OneConstruction Group Limited (ONEG) Risk Analysis

The audit report included in this annual report was issued by Audit Alliance LLP, a Singapore-based accounting firm that is registered with the PCAOB and subject to PCAOB inspection. We have no present intention of dismissing Audit Alliance LLP or engaging any auditor not subject to regular inspection by the PCAOB. There is no guarantee, however, that any future auditor engaged by the Company would remain subject to full PCAOB inspection during the entire term of our engagement. If PRC authorities were to obstruct or otherwise fail to facilitate PCAOB access in the future, the PCAOB may issue a new determination. Currently, our auditor's audit work for us can be inspected by the PCAOB, and we have no operations in mainland China. However, if there is a significant change to current political arrangements between mainland China and Hong Kong, companies operating in Hong Kong like us may face similar regulatory risks as those operating in the PRC, and we cannot assure you that our auditor's audit work for us will continue to be able to be inspected by the PCAOB. If it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are the PCAOB is able to inspect or investigate completely could result in a lack of assurance that our financial statements and disclosures are adequate and accurate. PCAOB inspections may identify deficiencies in auditors' audit procedures and quality control procedures. If the PCAOB were unable to inspect or investigate completely audit work relating to us, investors could be deprived of the benefits of PCAOB oversight, which could result in limitations or restrictions on our access to U.S. capital markets. The HFCA Act was signed into law on December 18, 2020 and requires the SEC to identify issuers whose audit reports are prepared by registered public accounting firms that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor's local jurisdiction. On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements in the HFCA Act. On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to public companies whose shares are registered with the SEC and are identified by the SEC as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and whose audit work that the PCAOB is unable to inspect or investigate. We will be required to comply with these rules if the SEC identifies us as a Commission-Identified Issuer under the HFCA Act. The final amendments require any identified registrant to submit documentation to the SEC establishing that the registrant is not owned or controlled by a government entity in the public accounting firm's foreign jurisdiction, and they also require, among other things, disclosure in the registrant's annual report regarding the audit arrangements of, and government influence on, such registrants. Pursuant to the HFCA Act, our securities may be prohibited from trading on Nasdaq or other U.S. stock exchanges if our auditor cannot be inspected by the PCAOB for two consecutive years, and this ultimately could result in our Ordinary Shares being delisted. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction in connection with their audit work because of a position taken by one or more authorities in that jurisdiction. On November 5, 2021, the SEC approved the PCAOB's Rule 6100, Board Determinations Under the HFCA Act. Rule 6100 provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions. In addition, the PCAOB's report identified the specific registered public accounting firms which are subject to these determinations. On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB has independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. There can be no assurance that we will be able to comply with requirements imposed by U.S. regulators if there is a significant change to current political arrangements between mainland China and Hong Kong or if any component of our auditor's work papers were to become located in mainland China in the future. Delisting our Ordinary Shares would force holders of our Ordinary Shares to sell their Ordinary Shares. The market price of our Ordinary Shares could be adversely affected as a result of anticipated negative impacts of these executive or legislative actions, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating performance. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. As of the date of this annual report, there are no PCAOB Board determinations currently in effect. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider whether to issue a new determination. On December 29, 2022, the Consolidated Appropriations Act, 2023 was signed into law and amended the HFCA Act by reducing the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two. Our registered public accounting firm, Audit Alliance LLP, is not headquartered in mainland China or Hong Kong, and was not identified in this report as a firm subject to the PCAOB's determination. The PCAOB carried out inspection on Audit Alliance LLP at their Singapore office during FY2026 and recently completed, but the results will not be out so soon. Future developments regarding PCAOB access, regulatory cooperation, or changes in applicable law remain uncertain and could materially and adversely affect our access to U.S. capital markets and the market price of our Ordinary Shares.

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over, among other things, the continued listing of securities on Nasdaq, and Nasdaq may use such discretion to apply additional or more stringent criteria for continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities may meet all enumerated criteria for continued listing on Nasdaq. In addition, Nasdaq may use its discretion to deny continued listing or to apply additional and more stringent criteria including, but not limited to, circumstances where a company has engaged an auditor that has not been subject to an inspection by the PCAOB, an auditor that the PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company's audit. Our IPO was relatively small. As of the date of this annual report, the Controlling Shareholder holds a large portion of the Company's outstanding Ordinary Shares, which may result in a limited public float or limited trading liquidity. . Therefore, we may be subject to additional and more stringent criteria of imposed by Nasdaq for our continued listing.

We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. In addition, all of our current directors and officers are residents of countries other than the United States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. Even if holders of our Ordinary Shares are successful in bringing an action of this kind, the laws of the Cayman Islands may render them unable to enforce a judgment against our assets or the assets of our directors and officers. As a result of the foregoing, our shareholders may have greater difficulties in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by the provisions of our Amended and Restated Memorandum and Articles, and by the provisions of the Companies Act and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders, and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of shareholders and the fiduciary responsibilities of our directors and officers under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, shareholders of Cayman Islands companies may face additional procedural and substantive hurdles in seeking to initiate a shareholder derivative actions, including in courts outside of the Cayman Islands. Shareholders of Cayman Islands-exempted companies have no general rights under Cayman Islands law to obtain copies of the register of members or corporate records of the company. They will, however, have such rights as may be set out in the company's articles of association. A Cayman Islands exempted company may maintain its principal register of members and any branch registers in any country or territory, whether within or outside the Cayman Islands, as the company may determine from time to time. There is no requirement for an exempted company to make any returns of members to the Registrar of Companies in the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. However, an exempted company shall make available at its registered office, in electronic form or any other medium, such register of members, including any branch register of members, as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act of the Cayman Islands. This may make it more difficult for holders of our Ordinary Shares to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest. Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practices with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers. As a result of all of the above, our public shareholders may have greater difficulty in protecting their interests in the face of actions taken by management, members of the board of directors, or our Controlling Shareholder than they would as public shareholders of a company incorporated in the United States.

