at a point in time when the control of the products has been transferred to customers. The transfer of control is considered complete when products have been accepted and received by customers. In the normal course of business, our products are sold with no right of return unless the item is defective.

Revenue from sales of products through online platforms

In accordance with ASC 606, the Group, as a principal, obtains control of specified goods or services before they are transferred to the customers, fulfils the promise to provide the specified products to customer, bears the risk of loss due to factors including physical damage, obsolescence, expired, etc. either before the specified products has been sold to the customers or upon return and, and determines the selling price for each product at its sole discretion. Therefore, the revenues should be recognized in the gross amount of consideration to which it expects to be entitled in exchange for the specified products transferred.

The Group recognizes the revenue net of discounts and return allowances when the products are delivered, and the title is passed to customers. For sale of products through the online platform, we estimate the possibility of return based on the historical experience. As of June 30, 2023, and as of December 31, 2022 and 2021, liabilities for return allowance were not material to the consolidated financial statements.

Disaggregation of Revenues

We disaggregate our revenue from contracts by product types, as we believe it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. Our disaggregation of revenue for the six months ended June 30, 2023 and for the fiscal years ended December 31, 2022 and 2021 are disclosed in Note 2 of the accompanying consolidation financial statements.

INDUSTRY

All the information and data presented in this section have been derived from the Frost & Sullivan (Beijing) Inc., Shanghai Branch Co. (Frost & Sullivan) industry report commissioned by us in October 2023 (the “Frost & Sullivan Report”) unless otherwise noted. Frost & Sullivan has advised us that the statistical and graphical information contained herein is drawn from its database and other sources. The following discussion contains projections for future growth, which may not occur at the rates that are projected or at all.

OVERVIEW OF PRESERVED AND CURED MEAT PRODUCT MARKET IN MAINLAND CHINA

Definition and Classification of Preserved and Cured Meat Products

Preserved and cured meat products (腌腊味制品) are non-instant meat products made using fresh or frozen meat of livestock, with or without auxiliary materials such as salt, sugar, liquor and other seasonings added and by processing with techniques such as preserving, drying (or sun- or air-drying) and smoking. According to Ministry of Agriculture of the PRC, preserved and cured meat products include cured meat (including cured sausage), ham, non-instant sausage and slated meat.

Cured meat products can be classified in terms of the main ingredient used, which mainly include cured sausage (腊肠), cured meat (腊肉), cured poultry (腊禽), and cured fish (腊鱼). In terms of flavor, cured meat products can be principally classified into Cantonese-style (aroma flavor), Sichuan-style (hot and numbing flavor), Hunan-style (spicy and smoky flavor), Zhejiang-style (delicate flavor) cured meat products, etc.

Value Chain of the Preserved and Cured Meat Product Industry in Mainland China

The value chain of the preserved and cured meat product market in mainland China includes upstream raw material suppliers, midstream preserved and cured meat products manufacturing, processing and distribution, and downstream customers. In the preserved and cured meat product market, the use of distributors and sub-distributors is a common practice in order to reach broader consumer base.

Value Chain of Preserved and Cured Meat Product Industry (Mainland China)

Source: Frost & Sullivan

Market Size and Growth of the Preserved and Cured Meat Product Industry in Mainland China

According to Frost & Sullivan, the preserved and cured meat product market in mainland China experienced stable development from 2018 to 2022, with its total retail sales value increasing from RMB36.8 billion to RMB52.9 billion, representing a CAGR of 9.5%. In the future, with the increasing price and customer base, the retail sales value of the preserved and cured meat product market is expected to reach RMB73.9 billion in 2027.

The retail sales value of the cured meat product market, which is a component of the preserved and cured meat product market, accounted for 18.5% of the total preserved and cured meat product market in 2022. Furthermore, within the preserved and cured meat product market, the CAGR of the cured meat product segment was the highest from 2018 to 2022. Cured meat products, with their diverse applications in various dining options and cooking methods, are projected to maintain a CAGR of 8.5% from 2022 to 2027, as indicated by Frost & Sullivan. This is attributed to the growing consumer demand for flavorful cuisine. Cantonese-style cured meat products account for the major part of the cured meat product market in mainland China, with more than 50% market share in terms of retail sales value in 2022. According to Frost & Sullivan, in the future, with the anticipated increase in per capita disposable income and purchasing power, coupled with the growing popularity of diversified snack meat products, the expanding catering service market, and the growing popularity of Cantonese-style cuisine, such as cured meat claypot rice (腊味煲仔饭), the retail sales value of the cured meat product market is expected to reach RMB 14.7 billion by 2027.

Market Size of Preserved and Cured Meat Product Market (Mainland China), 2018-2027E

Source: Frost & Sullivan

Market Drivers of the Preserved and Cured Meat Product Industry in Mainland China

According to Frost & Sullivan, the development of the preserved and cured meat product industry in China is primarily driven by the following factors:

•        Rising purchasing power and stable development of the catering service market:    As one of the integral food ingredients, preserved and cured meat products are usually used in Chinese cuisine and can be cooked both at home and in restaurants. Although impacted by the COVID-19 pandemic in 2020, the total revenue of the catering service market still increased from RMB4,271.6 billion in 2018 to RMB4,394.1 billion in 2022, with a CAGR of 0.7%. The stable development of the catering service market shows the sustained demand for dishes from consumers. Moreover, the increasing per capita disposable income has enhanced consumers’ purchasing power and promoted consumption upgrading, which drives the development of the preserved and cured meat product market in mainland China, according to Frost & Sullivan.

•        Rapid growth of online shopping:    According to Frost & Sullivan, except for traditional sales channels (KA channel, specialty channel, etc.), online channels are growing rapidly, benefiting from the development of e-commerce and the live-streaming market. Also, the popularity of mobile payments has made it a mainstream use for purchasers of food through e-commerce platforms and mobile live streaming platforms. Thanks to the rapid growth of online shopping, the preserved and cured meat product market in mainland China has experienced significant growth in recent years.

Raw Material Price of the Preserved and Cured Meat Product Industry in Mainland China

Pork is the main ingredient used in producing preserved and cured meat products and cured sausage accounts for the largest share among preserved and cured meat products. The price of pork is mainly determined by the price of pigs, which price is fluctuant because of the differences between supply and demand. In 2019, the average pork price rose rapidly in the face of a sharp decline in pig production due to African Swine Fever, as well as relatively stable downstream demand. In 2019, the average pork price reached RMB31.4 per kg. Entering 2020, the average pork price

fluctuated at a high level, with the average price of RMB47.9 per kg. From January 2021 to December 2021, the average pork price declined from RMB51.4 per kg to RMB25.7 per kg, because of the sufficient supply of pigs, which has benefited downstream manufacturers. Starting in 2022, the monthly average pig price recovered and increased to RMB30.2 per kilogram in December 2022. According to Frost & Sullivan, it is anticipated that future demand for pigs will be sustained in the PRC and the pig supply will stabilize at a regular level, as the African Swine Fever’s impact diminishes, and it is further expected that the average market price of pork is predicted to show greater stability than in previous years.

