UCFI 10-K & 10-Q changes, risk factors and insider trading

There are many factors that affect our business and results of operations, some of which are beyond our control. The following is a description of some important factors that may cause the actual results of operations in future periods to differ materially from those currently expected or desired.

Risks Related to the Trading Halt

As of October 1, 2025, in accordance with Nasdaq’s oral notice, our securities have been suspended from trading on Nasdaq. As of the date of this annual report, our securities have not resumed trading on Nasdaq, which may have a material adverse impact on the value or liquidity of investors holding our securities.

As disclosed in our Form 8-K filing with the U.S. Securities and Exchange Commission (SEC) on October 6, 2025, following Nasdaq’s listing on October 1, 2025, Nasdaq notified the Company that it had received notification from China Securities Regulatory Commission (“CSRC”) officials stating that Nasdaq’s CSRC review process for the Company’s U.S. listing had not been completed. Consequently, Nasdaq suspended trading of the Company’s common stock and warrants while requiring clarification on these matters (the “Trading Halt”). The Company asserts that it has fulfilled its obligations to the CSRC and has obtained legal opinions from its Chinese securities legal counsel regarding this matter. Additional documentation has been submitted to Nasdaq. However, as of the date of this annual report, the Trading Halt remains in effect.

If the Trading Halt persists, or if our securities are ultimately delisted from Nasdaq, our investors may face significant adverse consequences due to their holdings, including:

The National Securities Market Improvement Act of 1996, a federal statute, prohibits or takes precedence over state regulations regarding the sale of certain securities (referred to as “regulated securities”). While states are prioritarily deprived of regulatory authority over securities sales, this federal law does allow states to investigate companies when fraud is suspected. If fraudulent activities are identified, states may impose oversight or prohibit the sale of regulated securities under specific circumstances. Although no state has utilized these powers to restrict securities issued by blank check companies (with the exception of Idaho), securities regulators in some states maintain negative views toward such entities and may employ or threaten to employ these authorities to hinder the sale of blank check company securities within their jurisdictions. Furthermore, if we delist from NASDAQ, our securities will cease to be regulated securities and will fall under the jurisdiction of the states where we offer them.

Should Nasdaq ultimately decide to delist our securities, we may face shareholder lawsuits, which would have a significant adverse impact on our operations.

Should Nasdaq ultimately decide to delist our securities, this action is likely to negatively impact their price performance and impair shareholders’ ability to trade them. In the event of delisting, we cannot guarantee that any measures taken to meet listing requirements will result in securities relisting, stabilize market prices, enhance liquidity, or prevent future violations of Nasdaq’s listing standards.

Furthermore, if our securities are not listed on NASDAQ or delisted from NASDAQ for any reason and are traded on the Over-the-Counter Bulletin Board—an automated quotation system for stock trading between non-national stock exchanges—our securities may face greater liquidity and pricing constraints compared to listings on NASDAQ or other national stock exchanges. Should our securities experience liquidity shortages, shareholders may struggle to trade their holdings unless market conditions can be restored. Conversely, if investors are unable to trade our securities, this could severely impact our capacity to raise additional capital.

If any of our shareholders initiate legal proceedings against us, we may incur substantial costs in litigation defense. Such lawsuits may also divert the time and attention of our management, preventing them from focusing on our business operations, thereby severely impairing our business performance, profitability, and reputation.

According to China law, the business merger with IRON HORSE that we completed on September 30, 2025 requires filing with the China Securities Regulatory Commission. As of now, we cannot predict when we will complete such filings.

The Regulations on Foreign Investors’ Acquisition of Domestic Companies, commonly referred to as the M&A Rules, were promulgated in 2006 by six different China regulatory authorities and revised in 2009. On the surface, they require offshore special purpose vehicles controlled by China companies or individuals to obtain approval from the China Securities Regulatory Commission (CSRC) before listing their securities on overseas stock exchanges through acquisitions of domestic companies or assets in China. The interpretation and application of these provisions remain unclear, and our offshore issuance may ultimately require approval from the CSRC. If such approval is required, we face uncertainties regarding our ability to obtain it and the potential timeframes involved. Furthermore, even if approved by the CSRC, such approval may be revoked. Any failure to obtain or delay obtaining CSRC approval for our listing, or any revocation of such approval, may subject us to sanctions from the CSRC or other China regulatory authorities. These sanctions may include fines and penalties affecting our operations in China, restrictions or constraints on our ability to distribute dividends overseas, and other forms of sanctions that could have significant adverse impacts on our business, financial condition, and operating performance.

