{"url_path":"/sec/rajaf/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 Key Information**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1885680/0001213900-26-057774-index.html","accession_number":"0001213900-26-057774","cik":"0001885680","ticker":"RAJAF","issuer_name":"Cordyceps Sunshine Biotech Holdings Co., Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1885680/0001213900-26-057774-index.html","primary_entity_key":"0001885680","primary_entity_name":"Cordyceps Sunshine Biotech Holdings Co., Ltd."},"word_count":5680,"has_tables":true,"body_markdown":"**Item\n3. Key Information**\n\n \n\n**3.A. [Reserved]**\n\n \n\n**3.B. Capitalization and Indebtedness**\n\n \n\nNot applicable for annual reports on Form 20-F.\n\n \n\n**3.C. Reasons for the Offer and Use of Proceeds**\n\n \n\nNot applicable for annual reports on Form 20-F.\n\n \n\n**3.D. Risk Factors**\n\n \n\n**Risk Factor Summary**\n\n** **\n\nOur business is subject\nto a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business,\nfinancial condition, results of operations, cash flows, and prospects. These risks are discussed more fully below and include, but are\nnot limited to, risks related to:\n\n \n\n**Risks Relating to Doing Business in Taiwan**\n\n \n\n**Risks and uncertainties related to doing\nbusiness in Taiwan, beginning on page 3 of this annual report, include but are not limited to the following:**\n\n \n\n \n●\nWe are subject to export regulations in Taiwan, and any adverse regulatory action may materially adversely affect our financial condition and business operations.\n\n \n\n \n●\n\nInstability in international markets or foreign currency fluctuations\ncould adversely affect our results of operations.\n\n \n\n \n●\nWe depend on single-source suppliers for some of the products we sell.\n\n \n\n \n●\nLaws and regulations that could affect the business in which we operate may be enacted, which could result in a delay or cessation of our marketing and sales activities, or the imposition of additional costs that could hinder our ability to achieve and maintain profitable operations.\n\n \n\n \n●\nBecause we sell and distribute all of our products outside of the U.S., the Company is subject to the risks of doing business internationally, including periodic foreign economic downturns and political instability, which may adversely affect the Company’s revenue and cost of doing business in Taiwan.\n\n \n\n1\n\n \n\n \n\n**Risks Relating to Our Business and Industry**\n\n \n\n**Risks and uncertainties relating to our\nbusiness and industry, beginning on page 4 of this annual report, include but are not limited to the following:**\n\n \n\n \n●\nOur current business is significantly based on a few products, which currently account for most of our revenues, and we may not be able to generate significant revenue if these products fail.\n\n \n\n \n●\nOur sales and reputation may be affected by product liability claims, product recalls, pest contamination risks, or adverse publicity in relation to our products.\n\n \n\n \n●\nOur past results may not be indicative of our future performance and evaluating our business and prospects may be difficult.\n\n \n\n \n●\nWe had only one major supplier who supplied us the raw materials for our products for the fiscal years ended December 31, 2025, 2024, and 2023.\n\n \n\n \n●\nWe may require substantial additional funding in the future for our ability to continue as a going concern. There is no assurance that additional financing will be available to us. If we were unable to meet our future funding requirements for working capital and for general business purposes, our business results and our financial position would be adversely affected.\n\n \n\n**Risks Relating to Our Ordinary Shares**\n\n \n\n**Risks and uncertainties relating to our\nordinary shares, beginning on page 7 of this annual report, include but are not limited to the following:**\n\n \n\n \n●\nThe highly concentrated ownership and voting power of the Company may impact shareholders’ interests in the Company.\n\n \n\n \n●\n\nWe have incurred increased costs as a result of being a public company;\nwe will incur more cost after we cease to qualify as an “emerging growth company.”\n\n \n\n \n●\nIf we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.\n\n \n\n \n●\nThe market price for the ordinary shares may be volatile.\n\n \n\n2\n\n \n\n \n\n**Risks Relating to Doing Business in Taiwan**\n\n \n\n**We are subject to export regulations in\nTaiwan, and any adverse regulatory action may materially adversely affect our financial condition and business operations.**\n\n \n\nWe export dietary supplements products outside\nTaiwan to Hong Kong and mainland China. Our business is subject to export regulations in Taiwan and other jurisdictions where our products\nare transported to. Any change in import and export laws and regulations in the pertinent jurisdictions may impose administrative and\nfinancial burdens to our operations. In addition, any adverse regulatory actions may delay our business transactions, divert our management\nattention to ordinary operations and therefore materially and adversely affect our financial condition and performance results.\n\n \n\n**Instability in international markets, or\nforeign currency fluctuations could adversely affect our results of operations.