Average Market Price of Pork (Mainland China), January 2018-December 2022

Source: Ministry of Agriculture

Market Trends of the Preserved and Cured Meat Product Industry in Mainland China

•        Food safety enhancement:    In recent years, the PRC government has issued a series of laws and regulations to strengthen food safety supervision and regulate the healthy development of the food industry in mainland China, covering raw material ingredients, food production and processing, distribution channels and other aspects. The preserved and cured meat product industry as a whole has the responsibility to accelerate the implementation of industry standards, by establishing stricter production and processing quality control standards, in order to improve product quality and safety.

•        Development of innovative and healthy products:    Amid the consumption upgrade, consumers have cultivated higher demands for preserved and cured meat products on various flavor and cooking methods. In addition to paying attention to innovation, consumers also attach higher importance to the quality of raw materials and the health degree of preserved and cured meat products. According to Frost & Sullivan, future preserved and cured meat products processors will be likely to offer innovative products with new flavors and packaging, and also reduce additives which are unhealthy.

•        Sustained brand construction:    Brand building is key to sustaining the growth of product sales and profit in the competitive preserved and cured meat product market, according to Frost & Sullivan. Many major preserved and cured meat product brands that are well-recognized in mainland China tend to invest capital and resources into brand construction and promotion in order to win the recognition of the new generation of consumers.

Entry Barriers of the Preserved and Cured Meat Product Industry in Mainland China

•        Capital investment:    Traditional preserved meat products manufacturers and processors need to establish or lease factories for producing products, which have a significantly high requirement on the company’s capital capability. Moreover, preserved and cured meat products manufacturers and processors need to introduce advanced facilities as well as high-quality talents to build strict and comprehensive quality control systems, so as to maintain high quality of products, meet the industry standards and realize sustainable development, according to Frost & Sullivan. Therefore, it is important for new entrants to have sufficient capital support to ensure manufacturing, processing, packaging, transportation, marketing and human resources etc. For businesses that aspire to successfully achieve sizable scales and expand their layout all over the country, abundant capital is essential, and thus the capital investment sets a high barrier for the preserved and cured meat product market in mainland China.

•        Sales and distribution network:    According to Frost & Sullivan, the sales and distribution channel is extremely crucial for the preserved and cured meat products manufacturers and processors, which decides nationwide business layout and profit. Generally, building up comprehensive distribution channels requires the development of a strong relationship with an experienced sales team and mature dealers, which takes a long time to accumulate. Moreover, the entry barriers of modern retail channels, such as hypermarkets and supermarkets, become higher due to increased cost and fierce competition. In addition, e-commerce is rapidly evolving into “New Retail”, which offers a new shopping experience at the cutting-edge of technology without boundaries — merging online and offline commerce. Traditional preserved meat products manufacturers and processors have to be more proactive in managing and expanding sales and distribution channels and increasing product penetration so as to make the shopping experience more convenient.

•        Brand awareness and recognition:    Attracting new consumers and increasing the repeat purchase rate are both important. High-quality products and word of mouth can not only bring more consumers, but also build up impressive brand images. On the other hand, food safety is of particular importance to both regulators and consumers in mainland China. Conversely, if a preserved and cured meat products manufacturer sells contaminated products to the public, the confidence of the consumers will be seriously affected, which will in turn adversely affect its brand awareness and reputation.

Competitive Landscape of the Cured Meat Product Industry in Mainland China

In 2022, there were approximately hundreds of cured meat product processors in mainland China. The cured meat product market in mainland China is highly concentrated, with the top five processors accounting for 36.7% of the market share in terms of retail sales value in 2022.

Our Group ranked second in terms of retail sales value of cured meat products, with a market share of 9.2% in 2022.

Top Five Cured Meat Product Processors in terms of Retail Sales Value (Mainland China), 2022

____________

Note:

1.      Our Group’s data is based on our audited financial information for fiscal year 2022.

2.      Company A is a private cured meat product processor, founded in 2009. It principally provides agricultural foods and cured meat products.

3.      Company B is a listed preserved and cured meat product processor, the shares of which are listed on Shenzhen Stock Exchange, and was founded in 1988. It mainly provides meat products.

4.      Company C is a listed cured meat product processor, the shares of which are listed on the Shanghai Stock Exchange, and was founded in 1935. It principally operates restaurants and provides Chinese traditional snacks and cured meat products.

5.      Company D is a private cured meat product processor, and was founded in 2006. It principally provides cured meat products.

Source: Frost & Sullivan

Competitive Landscape of Cantonese-style Cured Meat Product Industry

Cantonese-style cured meat products accounted for over half of the market share in terms of retail sales value of the cured meat product market in mainland China in 2022. The Cantonese-style cured meat product market is relatively concentrated, with the top five processors accounting for 55.4% of market share in terms of retail sales value in 2022. The Company ranked second in terms of retail sales value of Cantonese-style cured meat products, with a market share of 17.9% in 2022.

Ranking and Market Share of Cantonese-style Cured Meat Product Market (Mainland China), 2022

____________

Note: Our Group’s data is based on our audited financial information for fiscal year 2022.

Source: Frost & Sullivan

OVERVIEW OF THE SNACK MEAT PRODUCT MARKET IN MAINLAND CHINA

Definition and Classification of Snack Meat Products

Snack food refers to packaged food products that are usually consumed and eaten between meals, which mainly includes (i) crispy snack foods, (ii) confectioneries, chocolates and preserves, (iii) biscuits, (iv) bread, cakes and pastries, (v) roasted seeds and nuts, (vi) seasoned flour products, (vii) snack meat and aquatic products, (viii) vegetable snacks, (ix) dried tofu snacks, and (x) other snack food such as jelly, etc.

Snack meat products are portable meat snacks made from pork, beef, and poultry, including ready-to-eat sausage, meat slices, jerky, meat floss, etc. Given snack meat products have characteristics of high protein and are easy to preserve, they have become an emerging segment in the snack food market, according to Frost & Sullivan.

Instant chicken products, as a sub-category of snack meat products, are rich in protein and nutrition with low fat, which is good for consumers’ fitness needs. Some manufacturers focus on producing instant chicken products with low fat and low sodium, which is very popular among health-conscious people, according to Frost & Sullivan.