In addition, the Chinese government has recently attempted to impose greater supervision and control over overseas issuances or foreign investments by China issuers. Among other measures, the Guidelines (definitions provided below) emphasize the need to strengthen cross-border regulatory cooperation, as well as the management and supervision of China issuers, and to establish a comprehensive regulatory framework to apply China capital market laws and regulations overseas. On February 17, 2023, the China Securities Regulatory Commission (CSRC) promulgated the “Interim Measures for the Administration of Overseas Securities Issuance and Listing by Domestic Companies,” also known as the “Overseas Listing Filing Rules,” which came into effect on March 31, 2023. According to the Overseas Listing Filing Rules, China domestic companies issuing or listing stocks, depositary receipts, convertible corporate bonds, or other equity securities in overseas stock markets, whether directly or indirectly through offshore holding companies, must file with the CSRC. If a China domestic company intends to complete an overseas (i) initial public offering and listing or (ii) listing under the name of an overseas enterprise through one or more acquisitions, stock swaps, stock transfers, or other means, based on the equity, assets, income, or other similar rights of the relevant China domestic company, the issuer (if the issuer is a China domestic company) or its designated major China domestic operating entity (if the issuer is an offshore holding company) must report to the entity within three working days after the issuer submits application documents related to the initial public offering and/or listing, or after the first announcement of the relevant transaction (if no application documents are required). The determination of whether any issuance or listing is “indirect” will be based on the principle of “substance over form.” If the issuer meets the following two conditions, the issuer’s issuance or listing will be considered an overseas indirect issuance or listing of a China domestic company: (i) The revenue, profit, total assets, or net assets of the China domestic company in the most recent fiscal year account for more than 50% of the relevant line items in the issuer’s audited consolidated and consolidated financial statements for that year; and (ii) The majority of senior executives responsible for its business operations and management are Chinese citizens or have a general residence in China, or if its principal place of business is in China, or if its business operations are primarily conducted in China. In addition, according to the “Overseas Listing Filing Rules” and a set of Q&As published on the official website of the China Securities Regulatory Commission (CSRC) related to the release of the “Overseas Listing Application Rules,” if any regulatory authority with jurisdiction over the relevant industries and sectors explicitly requires (in the form of institutional rules) that a China domestic company must fulfill regulatory procedures before listing overseas, the company must obtain regulatory opinions, approvals, and other documents from the competent authority prior to submitting filings to the CSRC, and complete any required filings. After obtaining filing with the China Securities Regulatory Commission (CSRC) and before the completion of this issuance and/or listing, if any of the following material events occurs, the reporting entity shall promptly report to the CSRC within three working days and update the CSRC filing: (i) significant changes in the issuer’s main business, licenses, or qualifications; (ii) changes in the issuer’s control or any major changes in the issuer’s equity structure; and (iii) any major changes to the issuance and listing plan. Once listed overseas, the reporting entity shall also be required to report to the CSRC within three working days after any of the following material events occur and are announced to the CSRC: (i) changes in the issuer’s control; (ii) investigations, sanctions, or other measures taken by foreign securities regulatory authorities or relevant competent authorities against the issuer; (iii) changes in listing status or transfer of the Listing Committee; and (iv) voluntary or compulsory delisting of the issuer. In addition, if the issuer completes any overseas follow-on issuance in the same overseas market where the public offering and listing were completed, it must file with the CSRC within three working days. Failure to comply with applicable filing requirements may result in fines imposed on the relevant China domestic company, its controlling shareholders, and other responsible persons.

In accordance with the “Overseas Listing Filing Rules”, the “Notice on Domestic Companies’ Overseas Fundraising Listing Filing Management” issued by the China Securities Regulatory Commission (CSRC) on February 17, 2023, the “Notice on Overseas Listing Filing”, and a series of Q&A published on the CSRC’s official website, we were required to complete filing procedures related to this corporate merger with the CSRC before listing our securities on NASDAQ, in compliance with the “Overseas Listing Application Rules”. We submitted the necessary documents pertaining to the merger to the CSRC on December 21, 2024. On March 19, 2025, the CSRC requested supplementary materials, which we subsequently provided on April 2, 2025. Although this step was mandatory, uncertainties remain regarding the timely completion of the application process and its impact on our NASDAQ listing. Failure to comply with filing requirements or subsequent revocation of approvals could significantly adversely affect our business operations, financial condition, and operational activities. As of the date of this annual report disclosure, we have not yet received the filing notification from the CSRC.

Our limited operational history introduces uncertainty regarding our capacity expansion, ability to meet customer demands, and potential for sustainable growth.

The Group currently operates under a relatively new business structure that includes several subsidiaries established in recent years, although some operational entities have longer histories. However, our existing structure and integration strategy were formally established during the restructuring completed in early 2024, alongside CFI’s business merger with Iron Horse finalized on September 30,2025. These factors may result in insufficient historical data or references for assessing our ability to meet market demands, expand production capacity, and achieve profitability. Given our limited operational history, we face challenges in forecasting future revenues, accurately budgeting expenditures, and identifying emerging trends that could impact business operations.

Risks Related to Doing Business in the PRC

Failure to comply with the Chinese government’s complex regulatory requirements and significant oversight on our business operations may result in substantial adverse impacts on our operations and securities value.

Our facilities are located within the territory of the People’s Republic of China, which requires us to comply with various government and regulatory requirements applicable to our operational locations, including those implemented by various local and municipal authorities and government branches. The Chinese government holds considerable power to influence and intervene in the operations of offshore holding companies, such as CFI. Therefore, our business, financial condition, operational results, and future prospects may be significantly affected by the overall political, economic, and social conditions in China. China’s economic structure differs from that of most developed countries in multiple aspects, including the level of government involvement, development stage, growth rate, foreign exchange controls, and resource allocation. Although the Chinese government has taken measures aimed at promoting market-driven economic reforms, divesting state ownership of productive assets, and improving corporate governance, a significant portion of productive assets in China remains under government ownership. Additionally, the Chinese government continues to play a significant role in shaping industrial development through the implementation of industrial policies. It also maintains substantial control over the Chinese economy by allocating resources, regulating foreign currency debt payments, formulating monetary policies, and providing preferential treatment to specific industries or enterprises. Furthermore, certain regulations (i) on the measures we operate and (ii) on overseas offerings by Chinese issuers and foreign investments may severely restrict or completely hinder our ability to issue or continue issuing securities to investors, leading to significant depreciation or complete loss of value of such securities.

In addition, the Chinese government has considerable control over numerous sectors of the China economy through regulation and state ownership. Our operational capabilities in China are susceptible to significant disruptions from legislative and regulatory changes, including issues related to securities regulation, data protection, cybersecurity, taxation, foreign investment restrictions, and mergers and acquisitions.

The central and local governments of the People’s Republic of China may implement new and stricter regulations or reinterpret existing ones, which will require us to incur additional expenses and efforts to ensure compliance with these directives or interpretations. As a result, we may face substantial government and regulatory requirements in the China provinces where we operate, and may be subject to supervision by various political and regulatory entities, including numerous local and municipal institutions and government branches. We may incur higher costs for complying with existing and newly enacted laws and regulations, or face penalties for non-compliance. If the Chinese government attempts to strengthen oversight and control over overseas issuances and/or foreign investments targeting issuers within China, such actions may severely restrict or completely hinder our ability to issue or continue issuing securities to investors, leading to significant depreciation or total loss of such securities’ value.