**\n\n \n\nWe generate a significant amount of our revenue\nfrom outside the United States. As a result, we face currency and other risks associated with our international sales. We are exposed\nto foreign currency exchange rate fluctuations due to transactions denominated primarily in NTD, which may potentially reduce the U.S.\ndollars we receive for sales denominated in any of these foreign currencies, and/or increase the U.S. dollars we report as expenses in\nthese currencies, thereby affecting our consolidated results of operations. Fluctuations between the currencies in which we do business\nhave caused and will continue to cause foreign currency transaction gains and losses. We cannot predict the effects of currency exchange\nrate fluctuations upon our future operating results because of the number of currencies involved, the variability of currency exposures,\nand the volatility of currency exchange rates.\n\n \n\nIn addition to foreign currency exchange rate\nfluctuations, there are a number of additional risks associated with our international operations, including those related to:\n\n \n\n \n●\nThe imposition of or increase in import or export duties, surtaxes, tariffs, or customs duties;\n\n \n \n \n\n \n●\nThe imposition of import or export quotas or other trade restrictions;\n\n \n \n \n\n \n●\nForeign tax laws and potential increased costs associated with overlapping tax structures;\n\n \n \n \n\n \n●\nCompliance with various U.S. and foreign laws, including the Foreign Corrupt Practices Act, and import/export laws;\n\n \n \n \n\n \n●\nLonger accounts receivable cycles in certain foreign countries, whether due to cultural, economic, or other factors;\n\n \n \n \n\n \n●\nChanges in regulatory requirements in international markets in which we operate; and\n\n \n \n \n\n \n●\nEconomic and political instability in international markets, including concerns over excessive levels of sovereign debt and budget deficits in countries where we market our products that could result in an inability to pay or timely pay outstanding payables.\n\n \n\n**We depend on single-source suppliers for\nsome of the products we sell.**\n\n \n\nSome of our products are currently provided by\nonly one vendor or a single-source supplier. In addition, we do not have long-term contracts with our third-party suppliers of some of\nthe products we sell, and we do not carry a significant inventory of most of our products. Establishing additional or replacement suppliers\nfor these products could take a substantial amount of time.\n\n \n\nIf we must switch to replacement suppliers, we\nwill face delays, and the delivery of our products could be interrupted for an extended period. Our dependence upon others for the manufacture\nof our products may adversely affect our future profit margins.\n\n** **\n\n3\n\n \n\n** **\n\n**Laws and regulations that could affect the\nbusiness in which we operate may be enacted, which could result in a delay or cessation of our marketing and sales activities, or the\nimposition of additional costs that could hinder our ability to achieve and maintain profitable operations.**\n\n* *\n\nCurrent laws and regulations with respect to our\nbusiness, and additional laws and regulations that may be enacted in the future, could impose new and/or unexpected operational considerations\nor constraints upon us. Complying with existing laws or regulations may require significant time and resource allocation. We must remain\ncognizant of the legislative and regulatory landscape in the countries in which we operate. Compliance with these regulations, when applicable,\nincreases the research and development and production costs, and could make our proposed products and services less attractive to potential\ncustomers.\n\n \n\n**Because we sell and distribute all of our\nproducts outside of the U.S., the Company is subject to the risks of doing business internationally, including periodic foreign economic\ndownturns and political instability, which may adversely affect the Company’s revenue and cost of doing business in Taiwan.**\n\n \n\nWe sell and distribute all of our products outside\nthe U.S. U.S. or Asian economic downturns may affect our results of operations in the future. Additionally, other facts relating to the\noperations of the Company’s business outside of the U.S. may have a material adverse effect on the Company’s business, financial\ncondition and results of operations, including:\n\n \n\n \n●\ninternational economic and political changes;\n\n \n\n \n●\nthe imposition of governmental controls or changes in government regulations, including tax laws, regulations, tariffs and treaties;\n\n \n\n \n●\nchanges in, or impositions of, legislative or regulatory requirements regarding the nutraceutical industry;\n\n \n\n \n●\ncompliance with U.S. and international laws involving international operations, including the Foreign Corrupt Practices Act and export control laws;\n\n \n\n \n●\nrestrictions on transfers of funds and assets between jurisdictions; and\n\n \n\n \n●\n\nChina-Taiwan geo-political instability and China-U.S. political\ninstability.\n\n \n\nAs the Company continues to operate its business\nglobally, its success will depend, in part, on its ability to anticipate and effectively manage these risks. The impact of any one or\nmore of these factors could materially and adversely affect the Company’s business, financial condition and results of operations.