Market Size and Growth of the Snack Meat Product Industry in Mainland China

In line with the growing consumption power of Chinese consumers, the retail sales value of the snack food market in mainland China increased from RMB714.7 billion in 2018 to RMB843.7 billion in 2022, representing a CAGR of 4.2%.

Impacted by the spread of COVID-19 pandemic in the first quarter of 2020, the growth rate slowed down in 2020 to 1.9%. However, the market recovered by the end of 2020, due to the strict control and prevention measures implemented by the Chinese government. The retail sales value of the snack food market is expected to increase at a CAGR of 7.6% from 2022 to 2027.

Market Size of Snack Food Market (Mainland China), 2018-2027E

Source: Frost & Sullivan

Given snack meat products are easy to preserve and adapt to various consumption scenarios (such as travel, outdoor activities, fitness, etc.), they have been popular among consumers over the past few years, according to Frost & Sullivan. The retail sales value of the snack meat product market increased from RMB55.3 billion in 2018 to RMB68.5 billion in 2022, representing a CAGR of 5.5%. In 2022, this segment accounted for approximately 8.1% of the total snack food market in 2022.

Frost & Sullivan projects that, the growing popularity of snack meat products, and food innovation and upgrading, the retail sales value of the snack meat product market is expected to grow at a CAGR of 8.3% from 2022 to 2027, reaching RMB101.9 billion in 2027.

Market Size of Snack Meat Product Market (Mainland China), 2018-2027E

Source: Frost & Sullivan

Market Drivers of the Snack Meat Product Industry in Mainland China

The development of the snack meat product industry in mainland China is primarily driven by the following factors:

•        The increase in population and per capita annual disposable income:    From 2018 to 2022, the total population in mainland China increased from 1,395.4 million to 1,411.8 million, with a CAGR of 0.3%. Per capita annual disposable income also experienced a rapid increase over 2018 to 2022. The per capita annual disposable income is expected to increase at a CAGR of approximately 6.3% from 2022 to 2027, reaching RMB50,141 in 2027. The increase in population and disposable income are expected to increase the consumption capacity of residents, and further drive the rapid growth of the snack meat product and instant chicken snack product industry, according to Frost & Sullivan.

•        The expansion of consumption scenarios and consumer premiumization:    Snack meat products and instant chicken snack products are expected to fulfill needs under different consumption scenarios, such as traveling, outdoor activities, fitness, etc. Furthermore, according to Frost & Sullivan, the evolution in consumer preferences towards upgraded consumption encourages individuals to seek foods that are of better quality and taste and of higher grade and greater attractiveness. Such demand is expected to aid in promoting the development of snack meat products and instant chicken snack products.

•        The development of new retail:    The development of new retail drives the further development of snack meat products and instant chicken snack products. Retail stores and hypermarkets are the main traditional channels for the sale of snack meat product. With the development of online consumption, new models such as live broadcast and social e-commerce are addressing the needs of consumers. Online-Merge-Offline promotes the transformation of snack meat products and instant chicken snack products from traditional sales channels to new retail, which is one of the main market drivers of the future industry development, according to Frost & Sullivan.

Market Trends of the Snack Meat Product Industry in Mainland China

•        Consumers’ rising health awareness:    According to Frost & Sullivan, as a result of consumers’ changing eating habits and rising health awareness, healthy, safe, low-fat, high-protein, and low-calorie features are more attractive to consumers when they choose snack meat products and instant chicken snack products. The market for instant chicken breast as one of the main foods in fitness meals that is expected to continue to expand in the future.

•        More diversified product categories:    Frost & Sullivan projects that snack meat products are expected to be more diversified, innovated and upgraded in the future. Snack meat products and instant chicken snack products that benefit the health of the elderly and emphasize nutrition strength for younger ages are expected to appear in the future. Snack meat products and instant chicken snack products with local characteristics and different flavors are expected to be produced.

OVERVIEW OF FROZEN MEAT PRODUCT MARKET IN MAINLAND CHINA

Definition and Classification of Frozen Meat Products

Frozen food, also known as quick-frozen food, is a kind of food produced by low-temperature rapid freezing. The freezing of quick-frozen food is a process that gradually penetrates into the center from the surface. After washing, blanching, and cooking the raw ingredients, they undergo rapid freezing in a low-temperature environment (below -33°C). Within 30 minutes, the temperature swiftly traverses the zone of maximum ice crystal formation (-1℃ to -11°C), leading to the precipitation of ice crystals in the aqueous solution within the food.

Frozen meat products refer to the frozen food using livestock meat and poultry meat as main ingredients, which have undergone the quick-freezing process and are to be sold in the market. Classified by the product type, frozen meat products can be divided into five categories: (i) frozen sausage; (ii) frozen meat ball; (iii) frozen meat skewer; (iv) frozen meat pie; and (v) others.

Market Size and Growth of the Frozen Meat Product Industry in Mainland China

The frozen meat product market in mainland China has witnessed a rapid growth from RMB21.4 billion in 2018 to RMB32.1 billion in 2022, representing a CAGR of 10.7% during the same period. Frost & Sullivan projects that, due to consumers’ preference for hot-pot and barbecue, as well as the rapid development of cold chain industry, the size of the frozen meat product market is expected to increase at a CAGR of 4.5% from 2022 to 2027.

BUSINESS

Overview

Through the operating subsidiaries in China, we are one of the notable meat product processing companies in China. According to the industry report produced by Frost & Sullivan, whom we commissioned in October 2023, in fiscal year 2022, based on retail sales of cured meat products in China, we ranked second with a market share of 9.2%. As of the date of this prospectus, our products are primarily marketed and sold across 18 provinces in mainland China through 7 self-operated stores, 72 distributors, including major retail outlets and supermarkets and 7 e-commerce platforms, including one platform owned by us.

The operating subsidiaries are primarily engaged in the processing, sales and distribution of i) cured meat products, including cured pork sausages, cured pork meat and other cured meat products, such as cured chicken, cured duck and cured fish; ii) snack products, including ready-to-eat sausages, jerky, duck necks, duck feet and claypot rice; and iii) frozen meat products, including frozen sausages, frozen beef patties and frozen chicken breast fillets.

We, through the operating subsidiaries, sell and market our products under our flagship brand “Wing Yip” (“荣业”), which can trace its history back to 1915, when our predecessor business began processing and selling cured sausages under the name “Wing Yip” (“荣业”). Since the commencement of operations through our subsidiary, Wing Yip GD in 2010, we have continuously developed our business and built our brand. In addition to “Wing Yip” (“荣业”), we have also developed the snack product brands “Jiangwang” (“匠王”) and “Kuangke” (“狂客”).