China’s economy has experienced significant growth over the past few decades; however, this growth has been uneven across different geographical regions and various economic sectors. The Chinese government has implemented a series of measures aimed at promoting economic growth and strategic resource allocation. While some of these measures may benefit the overall Chinese economy, they could also have negative impacts on our operations. A slowdown in China’s economy may lead to reduced demand for our products, thereby having a significant and adverse impact on our business and operational results.

The uncertainty regarding the legal system partly stems from both published and unpublished government policies, as well as the potential rapid changes in Chinese mainland laws and regulations, which may adversely affect us.

We primarily conduct business through China mainland subsidiaries. Our operations in mainland China are governed by local laws and regulations. Our mainland subsidiaries are subject to the laws and regulations applicable to foreign investment in mainland China. The legal system in mainland China is based on a civil law system with a codified legal framework. Unlike the common law system, under the civil law system, previous court judgments can be cited as references, but their case law value is limited.

Over the past few decades, laws and regulations in mainland China have significantly strengthened the protection of various forms of foreign investment in the mainland. However, due to the relatively recent enactment of certain laws and regulations, as well as the limited number of published judicial rulings that lack binding force, there remains uncertainty in the interpretation and enforcement of these legal provisions.

In addition, the legal system of the Chinese mainland is to some extent based on government policies, some of which are not disclosed or are not disclosed in a timely manner, and may change rapidly without prior notice. Therefore, we may not be aware of our own potential policy and rule violations.

The Chinese government imposes complex regulatory requirements on our business operations and has recently enacted multiple regulations to strengthen oversight of overseas issuance activities and foreign investments in domestic issuers. These measures, along with potential future tightening controls, could severely restrict or even completely hinder our ability to issue securities to investors or continue issuing new securities, potentially causing significant value depreciation or rendering such securities worthless.

The U.S. Securities and Exchange Commission (SEC) may impose additional disclosure requirements and strengthen regulatory scrutiny for companies with significant business operations in China, which could increase our compliance costs, subject us to additional disclosure requirements, and/or suspend or terminate our future securities offerings, thereby making financing more difficult.

On July 30, 2021, in response to recent regulatory developments in China and measures taken by the Chinese government, the Chairman of the U.S. Securities and Exchange Commission (SEC) issued a statement requiring SEC staff to seek additional disclosures from overseas issuers related to companies operating within China before the registration statements of overseas issuers take effect. Therefore, the issuance of our securities may need to comply with additional disclosure requirements and reviews imposed by the SEC or other U.S. regulatory authorities on companies conducting business within China, which could increase our compliance costs, subject us to additional disclosure requirements, and/or result in the suspension or termination of our future securities offerings, thereby making financing more difficult.

The Chinese government has recently issued new policies affecting specific industries, and there is no guarantee that regulations or policies that may adversely affect our business, financial condition, and operating performance will not be introduced in the future. In addition, if China adopts stricter standards in specific areas such as corporate social responsibility or environmental protection, we may incur higher compliance costs or face additional restrictions in operations.

We operate in a highly regulated environment and are subject to extensive regulations in China, which affect our operations and may lead to significant changes in our operations and common stock value.

The environment in which we operate is subject to high regulation. Specifically, our operational activities are constrained by extensive regulations in China, including but not limited to those concerning healthy food, mandatory product certification, defective product recalls, and product liability and consumer protection laws. Multiple Chinese regulatory authorities oversee different aspects of our operations, including but not limited to:

We have an obligation to obtain various government approvals, licenses, permits, and registrations related to business operations, and to comply with mandatory standards and regulations pertaining to manufacturing processes and products. However, the interpretation of these regulations may change, and new regulations may be introduced, which could disrupt or restrict our operations, weaken our competitiveness, or result in high compliance costs. Additionally, the submission of certain documents to government agencies is mandatory. As we expand our sales and distribution networks and add retail stores in China, we cannot guarantee that these filings will be completed in a timely manner. If any of our existing or future branches fail to complete the necessary filings, they may be ordered to immediately rectify violations or face fines of up to 10,000 RMB. We cannot guarantee that we have met or will continue to meet all applicable laws and regulations. Furthermore, the Chinese government imposes restrictions on foreign ownership.

Therefore, future government actions, including interventions or influences on any decisions we make at any point in time, or controls on overseas securities offerings and foreign investments by issuers within China, may force us to make significant operational adjustments, potentially limit or completely hinder our ability to issue or continue issuing securities to investors, and/or may result in a substantial decline in the value of such securities or render them worthless.

Our board of directors is typically responsible for monitoring risks arising from cybersecurity threats (if any). Since our initial public offering (IPO), we have not encountered any cybersecurity incidents.

The Group collects and stores certain business and operational data, including information about its distributors and suppliers. Although we do not collect consumer or retail customer data, we are still subject to the data protection and cybersecurity laws and regulations applicable in China and any other jurisdictions where we operate. These laws regulate the collection, storage, use, and security of data and impose significant compliance obligations.

Although we have implemented data security measures to protect sensitive business information and comply with applicable laws, our systems remain vulnerable to cyberattacks such as hacker intrusions, malware, or phishing attacks. These threats may lead to unauthorized access, data breaches, or business disruptions. Cyberattacks targeting our contractors or third-party service providers could further increase the risk of data loss or misuse.

Data protection regulations in China and globally are becoming increasingly stringent and complex, with new requirements constantly being introduced, such as China’s Personal Information Protection Law (PIPL) and Data Security Law. Failure to comply with these or other evolving data protection laws may result in substantial fines, penalties, operational restrictions, and reputational damage.