\n\n \n\n**Risks Relating to Our Business and Industry**\n\n \n\n**Our current business is significantly based\non a few products, which currently account for most of our revenues, and we may not be able to generate significant revenue if these products\nfail.**\n\n \n\nMost of our sales for the fiscal years ended December\n31, 2025, 2024 and 2023 came from a few products, the Cattle camphor mushroom and the Cordyceps, and our business may suffer a material\nadverse impact if our manufacture and sale of the Cattle camphor mushroom is disrupted due to supply chain disruption, extreme weather\nconditions, change in demand, heightened regulatory requirements. If we experience difficulties or obstacles in the manufacture and sale\nof the Cattle camphor mushroom, we may not be able to generate significant revenues or any revenue at all, our business may fail, and\nyou may lose all or part of your investment in our company.\n\n \n\n**We may not be able to grow and harvest sufficient\nCattle camphor mushroom to satisfy our production requirements.**\n\n \n\nOur Cattle camphor mushroom business and financial\nresults significantly depend on maintaining a consistent and cost-effective supply of Cattle camphor mushroom. While we have implemented\nmeasures to mitigate risks, the availability, size and quality of Cattle camphor mushroom for the production of our products are subject\nto risks inherent to growing, such as size, quality, and yield fluctuation caused by technical problems of growing, pest and disease problems,\nand other factors beyond our control. Although our cattle camphor carriers can be reused, and we can independently manage nutrient solutions\nand strains, unforeseen disruptions or damage could still impact our supply. We may not be able to find in a timely manner any third party\nsuppliers who could provide us with sufficient materials to meet our production needs if we are not able to grow and harvest sufficient\nCattle camphor mushroom. Any interruptions to or decline in the amount or quality of our Cattle camphor mushroom supply could materially\ndisrupt our production and adversely affect our business and financial condition and financial prospects.\n\n \n\n4\n\n \n\n \n\n**The regulations on Cattle camphor mushroom\nin Taiwan may be changed in the future.**\n\n \n\nCattle camphor mushroom falls under the category\nof food products in Taiwan, which is governed by the Food Safety and Hygiene Management Act. According to this act, specific labeling\nrequirements for product packaging include: (i) a warning message in Chinese stating, “For infants, pregnant women, and breastfeeding\nmothers, please consult a physician or medical professional before consuming this product,” and (ii) clear indication on the packaging\nof the parts of the Cattle camphor mushroom used as raw materials, whether they are the fruiting body or mycelium, and their cultivation\nmethod. We are not required to obtain special licenses from the Taiwan government to distribute Cattle camphor mushroom.\n\n \n\nNotwithstanding the above, it is uncertain when\nand whether the Company will be required to obtain license from the Taiwan government to distribute Cattle camphor mushroom in the future,\nand even when such license is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain\nlicense from any of the Taiwan government and has not received any denial to distribute our products, our operations could be adversely\naffected, directly or indirectly, by future laws and regulations.\n\n \n\n**Our sales and reputation may be affected\nby product liability claims, product recalls, pests contamination risks, or adverse publicity in relation to our products.**\n\n \n\nThe sale of products for human consumption involves\nan inherent risk of injury to consumers. We face risks associated with product liability claims, litigation, or product recalls, if our\nproducts cause injury, or become adulterated or misbranded. Our products are subject to product tampering, and to contamination risks,\nsuch as mold, bacteria, insects, and other pests, and off-flavor contamination during the various stages of the procurement, production,\ntransportation and storage processes. If any of our products were to be tampered with, or become tainted in any of these respects and\nwe were unable to detect this, our products could be subject to product liability claims or product recalls. We cannot predict what impact\nsuch product liability claims or resulting negative publicity would have on our business or on our brand image. The successful assertion\nof product liability claims against us could result in potentially significant monetary damages, diversion of management resources and\nrequire us to make significant payments and incur substantial legal expenses.\n\n \n\nWe do not have product liability insurance and\nhave not made provisions for potential product liability claims. Therefore, we may not have adequate resources to satisfy a judgment if\na successful claim is brought against us. Even if a product liability claim is not successfully pursued to judgment by a claimant, we\nmay still incur substantial legal expenses defending against such a claim. Finally, serious product quality concerns could result in governmental\naction against us, which, among other things, could result in the suspension of production or distribution of our products, loss of certain\nlicenses, or other governmental penalties. In addition, product liability claims could have a material adverse effect on the demand for\nour products and on our business goodwill and reputation.