We, through the operating subsidiaries, focus on product development and are committed to improving product quality and expanding our product offerings to cater to evolving consumer preferences. As of the date of this prospectus, our research and development department is composed of 51 employees and it closely collaborates with the sales and marketing department, and the production department to periodically introduce new products and enhance the ingredients and packaging of existing products. We also enter into strategic cooperation agreements with external research institutions for the development of new products and product formulas. Leveraging our expertise in new product development, we developed and introduced 50, 62 and 11 new products to the market, during fiscal years 2021 and 2022, and during the six months ended June 30, 2023, respectively.

We also pride ourselves in upholding high standards for food safety, product quality and sustainability. The operating subsidiaries have stringent quality control systems in place at every stage of our value chain, from processing to sales and distribution. The operating subsidiaries have obtained internationally recognized quality assurance certifications, including (i) the ISO 22000:2018 Food Safety Management System Certificate, and (ii) the Hazard Analysis and Critical Control Point (HACCP) System Certificate.

We generate revenue primarily from sales of cured meat products, snack products and frozen meat products. For the six months ended June 30, 2023, we had total revenue of approximately $65,956,754 and net income of approximately $6,221,216. Revenue derived from sales of cured meat products, snack products and frozen meat products accounted for approximately 67.28%, 27.63% and 5.09% of our total revenue, respectively.

For the fiscal years ended December 31, 2021 and 2022, we had total revenue of approximately US$134,034,331 and US$130,789,405, representing a decrease by approximately 2.42%. Revenue derived from sales of cured meat products accounted for approximately 71.26% and approximately 67.58% of the total revenue for those fiscal years, respectively. Revenue derived from sales of snack products accounted for approximately 25.69% and approximately 27.45% of the total revenue for those fiscal years, respectively. Revenue derived from sales of frozen meat products accounted for approximately 3.06% and approximately 4.96% of the total revenue for those fiscal years, respectively.

Our Competitive Strengths

We believe the following competitive strengths are essential for our success and differentiate us from our competitors:

Excellent Track Records and Reputation

We, through the operating subsidiaries, have an excellent track record in China’s meat processing market and have established a strong brand recognition under the “Wing Yip” (“荣业”) brand. Our “Wing Yip” (“荣业”) brand was awarded the title of the “Most Popular Cured Meat Brand in the Guangdong-Hong Kong-Macao Region” by a joint collaboration of China High-end Restaurant & Hotel Asian Leaders Summit, Guangdong Culinary Association,

International 5-S Association, The Association for Hong Kong Catering Services Management LTD., The United Association of Food and Beverage Merchants of Macao, and “Guangdong Cuisine” Magazine in 2015. In 2017, we, through our operating subsidiaries, were honored with the title of “Guangdong Time-Honored Brand” by the Guangdong Time-Honored Brand Working Committee. Additionally, in 2017, we, though the operating subsidiaries, were recognized as the “Leading Agricultural Enterprise” in Zhongshan City by the People’s Government of Zhongshan City. In 2021, we through the operating subsidiaries, was awarded “National Key Leading Enterprise in Agricultural Industrialization”, by a joint collaboration of certain government authorities. For more information, see “Business — Licenses, Awards and Certificates.”

The operating subsidiaries promote our brand and products through various channels, including outdoor advertisements, television commercials, and large-scale exhibitions. In recent years, to expand our consumer coverage, the operating subsidiaries have also begun promoting our brand through e-commerce platforms. See also “Business — Distribution — E-commerce Platforms.” We believe that our understanding of industry trends and consumer preferences, as well as our ability to provide quality meat products, have bolstered consumer confidence in us and enhanced our reputation within the industry.

Focus on Quality Control and Maintaining High Standards for Food Safety

We believe that the safety and quality of our meat products are crucial to our success. We, through the operating subsidiaries, have established rigorous and comprehensive food safety and quality control systems to ensure the quality of our meat products. The operating subsidiaries are dedicated to ensuring high safety and quality standards for both our meat products and the raw materials that the operating subsidiaries procure for their production. The operating subsidiaries have obtained internationally recognized quality assurance certifications, including the ISO 22000:2018 Food Safety Management System Certificate, and Hazard Analysis and Critical Control Point (HACCP) System Certificate for our processing facilities since 2017. As of the date of this prospectus, our quality control team consists of 7 members, all of whom possess qualifications relevant to internal product quality testing. Our quality control team closely monitors our processing procedures.

To ensure the safety and quality of our products, we, through the operating subsidiaries, have also established and maintained strict technical specifications and procedures for each processing step. Our products comply with the standards set by the China National Medical Products Administration and routinely undergo relevant tests to determine the presence of veterinary drugs or prohibited chemicals (such as Sudan red dyes), consistent with industry practices prescribed by such regulatory authority. We, through the operating subsidiaries, have established and operationalized supplier control measures, including a supplier assessment system based on various factors, such as product quality and service standards. The operating subsidiaries also conduct sampling tests on the raw materials they procure to ensure their quality meets relevant standards. Our quality control team is responsible for controlling the quality of incoming raw materials. See also “Business — Quality Control and Food Safety.”

As of the date of this prospectus, the operating subsidiaries have not incurred any significant fines or penalties from any relevant government authorities due to the quality or safety of our products, nor have we been required to conduct any significant product recalls.

Strong Product Development Capabilities and a Diverse Range of Innovative Products.

We, through the operating subsidiaries, are dedicated to enhancing our product quality and expanding our product variety to meet evolving consumer preferences. Our product development strategy includes introducing new products as well as improving the ingredients and packaging of existing products. Leveraging our expertise in new product development, we, through the operating subsidiaries, developed and introduced 50, 62 and 11 new products to the market, during fiscal years 2021 and 2022 and during the six months ended June 30, 2023, respectively, including ready-to-eat western-style sausages, health foods (such as chicken breast fillets), and frozen meat products. For the fiscal years 2021, and 2022, and for the six months ended June 30, 2023, our research and development costs were approximately US$5.01 million, US$4.11 million, and US$1.58 million, accounting for 16.62%, 14.77%, and 14.39% of our total operating costs, respectively.

As of the date of this prospectus, our internal technical R&D department consists of 51 members, primarily responsible for developing new products and improving the formulations of existing products. Our technical R&D department actively collaborates with our sales and marketing department, as well as the production department, to gather market intelligence from various segments. This enhances our understanding and adaptability to changes in consumer tastes

and preferences, with particular focus on product flavor, appearance, ingredients, and packaging, while maintaining our production costs at an acceptable level. In addition to our in-house R&D engineers, as of the date of this prospectus, we, through the operating subsidiaries, also collaborate with 6 external R&D consultants who have rich experience in food processing technology, flavorings, and food additives, to develop new products. Furthermore, to stay updated on the latest market developments and trends, we, through the operating subsidiaries, have signed strategic research collaboration agreements with 4 strategic partners, including research institutions and flavor suppliers, to develop new products. In addition, we, through our operating subsidiaries, have also retained six external consultants to provide consulting services for product development and product quality.