Compliance with these laws requires sustained investments in security infrastructure, training programs, and monitoring systems. Furthermore, future regulatory changes in data protection laws—such as stricter requirements for data retention, transmission, or storage—may incur additional costs or operational adjustments. Failure to comply could result in investigations, enforcement actions, or restrictions on our data collection and usage capabilities, potentially harming our business operations, financial health, and overall performance.

While we are committed to complying with applicable data protection laws, uncertainties in their interpretation and enforcement, along with potential cybersecurity risks, may adversely affect our operations and reputation. Any significant data breach or failure to comply with data protection regulations could have substantial negative impacts on our business.

As of the reporting date of this annual report, we have not received any notification from authorities identifying us as operators of critical information infrastructure, or requiring us to undergo cybersecurity reviews or network data security reviews by the Cyberspace Administration of China, or obtaining licenses from the Cyberspace Administration of China. Given that we are not (i) engaged in activities that affect or may affect national security; (ii) operators of critical information infrastructure procuring network products and services that may affect national security; or (iii) operators of network platforms holding personal information data of over one million users. However, there remains uncertainty regarding how the “Cybersecurity Review Measures” and the “Security Review Draft” will be interpreted or implemented, and whether China regulatory authorities (including the Cyberspace Administration of China) will issue new laws, regulations, rules, or detailed implementation guidelines or interpretations related to the “Cybersecurity Review Measures” and the “Security Review Draft.” If any such new laws, regulations, rules, implementation guidelines, or interpretations come into effect, we expect to take all reasonable measures and actions to ensure compliance and minimize any adverse impacts caused by such laws.

Exchange rate fluctuations may result in foreign exchange conversion losses.

The exchange rate fluctuations of the RMB against the US dollar and other currencies are influenced by changes in Chinese government policies and largely depend on domestic and international economic and political conditions as well as supply and demand conditions in local markets. In July 2005, the Chinese government changed its decades-long policy of pegging the RMB to the US dollar, after which the RMB appreciated by more than 20% against the US dollar over the next three years. From July 2008 to June 2010, this appreciation trend ceased, and the RMB-to-US-dollar exchange rate remained within a narrow range. Since June 2010, the RMB-to-US-dollar exchange rate has experienced fluctuations, sometimes with significant and unpredictable volatility. With the development of foreign exchange markets and the advancement of interest rate liberalization and RMB internationalization, the Chinese government may announce further adjustments to the exchange rate regime in the future, and we cannot guarantee that the RMB will not appreciate or depreciate substantially against the US dollar. It is difficult to predict how market forces or China and the US government’s policies will affect the RMB-to-US-dollar exchange rate in the future.

Any depreciation of the Renminbi may adversely affect the value of our shares and dividends paid in foreign currencies. Additionally, we face challenges in identifying cost-effective tools to reduce foreign currency risk exposure. These factors could significantly impact our business operations, financial position, operational performance, and future prospects, while diminishing the foreign currency value of our shares and the dividends paid in foreign currencies.

Risks Related to Intellectual Property and Legal Litigation

We may face intellectual property infringement claims, which could entail substantial defense costs and potentially disrupt our business operations.

We cannot be certain that any aspect of our operations or business will not infringe upon or otherwise violate trademarks, patents, copyrights, proprietary technologies, or other intellectual property held by third parties in the past or in the future. In the future, we may from time to time face legal proceedings, claims, or penalties related to intellectual property rights held by others. Additionally, there may be third-party trademarks, patents, copyrights, proprietary technologies, or other intellectual property rights that we may have infringed without knowledge. The rights holders of such intellectual property may assert their rights against us in China, the United States, or other jurisdictions. If any third party files an infringement lawsuit, regardless of the validity of their claims, we may be forced to divert management time and other resources from our business and operations to address these lawsuits.

In addition, the application and interpretation of China’s intellectual property laws, as well as the procedures and standards for granting trademarks, patents, copyrights, know-how, or other intellectual property rights in China, continue to evolve and remain uncertain. We cannot guarantee that Chinese courts or regulatory authorities will endorse our analysis. If we are found to have infringed upon others’ intellectual property rights, we may face legal liabilities and penalties for the infringement, be prohibited from using such intellectual property rights, and may also be required to pay licensing fees or develop our own alternatives. Consequently, our business and operational performance may suffer significant adverse impacts.

We may not be able to prevent others from unauthorized use of our intellectual property rights, which could harm our business and competitive position.

We believe our trademarks, domain names, proprietary technologies, and similar intellectual property rights are crucial to our success. We rely on a combination of intellectual property laws and contractual arrangements, including confidentiality and non-compete agreements with employees and other personnel, to protect our proprietary rights. Despite these measures, any of our intellectual property rights may still be challenged, invalidated, circumvented, or infringed upon, or they may not be sufficient to provide us with a competitive advantage. For example, we regularly file trademark registration applications in China, but these applications may be delayed or unsuccessful and may be challenged by third parties. Due to China’s “first-to-file” trademark registration system and the existence of similar registered trademarks in the same categories, we may not be able to successfully register trademarks in these categories and face the risk of being deemed to infringe on third-party trademark rights. Additionally, for trademarks we have not registered in China, we may not be able to prevent third parties from using our brand. Other parties are also using trademarks similar to ours. We consider our trademarks to be essential to our business. We are filing revocation applications against certain existing trademarks held by third parties on grounds of insufficient use. However, we cannot guarantee the success of these applications or the successful registration of our trademarks.