\n\n \n\n**We compete in an industry that is brand-conscious,\nand unless we are able to establish and maintain brand name recognition our sales may be negatively impacted.**\n\n \n\nOur business is substantially dependent upon awareness\nand market acceptance of our products and brand by our targeted consumers. Although we believe that we have made progress towards establishing\nmarket recognition for our brand “Kasaer” in the Cattle camphor mushroom products industry, it is too early to determine whether\nour products and brand will achieve and maintain satisfactory levels of acceptance by our customers.\n\n \n\n**Expansion of our business may put pressure\non our management and operational infrastructure may impede our ability to meet any potential increased demand for our products and possibly\nhurting our future operating results.**\n\n \n\nOur business plan is to grow our operations to\nmeet anticipated growth in demand for our products. Growth in our business may place a significant strain on our personnel, management,\nfinancial systems and other resources. The evolution of our business also presents numerous risks and challenges, including:\n\n \n\n \n●\nour ability to successfully and rapidly expand sales to potential new distributors in response to potentially increasing demand;\n\n \n\n \n●\nthe costs associated with such growth, which are difficult to quantify, but could be significant; and\n\n \n\n \n●\nrapid technological change.\n\n \n\nTo accommodate any such growth and compete effectively,\nwe may need to obtain additional funding to improve information systems, procedures and controls and expand, train, motivate and manage\nour employees, and such funding may not be available in sufficient quantities, if at all. If we are not able to manage these activities\nand implement these strategies successfully to expand to meet any increased demand, our operating results could suffer.\n\n \n\n5\n\n \n\n \n\n**Our past results may not be indicative of\nour future performance and evaluating our business and prospects may be difficult.**\n\n \n\nWe have a limited operating history. We may not\nbe able to sign long-term agreements with customers, and our past operating results may not provide a meaningful basis for evaluating\nour business, financial performance and prospects.\n\n \n\n**We depend heavily on key personnel, and\nturnover of key employees and management could harm our business.**\n\n \n\nOur future business and results of operations\ndepend in significant part upon the continued contributions of our key technical and management personnel. The expertise of management\nand technical innovation of the company give it a strong competitive advantage. We do not maintain key person insurance on the individuals.\nThe loss of any of the key employees’ services or any of our other management poses a risk to our business. We may not be able to\nattract or retain qualified management on acceptable terms in the future due to the intense competition for qualified personnel in our\nindustry and as a result, our business could be adversely affected.\n\n \n\nWe consider our major customers in each period\nto be those that accounted for more than 10% of our revenue in such period. We had one major customer, who accounted for 43.81% of our\nrevenue for the fiscal year ended December 31, 2025, among which one related party customer accounted for 14.08% of the revenue. We had\none major customer, who accounted for 29.81% of our revenue for the fiscal year ended December 31, 2024, among which one related party\ncustomer accounted for 4.22% of the revenue. We had one major customer, who accounted for 14.37% of our revenue for the fiscal year ended\nDecember 31, 2023, among which one related party customer accounted for 14.37% of the revenue.\n\n \n\nThere can be no assurance that we will maintain\nor improve the relationships with customers who do not have long-term contracts with us. If we cannot maintain long-term relationships\nwith our major customers or replace major customers from period to period with equivalent customers, the loss of such sales would have\nan adverse effect on our business, financial condition and results of operations.\n\n \n\n**We may require substantial additional funding\nin the future for our ability to continue as a going concern. There is no assurance that additional financing will be available to us.\nIf we were unable to meet our future funding requirements for working capital and for general business purposes, our business results\nand our financial position would be adversely affected.**\n\n \n\nThe financial statements have been prepared “assuming\nthat we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments\nin the ordinary course of business.\n\n \n\nThe following factors among others raise substantial\ndoubt about the Company’s ability to continue as a going concern for a reasonable period of time.\n\n \n\n \n●\nThe Company has not yet established an ongoing source of revenues and cash flows sufficient to cover the operating costs and allow it to continue as a going concern.