In an effort to take advantage of the improving living standards and increasing health awareness among end consumers in China, we, through the operating subsidiaries, have initiated a strategic collaboration with Foodnamoo, Inc., a Korean company engaged in manufacturing and distributing packaged meat products, listed on KOSDAQ (stock code: 290720), a stock exchange in the Republic of Korea (“Korea”). To this end, in 2021, we established a joint venture company Food Health Technology (China) Holdings Group Limited (“Food Health”), with Foodnamoo, Inc. in Hong Kong, under a joint venture shareholders’ agreement by and between us and Foodnamoo, Inc., dated November 30, 2020 (the “Joint Venture Agreement”), to develop healthy foods such as chicken breast fillets in mainland China. Under the Joint Venture Agreement, we will hold a 40% equity interest in of Food Health and Foodnamoo, Inc. will hold a 60% equity interest, and there will be four directors, made up of two directors from us and two directors from Foodnamoo, Inc. The Joint Venture Agreement also imposes certain restrictions on our and Foodnamoo, Inc.’s ability to engage in the same or similar product activities as Food Health in the PRC without mutual consent, subject to certain exceptions and we cannot directly or indirectly solicit or employ each other’s executive or managerial individuals for the time period when such individual in question is a shareholder of Food Health and for a period of 12 months after such individual in question ceases to be a shareholder of Food Health.

Moreover, we anticipate continuing developing and launching new products to cater to the growing demand for a healthier lifestyle among the new generation of consumers. In 2023, we developed plant-based meat alternatives made from plant proteins, and launched frozen plant-based meat patty products with various flavors, including beef, chicken and pork flavors. We believe that our product development capabilities will enable us to expand our product offerings, differentiate ourselves from competitors, and maintain sustainable growth and development.

Extensive sales and distribution network.

Our sales and distribution network covers a wide geographical area and encompasses all major distribution channels. As of the date of this prospectus, we, through the operating subsidiaries, operate 7 self-owned stores in Guangdong Province. See “Business — Facilities.” We also utilize a distribution model by selling our products to third-party distributors, including large supermarkets, retailers, and wholesalers. As of the date of this prospectus, we, through the operating subsidiaries, have 72 distributors, enabling our meat products to reach consumers in 18 provinces across mainland China, including Guangdong, Zhejiang, Shanghai, and Hunan. We have optimized our distribution structure through careful and standardized selection. This network extends to numerous sales points, allowing us to sell our products in markets ranging from provinces to counties and even covering some remote areas in China. We believe that the scale of our sales and distribution network gives us a competitive advantage over our competitors. Additionally, we benefit from the high level of commitment from our distributors, many of whom have long-standing partnerships with us.

To strengthen our customer relationships, we maintain a dedicated sales team that periodically visits our distributors to gather feedback on our products and offer assistance. We work closely with our distributors to understand the needs of end consumers, devise marketing plans, and expand our product offerings. We believe that our stable business relationships with distributors also enable us to successfully launch new products tailored to specific tastes and preferences of end consumers.

To capitalize on the opportunities presented by China’s rapidly growing e-commerce landscape and meet the demand for convenient shopping, we, through the operating subsidiaries, began operating our online store, the Wing Yip Mall, in October 2017 (shop.wingyip-food.com). We also collaborate with third-party e-commerce operators to expand our distribution channels to well-known e-commerce platforms, including Tmall, JD.com, TikTok (Chinese version), Kuaishou, Pinduoduo, and 1688. Through these online platforms, the operating subsidiaries directly sell our products to end consumers and increase our market share in the Chinese online market. During the fiscal years 2021 and 2022, and during the six months ended June 30, 2023, our revenue derived from e-commerce platforms was approximately US$2.97 million, approximately US$2.92 million and approximately US$0.81 million, respectively, accounting for approximately 2.21%, approximately 2.24% and approximately 1.23% of our total revenue, respectively.

An Experienced and Capable Management Team

We have an experienced and capable management team with a wealth of market knowledge and experience in the Chinese food and food processing industry. Our Executive Directors, Mr. Xiantao Wang and Ms. Tingfeng Wang, each possesses over 10 years of experience in business management and the food processing industry, enabling us to better understand market trends, develop new products, and identify and capture new business opportunities. Our senior management team also brings extensive operational and management experience in the production of processed foods in China, product development, marketing, and human resources management. We believe that their active involvement in the operating subsidiaries’ day-to-day operations allows them to make timely decisions when needed.

Our Growth Strategies

We intend to develop our business and strengthen brand loyalty by implementing the following strategies:

Providing Customized Chinese-style Pre-cooked Meat Products for Various Businesses, Specifically Offline Dining Chain Brands and Fast-food Brands

We are exploring new business opportunities and aim to provide customized Chinese-style pre-cooked meat products for various businesses, including offline dining chains and fast-food enterprises. We expect that this approach will allow for tailored solutions that can meet the specific requirements and taste profiles of different brands, fostering stronger partnerships.

Chinese-style pre-cooked meats such as barbecued pork (char siu) hold a significant place in Chinese cuisine. By providing these products to offline dining chains, we expect to tap into the market’s desire for authentic and quality ingredients. This move is designed to cater to a growing consumer base seeking traditional flavors in a convenient, ready-to-use format. Fast-food brands, especially those specializing in items such as instant noodles or claypot rice dishes, require ready-to-use meat products for quick preparation. Offering sausages or cured meats specifically tailored for these types of dishes addresses the need for convenience, ultimately catering to the fast-paced nature of this market segment. The emphasis on “customized” products signifies our flexibility and willingness to collaborate closely with our business clients. We believe that the introduction of these specialized meat products will set us apart in the market, distinguishing us from our competitors. We expect this strategy to position us as a provider of high-quality, authentic Chinese-style meats, potentially opening up opportunities for expansion and market penetration.

Increasing Investment in Developing Snack Products

We, through the operating subsidiaries, are committed to increasing investment in snack products in our future development, particularly focusing on the research and market promotion of snack products such as ready-to-eat sausages and claypot rice. We believe that with the growing demand from consumers for delicious, convenient, and diverse snack options, the snack food market holds tremendous growth potential. As of September 30, 2023, we have a total of 72 varieties of snack products, accounting for 25.09% of the overall product range. In the future, we will further increase the proportion of snack products in our portfolio.

We will also employ marketing strategies such as brand upgrades, innovative packaging designs, and virtual idol AI live streaming to better attract young consumers and meet their demands for delicious snacks and brand experiences. Simultaneously, we will continuously expand our distribution channels, such as convenience stores and kiosks, to integrate our products more widely into the daily lives of young people.