If any third party files a trademark infringement lawsuit against us for using any unregistered trademarks, we may face civil and administrative liabilities under China’s Trademark Law. We may also be ordered to cease any products accused of or found to infringe upon the legitimate rights and interests of third parties, or to redesign our products or processes to avoid infringement claims, and to compensate such third parties for losses up to RMB 5 million, as well as be ordered to eliminate any negative impacts. Additionally, we may face various administrative liabilities, including but not limited to: if the illegal gains exceed RMB 50,000, a fine of up to five times the illegal gains may be imposed; if the illegal gains are less than RMB 50,000, a fine of RMB 250,000 may be imposed. Any such liabilities may disrupt our business operations and have a material adverse impact on our reputation, financial condition, and operating performance. Even if we successfully defend against such claims, legal proceedings may still result in substantial costs and divert management attention.

Meanwhile, intellectual property protection in China remains an evolving legal field. We cannot predict the future developments in this legal domain, including the enactment of new laws, amendments to existing laws, or their interpretations. As a result, we may fail to adequately protect our intellectual property rights, which could adversely affect our revenue and competitive position.

In China, the protection and enforcement of intellectual property rights often face difficulties. The application of relevant laws and regulations depends on judicial interpretations and enforcement, but due to the lack of clear legal guidance, their application may not be consistent. Counterparties may violate confidentiality and non-compete agreements, and we may not have sufficient remedies to address such breaches. As a result, we may not be able to effectively protect our intellectual property rights or enforce our contractual rights in China. Preventing unauthorized use of our intellectual property is both difficult and costly, and the measures we take may not be sufficient to prevent intellectual property theft. If we resort to litigation to enforce our intellectual property rights, such lawsuits may incur substantial costs and divert our management and financial resources. We cannot guarantee success in such lawsuits. Additionally, our trade secrets may be disclosed, obtained by competitors in other ways, or independently discovered by competitors. If our employees or consultants use intellectual property owned by others while working for us, it may lead to disputes regarding related proprietary technology and invention rights. Any failure in protecting or enforcing our intellectual property rights may have a significant adverse impact on our business, financial condition, and operating results.

We may not be able to adequately acquire or maintain our proprietary and intellectual property rights in data or technology.

We cannot guarantee that our employees, consultants, or other relevant parties will comply with confidentiality, non-disclosure, or invention transfer agreements, nor can we ensure the validity of such agreements in controlling access to and distribution of our products/services, specific aspects thereof, or proprietary information. Additionally, we may face third-party challenges to our ownership of intellectual property rights or inventorship claims that we assert as our own. For instance, such challenges might invalidate agreements signed with employees or consultants requiring intellectual property transfers to us, or conflict with their prior contractual obligations to transfer inventions to other employers, former employers, or third parties. While we rely on employment-related work clauses to establish ownership of intellectual property created by employees, certain types of intellectual property may require separate documentation to legally transfer ownership rights to us.

As our patents may expire without extension options, our patent applications could be denied approval. Our patent rights may face challenges including challenges, circumvention, invalidation, or restricted scope, potentially compromising their effectiveness in protecting our interests. More critically, we might fail to prevent others from developing or utilizing competing technologies, which could significantly adversely impact our business operations, financial health, and operational performance.

As of the date of this annual report release, we have registered 13 patents, 85 trademarks, and 6 software program copyrights in the Chinese mainland. Even if our patent applications are approved and we obtain corresponding patents, there remains uncertainty regarding whether these patents may face opposition, circumvention, or invalidation in the future. Additionally, rights under granted patents may not provide us with substantial protection or competitive advantages. The legal measures offered by these protections are limited, and competitors or others may acquire or utilize our intellectual property and proprietary information. Claims under any patent may not be sufficiently broad to prevent others from developing technologies similar to ours or achieving effects comparable to ours. Furthermore, others’ intellectual property may also prevent us from licensing or utilizing our patents. In the fields where we have developed and are developing products, there exists a significant number of patents owned by others and pending patent applications. These patents and patent applications may claim priority over our patent applications and may result in the invalidation of our patent applications. Finally, in addition to individuals who may claim priority, any of our existing patents or pending patent applications may be challenged by others if deemed invalid or unenforceable. Our success depends in part on our ability to acquire, maintain, expand, enforce, and defend the scope of our intellectual property. The patent application process is both costly and time-consuming. We may struggle to file, apply for, maintain, enforce, or license all necessary or desirable patents at reasonable costs, within reasonable timelines, or across jurisdictions where commercial protection holds value. In some cases, we might even fail to secure any protection for our proprietary rights. Any failure to obtain or sustain patent protection and other intellectual property safeguards for our products could significantly harm our business operations, financial health, and overall performance.

In addition to patented technologies, we also rely on our non-patented know-how, trade secrets, processes, and specialized expertise.

We rely on proprietary information—including trade secrets, technical know-how, and confidential data—to protect intellectual property that may not qualify for patents or where non-disclosure is deemed more appropriate. To safeguard such information, we typically enter into confidentiality agreements with employees, consultants, contractors, scientific advisors, and third parties, or incorporate non-disclosure clauses into consulting, service, or employment contracts. However, we cannot guarantee that all potential contacts with our trade secrets or proprietary information have signed such agreements. Even when agreements exist, they may be breached or fail to effectively prevent leaks, third-party infringement, or unauthorized use. Additionally, these agreements often have limited durations and may lack adequate remedies for unauthorized disclosures. Our protection capabilities for trade secrets used by third-party manufacturers and suppliers remain limited, and unauthorized leaks could result in loss of future protection. Furthermore, our proprietary information may be accessed by competitors or third parties conducting independent research. Disputes over ownership of technical know-how and inventions may arise when our employees, consultants, contractors, or third parties utilize third-party intellectual property while working for us. To enforce and define the scope of our proprietary rights, time-consuming and costly litigation may be required. Failure to obtain or maintain protection for our proprietary information could adversely affect our competitive business position. Furthermore, in certain markets where we operate, laws governing trade secret rights may provide minimal or no protection for our trade secrets. If any of our trade secrets are legally obtained or independently developed by competitors or third parties, we will have no legal means to prevent their use in competition. Any disclosure of trade secrets to competitors or third parties—whether lawful or not—along with their independent exploitation, could significantly impair our business operations, financial performance, and overall financial health.