\n\n \n\n \n●\n\nThe Company generated net loss of $154,822, net loss of $226,258,\nand net income of $751,609 for the years ended December 31, 2025, 2024, and 2023, respectively.\n\n \n\n \n●\n\nAs of December 31, 2025, the Company had an accumulated deficit of\n$854,046.\n\n \n\n \n●\n\nThe Company incurred operating cash outflow of $35,845 and\ngenerated operating cash inflows of $312,006 and $359,724 for the years ended December 31, 2025, 2024, and 2023,\nrespectively.\n\n \n\n \n●\n\nThe Company had negative working capital of $4,194,320 and $4,385,043\nas of December 31, 2025 and 2024, respectively.\n\n \n\nIn order to continue as a going concern, we will\nneed, among other things, additional capital resources. Our plan is to obtain capital from management to meet our minimal operating expenses\nand seek third party equity and/or debt financing. However, management cannot provide any assurances that we will be successful in accomplishing\nany of our plans. There is no assurance that additional financing will be available to us. If we were unable to meet our future funding\nrequirements for working capital and for general business purposes, we could experience operating losses and limit our marketing efforts\nas well as decrease or eliminate capital expenditures. If so, our operating results, our business results and our financial position would\nbe adversely affected.\n\n \n\n6\n\n \n\n \n\n**We had only one major supplier who supplied\nthe raw materials for our products for the fiscal year ended December 31, 2025, 2024 and 2023.**\n\n \n\nWe consider our major suppliers in each period\nto be those that accounted for more than 10% of our purchase in such period. We had one major third-party supplier, who accounted for\n100.00% of our supply for the fiscal years ended December 31, 2025, 2024 and 2023.\n\n \n\nOur current sales and distribution arrangements,\nincluding payment terms, are determined on a case-by-case basis. Our sales policy treats related parties and third parties alike. As of\ntoday, we do not have long-term supply contracts with any of our suppliers. In case of disputes, the sales department will consider the\nrequirements of the customers, combine our sales policies, and determine the resolutions which will be finally approved by the management.\nAs of today, we have not had any disputes with the distributors and retailers. However, there can be no assurance that we will maintain\nor improve the relationship with the supplier. If we cannot maintain a long-term relationship with that supplier or replace such supplier\nfrom period to period with equivalent suppliers, there could be an adverse effect on our business, financial condition and results of\noperations.\n\n \n\n**Our inability to protect our intellectual\nproperty may prevent us from successfully marketing our products and competing effectively.**\n\n \n\nFailure to protect our intellectual property could\nharm our brands and our reputation, and adversely affect our ability to compete effectively. Further, enforcing or defending our intellectual\nproperty rights could result in the expenditure of significant financial and managerial resources. We produce, market and sell our products\nusing the brand “Kasaer”. We regard our intellectual property, particularly our trademark to be of considerable value and\nimportance to our business and our success. There can be no assurance that the steps taken by us to protect the proprietary rights will\nbe adequate or that third parties will not infringe or misappropriate our rights. In addition, there can be no assurance that other parties\nwill not assert infringement claims against us, and we may have to pursue litigation against other parties to assert our rights. Any such\nclaim or litigation could be costly, and we may lack the resources required to defend against such claims. In addition, any event that\nwould jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse effect on our ability\nto market or sell our brands, and profitably exploit our products.\n\n \n\n**We do not carry any business interruption\ninsurance or third-party liability insurance for our production facilities.**\n\n \n\nOperation of our facilities involves many risks,\nincluding equipment failures, natural disasters, industrial accidents, power outages, labor disturbances and other business interruptions.\nFurthermore, if any of our products are faulty, then we may become subject to product liability claims or we may have to engage in a product\nrecall. We do not carry any business interruption insurance, product recall or third-party liability insurance for our production facilities\nor with respect to our products to cover claims pertaining to personal injury or property or environmental damage arising from defects\nin our products, product recalls, accidents on our property or damage relating to our operations. As a result, we may be required to pay\nfor financial and other losses, damages and liabilities, including those caused by natural disasters and other events beyond our control,\nout of our own funds, which could have a material adverse effect on our business, financial condition and results of operations.