We believe that the vast growth opportunities in the snack food market will provide strong support for our strategies in future development. Through continuous innovation, high-quality products, and market expansion, we aim to achieve greater success in the competitive market.

Continuing to Expand our Product Range of Healthy Foods

We plan to dive deeper into the healthy food sector, with a focus on a core product line centered around chicken, specifically catering to the nutritional needs of fitness enthusiasts by offering high-protein, low-fat options. Additionally, we will actively innovate in the plant-based meat product category to meet the growing demand for sustainable, healthy, and plant-based foods among consumers.

We believe that the potential in the healthy food market is immense. As people increasingly prioritize a healthy lifestyle and the demand for quality protein and plant-based diets rises, our strategies will explore vast opportunities in the market. We will be driven by innovation, combining premium ingredients with advanced production techniques to create delicious products that fulfill nutritional requirements of customers. In the field of health foods, our goal is to become the preferred brand trusted by consumers. We will continuously strive for quality, innovation, and health, seizing market opportunities through the expansion of our product range and sales channels.

Developing a New Line of Pre-Made Meal Products

We understand that the fast-paced lifestyles of young people have led to an increasing demand for convenient foods. We plan to actively develop and launch a new frozen sausage and pre-made meal product line, closely aligned with the consumption habits of modern young individuals. Our aim is to provide them with convenient, delicious, and nutritionally balanced food choices. As of the date of this prospectus, we have initiated the research and development process. We plan to conduct small-scale trial production by the second quarter of 2024, obtaining feedback from the market. If the new products successfully pass the market testing phase, we plan to establish formal production lines in the third quarter of 2024, and conduct mass production for the new series by the fourth quarter of 2024 or the first quarter of 2025.

To develop and introduce the new line of pre-made meal products to the market, we intend to strengthen our research and development capabilities by (i) hiring more R&D engineers, (ii) upgrading our existing R&D production equipment, and (iii) enhancing collaboration with external research institutions for new product development and market research on consumer preferences. We believe that our robust product development capabilities, combined with our well-known brand name and extensive sales and distribution network, provide a strong foundation for us to develop and launch new products into the market.

Establishing Chain Claypot Rice Restaurants

We plan to establish a series of chain restaurants specializing in cured meat claypot rice to meet the modern consumers’ pursuit of delicious, convenient, and innovative dining. We will blend the concepts of traditional sausages and claypot rice to create a unique menu, with diverse range of flavors to cater to different consumer preferences. By establishing a standardized and efficient supply chain system, we will ensure that each chain restaurant can provide consistently high-quality cured meat claypot rice. This will include the supply of quality raw materials, strict food safety processes, and standardized production techniques.

We plan to launch our first chain of cured meat claypot rice restaurants by July 2024. We will prioritize brand building and marketing efforts, using multiple channels to promote our unique dining concept and delicious products to consumers. Additionally, we aim to establish close connections with young consumers through social media. In addition to self-owned restaurants, we will introduce a franchise model to rapidly expand our brand’s influence. We will provide comprehensive training, support, and operational guidance to franchisees, ensuring their success in running their businesses. Through our chain of claypot rice restaurants featuring traditional cured meat products, we aim not only to preserve culinary heritage but also to provide consumers with a new dining experience and offer fresh choices to the market.

Strengthening Product Quality and Food Safety Controls

As of the date of this prospectus, we have engaged a third-party quality testing center to conduct regular quality inspections and certifications of our products in accordance with applicable laws and regulations. We plan to establish our own quality testing center by early 2024 and hire both internal and external inspectors to conduct quality testing on our own products as well as products provided by other market participants. By establishing our own quality testing center, we believe that the data collected related to product quality issues can be further analyzed, enabling us to better understand and detect any potential risks and quality issues at an early stage. This, in turn, will help us improve our product quality and strengthen our food safety controls. Additionally, we believe that after obtaining the relevant certifications, offering certification services to other third-party suppliers can expand our sources of income.

Our Products

Overview

We, through our operating subsidiaries, offer a wide range of meat products. The main categories of our products are i) cured meat products, including cured pork sausages, cured pork meat and other cured meat products, such as cured chicken, cured duck and cured fish; ii) snack products, including ready-to-eat sausages, jerky, duck necks, duck feet and claypot rice; and iii) frozen meat products, including frozen sausages, frozen beef patties and frozen chicken breast fillets.

The following tables present our revenue for the fiscal years ended December 31, 2021 and 2022, and for the six months ended June 30, 2023. See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.”

Cured Meat Products

Most of our revenue was generated from sales of cured meat products for the fiscal years ended December 31, 2021 and 2022, and for the six months ended June 30, 2023. Our cured meat products include i) cured pork sausages, ii) cured pork meat and iii) other cured meat products, such as cured chicken, cured duck and cured fish. As of the date of this prospectus, we provide over 182 cured meat products.

For the fiscal years ended December 31, 2021 and 2022, and for the six months ended June 30, 2023, our revenue generated from sales of cured meat products was US$95,505,403, US$88,393,493 and US$ 44,371,282, respectively, accounting for 71.26%, 67.58% and 67.28% of our total revenue. Generally, the production cycle and lead time for our cured meat products from the date of customer order placement to the date of finished product shipment is approximately 48 to 72 hours. The shelf life of our cured meat products ranges from 90 to 270 days.

Snack Products

Drawing on our experience in producing cured meat products, we, through the operating subsidiaries, have continuously expanded our product portfolio by developing various types of snack products. As of the date of this prospectus, we offer more than 72 varieties of snacks, such as ready-to-eat sausages, jerky, duck necks, duck feet, and claypot rice.

For the fiscal years ended December 31, 2021 and 2022, and for the six months ended June 30, 2023, our revenue generated from sales of snack products was US$34,429,856, US$35,906,342 and US$18,226,948, respectively, accounting for 25.69%, 27.45% and 27.63% of our total revenue. Generally, the lead time for production of our snack products from the date of customer order placement to the date of finished product shipment is approximately 72 hours. Our snack products are typically allowed to sit in a dry environment for two days after production to ensure there is no air leakage before packaging for storage and transportation. The shelf life of our snack products ranges from 180 to 270 days.

Frozen Meat Products

To further diversify our product range, we, through the operating subsidiaries, began selling frozen meat products in 2019. Our frozen meat products primarily include frozen sausages, beef patties, and chicken breast fillets. As of the date of this prospectus, we offer more than 33 varieties of frozen meat products.

For the fiscal years ended December 31, 2021 and 2022, and for the six months ended June 30, 2023, our revenue generated from sales of frozen meat products was US$4,099,072, US$6,489,570 and US$3,358,524, respectively, accounting for 3.06%, 4.96% and 5.09% of our total revenue.