We rely on physical and electronic security measures to protect our proprietary information, but we cannot guarantee that these safeguards provide adequate protection or that they will never be breached. There remains a risk that third parties may gain unauthorized access to our proprietary information, potentially leading to misuse or disclosure that could undermine our competitive advantage. We may fail to detect or prevent unauthorized access or use of our information by third parties, may not take appropriate and timely measures to mitigate damage, or may not be able to mitigate or remedy such damage.

In this section, “we”, “us”, “our” and “CN Healthy” refer to CN Healthy Food Tech Group Corp., a holding company, and its wholly owned subsidiaries.

On September 30, 2025, Iron Horse announced the completion of its business merger with Rosy Sea, a company based in the British Virgin Islands. Rosy Sea is the parent company of CFI. The merged new company will be renamed as CN Healthy Food Tech Group Corp. and listed on the NASDAQ market on October 1, 2025 under the stock codes “UCFI” and “UCFIW”.

CN Healthy Food Tech Group Corp. is a comprehensive enterprise integrating grain biotechnology and health product research and development, production, and sales, focusing on the deep processing of grain raw materials into green ecological products. Our corporate vision is to create a healthy world through AI technology and biotechnology. The product advocates a green, healthy, international, and popular consumption concept, which is widely welcomed by the market. The group is based on the “big health food industry”, mainly engaged in the distribution of natural grain health food channels, providing safe and reliable nutritional protection for health conscious consumers.

Our business began in May 2024, and by December 31, 2025, our main products include cordyceps peptide selenium powder, Baofei granule extract plant drink, Yancui peptide selenium powder, Ganoderma lucidum and matsutake peptide selenium powder, ginseng peptide selenium powder, collagen peptide prebiotic drink, plant essential oil, and Shangshangyi Congee. We manage our business in two operational departments: offline dealer sales and online live streaming sales. Among them, offline dealer sales mainly rely on our extensive dealer channels for distribution, and online live sales mainly sell goods and services through digital coupons through e-commerce and social platforms such as Douyin, Meituan, Kuaishou, etc. As of December 31, 2025 and 2024, offline dealer sales accounted for approximately 86.2% and 94.0% of the consolidated revenue, respectively, while online live streaming sales accounted for approximately 13.8% and 6.0% of the comprehensive revenue, respectively.

Recent Developments

After our company was listed on the NASDAQ Stock Exchange (hereinafter referred to as “NASDAQ”) on October 1, 2025, we received a notification from NASDAQ that they have received a notification from the staff of the China Securities Regulatory Commission (hereinafter referred to as “CSRC”) that the review process for our company’s listing in the United States has not been completed. Accordingly, Nasdaq has suspended the trading of our common stock and warrants, pending Nasdaq’s verification and clarification of the relevant matters with our company. As of the date of issuance of this report, our company has submitted relevant supporting documents to NASDAQ and is awaiting further notification from NASDAQ.

We need to complete the filing procedures related to this corporate merger with the China Securities Regulatory Commission in accordance with the requirements of the “Overseas Listing Application Rules” before its securities are listed on NASDAQ. We submitted the necessary documents related to this corporate merger to the China Securities Regulatory Commission on December 21, 2024. On March 19, 2025, the China Securities Regulatory Commission requested supplementary materials, and we subsequently submitted the supplementary materials on April 2, 2025. As of the date of disclosure of this year’s report, we have not yet obtained the filing notice from the China Securities Regulatory Commission.

We issued an interest-free promissory note of $1,000,000 to non-affiliated lender Jiao Yanjun on September 29, 2025. On September 30, 2025, an interest-free promissory note for $2,018,000 was issued to Underwriter D. Boral Capital, LLC. On September 30, 2025, an interest-free promissory note of $1,421,343 was issued to the Sponsor Bengochea SPAC Sponsors I LLC. The promissory note company has repaid $1,014,000 in the current year, and as of December 31, 2025, the outstanding balance of the promissory note is $454,690. The three notes have all matured, and as of December 31, 2025, a default interest of de minimis has been incurred, which is relatively insignificant compared to the overall financial statements. The company is currently negotiating with all parties to extend the expiration date.

We have established our own production base in September 2025 and officially put it into operation in October. This production base focuses on producing high-end health foods, including Yancui Peptide Selenium Powder, Lingzhi Matsutake Peptide Selenium Powder, and Shanshen Peptide Selenium Powder. Our core products are gradually being self-produced and sold, providing a stable foundation for long-term sustainable operation.

Components of Operating Results

Revenue

Revenue represents the sales of inventories and digital coupons to customers where our performance obligation to transfer a promised good or service to a customer is satisfied at a point in time, when ownership and control have been transferred to the customer. Revenue is reported net of variable consideration, including applicable discounts, estimated returns, allowances, estimated refunds, and service fees.

Revenue from our wholesale distribution segment is comprised of sales of inventories to distributors, and includes shipping and handling charges billed to the distributor. We have determined that distributor agreements that include a minimum purchase volume do not create a material right that gives right to a separate performance obligation as there are no discounts or other incentives provided to the distributor associated with the distribution agreement, or with the minimum purchase volume. Our performance obligation is created as new orders are received from a distributor. We are not obligated to transfer any products until a distributor submits an order specifying the quantity of products it wishes to purchase, which represents an option to purchase additional goods, not variable consideration. As a result, the Company recognizes revenue at the time control of the products ordered transfers to the distributor.