\n\n \n\n**Risks Relating to Our Ordinary Shares**\n\n \n\n**The highly concentrated ownership and voting\npower of the Company may impact shareholders’ interests in the Company.**\n\n \n\nAs of the date of this annual report, Mr. Szu\nHao Huang and Mr. Yenhung Liu, through Dalan Vincent Holdings Limited, indirectly owned approximately 59.3% of our ordinary shares and\nthe voting power of the Company. It is anticipated that Mr. Szu Hao Huang and Mr. Yenhung Liu will continue to own a majority of ordinary\nshares of the Company and, correspondingly, will have the majority of the voting power of the Company. As such, you may not be able to\ninfluence the strategies, management or policies of the Company as you could at a company where the equity ownership is widely distributed.\n\n \n\n7\n\n \n\n \n\n**We have incurred increased costs as a result\nof being a public company, we will incur more cost after we cease to qualify as an “emerging growth company.”**\n\n \n\nWe have become a public company and incurred significant\nlegal, accounting and other expenses that we do not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently\nimplemented by the SEC, imposes various requirements on the corporate governance practices of public companies. As an “emerging\ngrowth company” pursuant to the JOBS Act, we may take advantage of specified reduced reporting and other requirements that are otherwise\napplicable generally to public companies. We expect these rules and regulations to increase our legal and financial compliance costs and\nto make some corporate activities more time-consuming and costlier. After we are no longer an “emerging growth company,” we\nexpect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with increased disclosure\nrequirements.\n\n \n\n**Our ordinary shares may be considered a\n“penny stock” which is subject to restrictions on marketability, so you may not be able to sell your shares.**\n\n \n\nThe SEC has adopted regulations which generally\ndefine “penny stock” to be an equity security that has a market price of less than $5.00 per share or an exercise price of\nless than $5.00 per share, subject to specific exemptions. Although there has not been a public market for our ordinary shares and such\na public market may never develop, our ordinary shares may have a market price of less than $5.00 per share and therefore will be designated\nas a “penny stock” according to SEC rules. This designation requires any broker or dealer selling these securities to disclose\nsome information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably\nsuitable to purchase the securities. These rules may restrict the ability of brokers or dealers to sell the ordinary shares and may affect\nthe ability of investors to sell their ordinary shares. These regulations may likely have the effect of limiting the trading activity\nof our ordinary shares and reducing the liquidity of an investment in our ordinary shares. In addition, investors may find it difficult\nto obtain accurate quotations of the ordinary shares and may experience a lack of buyers to purchase our ordinary shares or a lack of\nmarket makers to support the stock price.\n\n \n\nIf our ordinary shares become tradable in the\nsecondary market, we will be subject to the penny stock rules adopted by the SEC that require brokers to provide extensive disclosure\nto their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity\nof our ordinary shares, which in all likelihood would make it difficult for our shareholders to sell their shares.\n\n \n\n**If we fail to maintain an effective system\nof internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.**\n\n \n\nEffective internal controls over financial reporting\nare necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed\nto prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could\ncause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley\nAct of 2002 (the “Sarbanes-Oxley Act”), or the subsequent testing by our independent registered public accounting firm, if\nand when required, may reveal additional deficiencies in our internal controls over financial reporting that are deemed to be material\nweaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for\nfurther attention or improvement. If in the future we identify new material weaknesses in our internal control over financial reporting,\nincluding at some of our acquired companies, if we are unable to comply with the requirements of Section 404 in a timely manner or assert\nthat our internal control over financial reporting is effective, or if and when applicable, our independent registered public accounting\nfirm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence\nin the accuracy and completeness of our financial reports and the market price of our ordinary shares could be negatively affected, and\nwe could become subject to investigations by the stock exchange on which our securities are then listed, the SEC, or other regulatory\nauthorities, which could require additional financial and management resources. Inferior internal controls could also cause investors\nto lose confidence in our reported financial information, which could have a negative effect on the trading price of our ordinary shares.\n\n \n\n8\n\n \n\n \n\n**The market price for the ordinary shares\nmay be volatile.