Generally, the lead time for production of our frozen meat products from the date of customer order placement to the date of finished product shipment is approximately 72 hours. The shelf life of our frozen meat products is around 1 year.

Production

Production Process

The production process of our products is illustrated in the following diagram.

•        raw meat and thawing:    our raw meat and other raw materials are purchased and stored according to our procurement guidelines. After the production order is confirmed, frozen raw meat will be thawed for further processing. Depending on the thickness of the meat, the thawing process takes approximately six to eight hours.

•        cutting, grinding, and mixing:    the thawed raw meat is then cut and ground using a meat grinder and mixed with other complementary ingredients (such as salt, sugar, and other seasonings) for approximately 10 to 15 minutes.

•        filling and baking:    the mixed meat blend is filled into molds to achieve the desired final product shape. The addition of ingredients strictly adheres to the product recipe’s requirements, and additives are used according to relevant standards. The filled meat blend is then baked using an oven. The baking time and temperature vary depending on the type of product being produced. Baking times for our products range from 30 minutes to 72 hours, and baking temperatures range from 48 degrees Celsius to 105 degrees Celsius. Certain products, such as sausages, undergo two rounds of baking to ensure thorough and even cooking.

•        trimming, cooling, and packaging:    after the meat products have finished baking, some meat processed products are trimmed into their final shapes. Subsequently, the meat processed products are cooled for 1 to 48 hours before being packaged.

•        metal detection and sterilization:    we conduct metal detection on packaged products to ensure the safety and integrity of our products by identifying metal contaminants. Low-temperature meat processed products are subsequently sterilized at a core temperature of up to 80 to 100 degrees Celsius for 10 to 20 minutes, while high-temperature meat processed products are sterilized at a core temperature of 105 to 121 degrees Celsius for 15 to 30 minutes. Lower sterilization temperatures are used for low-temperature meat processed products to retain nutritional content, tenderness and flavor. The higher sterilization temperatures for high-temperature meat processed products effectively eliminate more microorganisms, extending shelf life and enabling room temperature storage.

•        freezing:    our frozen meat products are subject to a low-temperature freezing process at minus 18 degrees Celsius for 20 minutes.

•        packaging, storage, transportation, and distribution:    after sterilization, our products are left idle for two days to detect any issues, such as swelling or leakage. Finally, our meat products are packaged and delivered to warehouses for distribution and sale.

Production Facilities

The operating subsidiaries produce our products through a self-owned food processing plant with a total floor area of approximately 14,339 square meters, located in Zhongshan City, Guangdong Province. See “Business — Facilities”. As of the date of this prospectus, the operating subsidiaries have 12 production lines for processing cured meat products, 6 production lines for processing snack products, and 2 production lines for processing frozen meat products. The estimated total annual production capacity is 15,000 tons of cured meat products, 5,000 tons of snack products, and 1,500 tons of frozen meat products.

In fiscal years 2021, and 2022, and for the six months ended June 30, 2023, the utilization rates for processing cured meat products (our main products) were approximately 77%, 67%, and 73%, respectively.

Key equipment used in our meat processing includes ovens, natural gas boilers, vacuum emulsifying machine, vacuum filling line, microwave thawing line, vacuum cutting mixer, vacuum mixing machine, automatic tying machine, cleaning and drying line, automatic weighing line. The operating subsidiaries procure most of the machinery required for our production lines from manufacturers in China.

To expand our production capacity, we have initiated plans to construct additional baking and packaging production lines starting in 2023. The estimated total floor area for this expansion is approximately 5,000 square meters. The expansion will take place on the vacant area adjacent to our existing food processing plant located in Zhongshan City, Guangdong Province. See “Business — Facilities.”

Research and Development

Through years of operation, we have accumulated experience in processing high-quality meat products and developed a diverse product portfolio. Our product development strategy includes launching new products and improving the ingredients and packaging of existing products. We strive to expand our product offerings and enhance product quality to meet evolving consumer preferences.

In fiscal years ended December 31, 2021, and 2022, and for the six months ended June 30, 2023, we introduced 50, 62, and 11 new products, respectively. These included ready-to-eat western-style sausages, health foods such as chicken breast fillets, and frozen meat products. As we aim to target younger generations, we developed and introduced 18, 24, and 1 new snack products in fiscal years 2021, 2022, and for the six months ended June 30, 2023, respectively. These included items like “hand-torn beef jerky,” “marinated beef,” and “grilled sausages.”

As of the date of this prospectus, our internal R&D department consists of 51 members, primarily responsible for developing new products and enhancing the formulations of existing ones. Our R&D engineers possess extensive experience in the Chinese food industry, and their efforts have resulted in 14 patents related to various processing technologies.

Our new product development process usually begins with market research and feasibility studies of market trends and consumer preferences. We conduct internal sample testing and formulation modifications for new products. During new product development, we perform market testing by introducing a limited quantity of new products through our self-operated stores or online channels to gather customer feedback. Once the product formulation is finalized, we hire third-party testing centers to conduct quality control tests and certifications before commencing mass production and sales.

Our R&D department actively collaborates with our sales and marketing department, and the production departments to gather market intelligence for different segments, enhancing our understanding and response to changing consumer tastes and preferences. We focus on product taste, appearance, ingredients, and packaging while keeping our production costs at acceptable levels.

In addition to our in-house R&D engineers, we also collaborate with 6 external R&D consultants who have rich experience in food processing technology, flavors, spices, and food additives to develop new products. Furthermore, to stay updated on market developments and trends, we have signed strategic research cooperation agreements with 4 strategic partners, including research institutions and flavor suppliers, to develop new products. These partners provide technical research support on a project basis. We retain full intellectual property rights to any creations or inventions developed resulting from such agreements. In return, we offer job and internship opportunities for students from these research institutions. In addition, we, through our operating subsidiaries, have also retained six external consultants to provide consulting services for product development and product quality.

Due to the rising living standards and growing consumer health awareness in China, we, through our operating subsidiary Wing Yip GD, have entered into a strategic partnership with Foodnamoo. Inc., a Korean company engaged in manufacturing and distributing packaged meat products, listed on KOSDAQ (stock code: 290720), a stock exchange in Korea. In 2021, we established a joint venture with Foodnamoo, Inc. in Hong Kong to develop healthy foods such as chicken breast fillets in mainland China. See “Business — Our Competitive Strengths — Strong Product Development Capabilities and a Diverse Range of Innovative Products.” Additionally, we plan to continue developing and introducing new products to cater to the increasing demand for healthier lifestyles among the new generation. In 2023, we developed plant-based meat alternatives made from plant proteins, and launched frozen plant-based meat patty products with various flavors, including beef flavor, chicken flavor and pork flavor. We believe our product development capabilities enable us to expand our product supply, stand out from competitors, and drive our sustainable growth and development.