We determined that any variable consideration related to a potential shortfall to a minimum purchase volume at the end of the distributor agreements was deemed to be fully constrained at inception and therefore excluded from the initial transaction price due to the high degree of uncertainty and risk associated with these potential payments as we could not assert that it was probable that a significant reversal in the amount of revenue recognized would not occur. We will recognize any remaining revenue associated with a shortfall to a minimum purchase volume during the period we can assert that it is probable that a significant reversal in the amount of revenue recognized would not occur. We review our variable consideration estimates at the end of each quarter. As of December 31, 2025 and 2024, we could not assert that it was probable that a significant reversal in the amount of revenue recognized would not occur for a potential shortfall to the minimum purchase volume at the end of the in place distributor agreements, which have a remaining term of twelve months.

Additionally, if the minimum purchase volume is not met, we may reassess whether to renew the distribution agreement or maintain the distributor at their current tier, ensuring alignment with our strategic objectives and market conditions.

Revenue from our live-stream sales segment is comprised of sales of digital coupons to customers for goods or services (or for discounts on goods or services) to be provided by third-party merchants. We determined that we are the principal in these transactions as we have complete discretion in establishing the pricing of the digital coupons.

Cost of Revenues

Cost of revenue consists primarily of the cost of inventories where the performance obligation to transfer a promised good or service to the customer is satisfied as of period end.

Operating Expenses

Operating expenses are recorded when incurred and consist of three components — selling expenses, general and administrative expenses and research and development expenses.

Selling Expenses consist primarily of advertising costs on social networking sites and affiliate programs, offline marketing costs, such as television, and online marketing costs, such as search engine marketing.

General and Administrative Expenses consist primarily of compensation expense, including employee benefits, for employees involved in customer service, operations, technology, as well as general corporate functions, such as finance, legal, and human resources. Additional costs include depreciation and amortization, amortization of shares issued for services to certain consultants, rent, utilities, professional fees, travel and entertainment, recruiting, maintenance, certain technology costs and other general corporate costs.

Research and Development Expenses consist primarily of compensation expense, including employee benefits, material costs, testing costs and other expenses related to our investment in the development of new products and services.

Other Income, net

Other income consists primarily of interest income from bank deposits.

Comprehensive Income

Comprehensive income consists of two components, net income and other comprehensive income. The foreign currency translation adjustment results from the translation of the financial statements from an entities functional currency to our reporting currency is reported in other comprehensive income.

Key Factors Affecting Our Performance

Our results of operations and our ability to grow our business over time could be impacted by a number of factors and trends that affect our industry generally, as well as new offerings of products and services we may acquire or seek to acquire in the future. Additionally, our business is concentrated in certain markets, putting us at risk of region-specific disruptions such as adverse economic, regulatory, political, weather and other conditions. See “Risk Factors” elsewhere in this Report for further discussion of risks affecting our business. We believe the factors discussed below are key to our success.

Attracting and Retaining Customers

Our wholesale distribution segment depends on our ability to attract and retain individual distributors to comprise our entire distribution network. Recruiting, onboarding, and training new distributors can be time-consuming and costly, impacting our ability to replace distributors that are underperforming, expand our market share, maintain positive relationships with the end consumer of our products, and sustain financial stability.

Our live-stream sales segment depends on our ability to attract and retain local merchants who are willing to offer us digital coupons to the local merchants’ experiences. Merchants can cancel their unsold digital coupon offerings at any time, and their willingness to continue offering the digital coupons through our live-stream offerings depends on the effectiveness and reach of our live-stream offerings. We are focused on improving the live-stream offerings and merchant value proposition by exploring opportunities to better balance the needs of the local merchant partners, end customers, and CN Healthy.

To grow our business, we must continue to acquire new distributors and local merchants and successfully engage and retain them, including assisting our distributors to engage and retain customers for the distributor’s business. Our marketing strategy aims to preserve liquidity and achieve profitability, while simultaneously attracting long-term customers to fuel a return to growth. We utilize both digital and offline channels to attract new visitors to our website and subsequently convert them into customers. Our marketing costs are largely composed of advertising. At any given time, our advertising efforts may include, social media marketing, keyword search campaigns, affiliate programs, partnerships, campaigns with celebrities and influencers, display advertising, television, radio, video, content, direct mail, email, mobile “push” communications, SMS, and search engine optimization. We expect our marketing expenses to vary from period to period.

Inventory Management

Since our own production base was put into operation in October 2025, our core products have gradually achieved self production and self sales, and the proportion of self production is expected to gradually increase. At present, we still have some products manufactured through OEM or purchased from suppliers. We consider the cooperating manufacturers and suppliers as key partners in the product development process, who are crucial to the group’s supply chain and provide important products to support the group’s continued operation and development. The procurement department rigorously screens suppliers through on-site assessments of their scale, technical capabilities, production capacity, and delivery cycles to ensure they meet the group’s quality standards.

Supplier Arrangement

Since our own production base was put into operation in October 2025, it has solved the supply problems of three main products, ensuring the stability and timeliness of product delivery. With the release of internal production capacity, our dependence on a single or a few external suppliers and the risk of supplier concentration have been effectively alleviated, reflected in a decrease in the number and proportion of suppliers with procurement volume exceeding 10%. This structural optimization has reduced our dependence on specific suppliers and effectively dispersed the risk of supply chain disruptions that may arise from single supplier production capacity, quality, or delivery issues.

Impact of Macroeconomic Conditions

We may be impacted by adverse consequences of the macroeconomic environment, including but not limited to, global economics and geopolitical uncertainty, higher labor costs, labor shortages, government regulations, trade restrictions and tariffs, supply chain challenges and resulting changes in consumer and merchant behavior. We cannot predict whether, or when, such circumstances may improve or worsen or what impact such circumstances could have on our business.

Increasing prices in the component materials for our inventories that we source from our suppliers may impact the availability, the quality and the price of our products, as suppliers search for alternatives to existing materials and increase the prices they charge. Our suppliers may also fail to provide consistent quality of products as they may substitute lower cost materials to maintain pricing levels.