**\n\n \n\nThe market price for the ordinary shares may be\nvolatile and subject to wide fluctuations in response to factors including the following:\n\n \n\n \n●\nactual or anticipated fluctuations in our quarterly operating results;\n\n \n\n \n●\nchanges in financial estimates by securities research analysts;\n\n \n\n \n●\naddition or departure of key personnel;\n\n \n\n \n●\nfluctuations of exchange rates between NTD and U.S. dollar or other foreign currencies;\n\n \n\n \n●\npotential litigation or administrative investigations;\n\n \n\n \n●\nsales of ordinary shares in large volumes by the Selling Shareholders; and\n\n \n\n \n●\nrelease of transfer restrictions on the outstanding ordinary shares or sales of additional ordinary shares.\n\n \n\nIn addition, the securities market has from time-to-time\nexperienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These\nmarket fluctuations may also materially and adversely affect the market price of our ordinary shares.\n\n \n\n**We may need additional capital, and the\nsale of additional ordinary shares or other equity securities could result in additional dilution to the shareholders and the incurrence\nof indebtedness could increase our debt obligations.**\n\n \n\nWe can give no assurance that our current cash\nand cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the foreseeable\nfuture. We may require additional cash resources due to changed business conditions or other future developments, including any investments\nor acquisitions we may decide to pursue. If our resources are insufficient to satisfy our capital requirements, we may seek to sell additional\nequity securities or obtain a credit facility. The sale of additional equity and equity-linked securities could result in additional dilution\nto our shareholders. We currently plan to satisfy our cash requirements for the next 12 months through earning from our subsidiaries and\nborrowings from our related parties or companies affiliated with our related parties. We believe we can satisfy our cash requirements\nso long as it is able to obtain financing from these affiliated parties. The related parties and affiliates are as follows: (1) Mr. Szu\nHao Huang, Director and CEO of the Company, (2) Mr. Yenhung Liu, Director of the Company, and (3) Gasar\nBiotechnology Co., Ltd, a company which legal representative is Mr. Szu Hao Huang.\n\n \n\nThe incurrence of indebtedness would cause increased\ndebt service obligations and result in operating and financing covenants that could restrict our operations. We cannot assure you that\nfinancing will be available in amounts or on terms acceptable to us, if at all, particularly in the aftermath of global economic crisis.\n\n \n\n**Future sales or issuances, or perceived\nfuture sales or issuances, of substantial amounts of our ordinary shares could adversely affect the price of the ordinary shares.**\n\n \n\nSales, or perceived potential sales, by our existing\nshareholders might make it more difficult for us to issue new equity or equity-related securities in the future at a time and place we\ndeem appropriate. The ordinary shares that have been registered with the SEC are eligible for immediate resale in the public market without\nrestrictions, and the remaining ordinary shares may also be sold in the public market in the future subject to the restrictions contained\nin Rule 144 and Rule 701 under the Securities Act. If any existing shareholders sell a substantial amount of ordinary shares in the future,\nthe prevailing market price for the ordinary shares could be adversely affected.\n\n \n\n**Because we are not subject to compliance\nwith rules requiring the adoption of certain corporate governance measures, our shareholders have limited protections against interested\ndirector transactions, conflicts of interest and similar matters.**\n\n \n\nThe Sarbanes-Oxley Act of 2002, as well as rule\nchanges proposed and enacted by the SEC, the New York Stock Exchange and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, requires\nthe implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate\nmanagement and securities markets and apply to securities which are listed on those exchanges. Because we are not presently required to\ncomply with many of the corporate governance provisions, we have not yet adopted these measures.\n\n \n\nWe do not currently have independent audit or\ncompensation committees. As a result, our director has the ability, among other things, to determine the level of compensation. Until\nwe comply with such corporate governance measures, the absence of such standards of corporate governance may leave our shareholders without\nprotections against interested director transactions, conflicts of interest and similar matters, and investors may be reluctant to provide\nus with funds necessary to expand our operations.\n\n \n\n9\n\n \n\n \n\n**The Company’s ordinary shares represent\nequity interests and are subordinate to the existing and future indebtedness.**\n\n \n\nOur ordinary shares represent equity interests\nin our Company and, as such, rank junior to any indebtedness of our Company, as well as to the rights of any preferred shares that may\nbe issued in the future. In the future, we may incur substantial amounts of debt and other obligations that will rank senior to our ordinary\nshares or to which our ordinary shares will be structurally subordinated."}