In fiscal years 2021, and 2022, and for the six months ended June 30, 2023, our research and development costs were US$5,008,535, US$4,105,172, and US$1,580,331, respectively, accounting for 16.62%, 14.77%, and 14.39% of our total operating costs.

Distribution

We, through the operating subsidiaries, have established an extensive sales and distribution network. We primarily sell our products through distributors, our self-operated stores, and online channels, including our online store, the Wing Yip Mall (shop.wingyip-food.com), and other third-party e-commerce platforms. As of the date of this prospectus, we mainly distribute and sell our products through i) 72 distributors across 18 provinces in mainland China, including major retail outlets and supermarkets, ii) 7 e-commerce platforms and iii) 7 self-operated stores.

Distributors

Our primary sales channel involves selling our products to distributors whose designated sales regions are located within mainland China. We believe that by selling our products through distributors, we can leverage their local market knowledge and resources to further promote the sales of our meat products, deepen our market penetration, and expand our geographical coverage.

As of the date of this prospectus, we have established partnerships with 72 distributors, all of which are independent third parties located in China.

Distribution Agreements

We, through the operating subsidiaries, enter into non-exclusive distribution agreements with our distributors. The common key terms of our distribution agreements include the following:

The distribution agreement does not contain any restrictions on distributors from selling our products to other sub-distributors, nor does it include clauses regarding product liability. Once the products are sold to distributors, and all ownership and risk associated with those products have been transferred to distributors, we will recognize the sales of our products. After distributors acknowledge receipt of these products, they have no recourse against us if they are unable to sell our products subsequently.

Management of Distributors

Before selecting each distributor, we, through the operating subsidiaries, conduct a review of potential distributors’ experience, creditworthiness, market reputation, business capabilities, and qualifications. To promote our products, ensure compliance with the terms of the distribution agreement, and manage the operations of distributors, our sales personnel (i) periodically communicate with distributors to gather their feedback; (ii) observe the sales performance of our products to understand market conditions; and (iii) conduct on-site checks of the corresponding selling prices of our products at randomly selected distributor locations, to ensure compliance with our pricing policies.

Our distributors are only allowed to sell our products through specific sales channels within the regions specified in the distribution agreement. To minimize the risk of cannibalization, the operating subsidiaries typically take the following measures: (i) during the distributor screening process, the operating subsidiaries consider their respective geographical ranges to avoid potential competition among distributors in the same area; (ii) our distribution agreements specify designated distribution areas; and (iii) the operating subsidiaries communicate with distributors and conduct on-site inspections of sales points to monitor various aspects of their sales activities and track any potential cannibalization or competition among distributors. As of the date of this prospectus, we did not discover any significant cannibalization or competition among distributors in the same sales area.

Self-operated Stores

We, through our operating subsidiaries, operate self-operated stores under the “Wing Yip” (“荣业”) brand. We believe that the self-operated model allows the operating subsidiaries to effectively enhance hygiene and product safety, execute operational and financial plans, gather valuable customer data and feedback, and quickly adapt to evolving market trends and consumer preferences. In fiscal years 2021, and 2022, and for the six months ended June 30, 2023, we had 7, 7, and 7 self-operated stores, respectively.

All of our self-operated stores are located in Guangdong Province, China, with an average floor area of 108.73 square meters for each store, leased from independent third parties. Typically, we sign lease agreements for our stores ranging from two to four years. See “Business — Facilities.” In our self-operated stores, we sell cured meat products, snack products, and frozen meat products to both direct retail customers and some wholesale customers.

In fiscal years 2021, and 2022, and in the six months ended June 30, 2023, our revenue derived from sales through self-operated stores amounted to approximately US$21.11 million, US$20.27 million, and US$10.21 million, respectively, accounting for approximately 15.74%, 15.5%, and 15.48% of our total revenue.

E-commerce Platforms

To capitalize on the opportunities presented by the rapid growth of e-commerce in China and meet consumer demands for more convenient shopping, we launched our online store, the Wing Yip Mall (shop.wingyip-food.com), in 2018. The primary target customers of our online store, the Wing Yip Mall (shop.wingyip-food.com), are wholesalers and group buyers who purchase our products at discounted prices in bulk.

We, through the operating subsidiaries, have also established presence on well-known third-party online marketplaces in China, including Tmall, JD.com, Tik Tok (Chinese version), Kuaishou, Pinduoduo, and 1688. The number of online platforms where we have established stores has increased from 4 as of 2020 to 6 as of the date of this prospectus. Through these online platforms, we sell our products directly to end consumers and have increased our market share in the online market in China.

In fiscal years 2021, and 2022, and during the six months ended June 30, 2023, our revenue derived from sales through e-commerce platforms amounted to approximately US$2.97 million, US$2.92 million, and US$0.81 million, respectively, accounting for approximately 2.21%, 2.24%, and 1.23% of our total revenue.

Pricing

Our products are generally not subject to any price controls or regulatory restrictions imposed by Chinese government authorities. Typically, we determine product prices using a cost-plus model, considering factors such as raw material costs, production costs, marketing expenses, market conditions, and our adopted business strategies. For newly developed products, we often use target profit pricing, taking into account factors such as production quantities, production costs, and our target profit margins. We adopt different pricing strategies for different sales channels.

In our online store, the Wing Yip Mall (shop.wingyip-food.com), we, through the operating subsidiaries, usually sell our products at relatively lower prices, because we accept bulk orders and provide discounts to these customers. We, through the operating subsidiaries, also engage in marketing activities through online channels, offering products to customers at discounted prices.

In the event of significant fluctuations in raw material costs, we may adjust product prices. We communicate such adjustments to our distributors in accordance with relevant distribution agreements.

Additionally, we, through the operating subsidiaries, have incentive programs that provide rebates to distributors, based on sales exceeding set targets, aiming to motivate distributors to achieve progressive sales objectives. The rebate amounts vary depending on the sales targets and performance of the respective distributors.

Customers

Customers of our operating subsidiaries include third-party distributors, which encompass both retailers and wholesalers, as well as customers who purchase from i) our self-operated stores, ii) our online store, the Wing Yip Mall (shop.wingyip-food.com), and iii) other third-party e-commerce platforms. All of the sales are within China.

We, through the operating subsidiaries, typically do not enter into long-term agreements with our major customers. Instead, we have annual distribution agreements with our distributors.

Below is a list of the top three customers and the percentages each of them individually accounted for our annual total revenue, during the fiscal years ended December 31, 2021 and 2022, and during the six months ended June 30, 2023.