A discrete event impacting a specific supplier, customer, industry or region in which we have a concentrated exposure could negatively impact our results of operations.

Foreign Currency Translation Risk

Our reporting currency is the U.S. dollar and our operations in the PRC use its local currency as the functional currency. Substantially all of our revenue and expenses are in the Chinese Renminbi (“RMB”). We are subject to the effects of exchange rate fluctuations with respect to any such currency. For example, the value of the RMB depends to a large extent on Chinese government policies and China’s domestic and international economic and political developments, as well as supply and demand in the local market.

The consolidated income statements of our operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for our international operations.

The following table summarizes our results of operations for years ended December 31, 2025 and 2024:

Revenue

Total revenue for the year ended December 31, 2025 was $27.8 million, compared to $11.3 million for the same period in 2024, an increase of $16.5 million, or 144.6%. Growth for the period was driven by our life cycle with four additional months of revenue generating activities during the year ended December 31, 2025 as compared to the same period in 2024. We also implemented strategic promotional campaigns and new product launches to reach new customers and increase business with existing customers to drive revenue growth.

Cost of Revenue

Total cost of revenue for the year ended December 31, 2025 was $9.3 million, compared to $3.8 million for the same period in 2024, an increase of $5.5 million, or 145.7%. The increase was primarily driven by a 126.0% increase in revenue from our wholesale distribution segment and the introduction of digital coupons for goods from our live-stream sales segment during 2025. These increases were partially offset by costs savings attributed to bringing production in-house during the fourth quarter of 2025.

Operating Expenses

Total operating expenses for the year ended December 31, 2025 were $6.6 million, compared to $2.0 million for the same period in 2024, an increase of $4.6 million, or 231.6%. The increase was attributable to our focus to scale and grow our business as business operations generated cash flows enabling us to hire additional employees, establish a sales and marketing function, and establish a research and development function that facilitated additional growth in both our customer base and our product offerings. Our operating expenses also increased as a result of certain costs associated with the Business Combination and costs attributed to becoming a public company during September 2025 including, $2.0 million of expenses associated with management advisory services, $0.34 million of additional insurance expense, and $0.09 million of additional audit fees incurred during the year ended December 31, 2025 that were not incurred during the same period in 2024.

Following our listing on the Nasdaq Capital Market on October 1, 2025, Nasdaq notified us that the China Securities Regulatory Commission (the “CSRC”) had not yet completed its process of review of our U.S. listing, and Nasdaq halted trading of our common stock and warrants pending receipt of additional clarification. The trading halt remained in effect as of the filing date of this Quarterly Report.

Risks Related to the Notice of Delist Determination Letter

On July 16, 2026, the Company received a letter (the “Determination Letter”) from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (the “Staff”) notifying the Company that the Staff had determined to delist the Company’s common stock and warrants (the “Listed Securities”) from the Nasdaq Capital Market. The Company timely requested an appeal of the Staff’s determination before the Nasdaq Hearings Panel (the “Panel”). The timely filing of the appeal request stays any suspension or delisting action with respect to the Listed Securities pending the Panel’s decision; however, the trading halt that has been in effect since October 1, 2025 in connection with the CSRC’s review of the Company’s U.S. listing will remain in place notwithstanding the appeal. There can be no assurance that the Panel will grant the Company’s request for continued listing or that the Company will be able to satisfy any conditions that the Panel may impose. If the Company’s securities are ultimately delisted from Nasdaq, such delisting could constitute an event of default or trigger acceleration provisions under our outstanding promissory notes and other contractual arrangements. In addition, the continued trading halt and the Determination Letter, together with the matters described in the immediately following risk factor relating to the CSRC Administrative Penalty Decision, may adversely affect our reputation, our relationships with customers, suppliers, and lenders, and our overall business, financial condition, and prospects.

As disclosed in our current report on Form 8-K filed with the SEC on April 29, 2026, on April 24, 2026, Heilongjiang Zhongneng Liangke Agricultural Technology Co., Ltd. (“Zhongneng Liangke”), a wholly-owned PRC operating subsidiary of the Company, received an Advance Notice of Administrative Penalty (the “Notice”) from the Heilongjiang Regulatory Bureau of the China Securities Regulatory Commission (the “CSRC”). The Notice advised that the CSRC had completed its investigation of the Company’s merger with Iron Horse Acquisition Corp. and subsequent listing on the Nasdaq Capital Market in September 2025, and determined that the Company failed to complete the CSRC’s mandatory offshore listing filing procedures prior to such listing, in violation of Articles 13 and 19(1) of the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), constituting an offense under Article 27(1) of the Trial Measures. On May 7, 2026, Zhongneng Liangke received the final Administrative Penalty Decision (the “Decision”) from the CSRC, whereby the CSRC affirmed and formally imposed fines of RMB 3,000,000 (approximately $440,000) on Zhongneng Liangke and RMB 1,500,000 (approximately $220,000) on Mr. Zhenjun Jiang, the Company’s Chairman and Chief Executive Officer, as the directly responsible executive. These penalties were fully paid on May 24, 2026, and no further amounts are payable by the Company under the Decision. The fine imposed on Mr. Jiang is his personal liability and not an obligation of the Company. The Decision may signal to regulators, investors, and business partners a heightened compliance risk associated with our PRC operations. We cannot predict the extent to which the CSRC’s penalties and the underlying compliance findings may adversely affect our reputation, our relationships with business partners, our ability to conduct business in China, or our financial condition and results of operations.

On July 16, 2026, the Company received the Determination Letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC to delist the Company’s common stock and warrants from Nasdaq Capital Market, and the Company already requested an appeal of the Staff’s determination. The request would stay any suspension of the Listed Securities pending the Panel’s decision, although the trading halt currently in effect would remain in place notwithstanding any appeal. The company has not identified any other significant subsequent events that require adjustment or disclosure.