Our Amended and Restated Memorandum and Articles provide that, for the avoidance of doubt and without limiting the jurisdiction of the courts of the Cayman Islands to hear, settle, and/or determine disputes related to the Company, the courts of the Cayman Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of the Company to the Company or the shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act or our Amended and Restated Memorandum and Articles, including any purchase or acquisition of Ordinary Shares, security, or guarantee provided in consideration thereof, or (iv) any action asserting a claim against the Company which if brought in the United States of America would be a claim arising under the internal affairs doctrine (as such concept is recognized under the laws of the United States from time to time). Unless the Company consents in writing to the selection of an alternative forum, the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall, to the extent permitted by law, be the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, regardless of whether such legal suit, action, or proceeding also involves parties other than the Company. Notwithstanding the foregoing, we note that holders of our Ordinary Shares cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 27 of the Exchange Act provides for exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, and Section 22 of the Securities Act provides for concurrent jurisdiction for federal and state court jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, subject to certain exceptions, including with respect to covered class actions. As a result, the exclusive forum provision will not preclude or restrict the scope of exclusive federal or concurrent jurisdiction for actions brought under the Securities Act or the Exchange Act, or the respective rules and regulations promulgated thereunder. Although we believe this provision benefits us by providing consistency in the application of Cayman Islands law in the types of lawsuits to which it applies, the provision may impose additional litigation costs on shareholders in pursuing such claims, particularly if the shareholders do not reside in or near the Cayman Islands. Additionally, the provision may limit our shareholders' ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, or employees, which may discourage the filing of such lawsuits. The courts of the Cayman Islands may also reach different judgments or results than would other courts, including courts where a shareholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our shareholders. Alternatively, if a court were to find the exclusive forum provision contained in our Amended and Restated Memorandum and Articles to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

Under Rule 5615(a)(7) of the Nasdaq Listing Rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including the requirement that a majority of our directors be independent, as defined in the Nasdaq Listing Rules, the requirement that our compensation committee consist entirely of independent directors and the requirement that our director nominees be selected or recommended solely by independent directors. As a controlled company, we are eligible to rely on one or more of these exemptions. To the extent we rely on these exemptions a majority of the members of our board of directors may not be independent directors and our nominating and corporate governance and compensation committees may not consist entirely of independent directors. Accordingly, during any time while we remain a controlled company relying on any such exemption and during any transition period following a time when we are no longer a controlled company, holders of our Ordinary Shares may not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements. Our status as a controlled company could cause our Ordinary Shares to be less attractive to certain investors or otherwise harm our trading price.

Our business is conducted in Hong Kong through our Hong Kong subsidiaries, including our operating subsidiary, OneC Engineering. Our books and records are maintained in Hong Kong dollars, which is the currency of Hong Kong, and the financial statements that we file with the SEC and provide to our shareholders are presented in U.S. dollars. Changes in the exchange rate between the Hong Kong dollar and the U.S. dollar will affect the value of our assets and the results of our operations in U.S. dollars. The value of the Hong Kong dollar against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in Hong Kong's political and economic conditions and perceived changes in the economies of Hong Kong and the United States. Any significant revaluation of the Hong Kong dollar may materially and adversely affect our cash flows, revenue, and financial condition. Further, any offerings of our Ordinary Shares will be denominated in U.S. dollars, and we will need to convert the net proceeds we receive into Hong Kong dollars in order to use the funds for our business. Changes in the conversion rate between the U.S. dollar and the Hong Kong dollar will affect the amount of proceeds we will have available for our business. Since 1983, Hong Kong dollars have been pegged to the U.S. dollar at the rate of approximately HK$7.80 to US$1.00. We cannot assure you that this policy will not be changed in the future. If the linked exchange rate system changes or collapses and Hong Kong dollars suffer devaluation, the Hong Kong dollar cost of our expenditures denominated in foreign currency may increase. This would, in turn, adversely affect the operations and profitability of our business.

The market price for our Ordinary Shares may be volatile and subject to wide fluctuations due to factors, such as: - any financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;         - actual or anticipated fluctuations in our quarterly results of operations;         - changes in financial estimates by securities research analysts;         - negative publicity, studies or reports;- our capability to adopt and maintain technologies, methods or processes used in our industry;         - announcements by us or our competitors of acquisitions, strategic partnerships, joint ventures or capital commitments;         - additions or departures of key personnel;         - fluctuations of exchange rates between the Hong Kong dollar and the U.S. dollar;         - general economic or political conditions in Hong Kong, the PRC and the greater Asia region.         - the limited public float or trading volume of our Ordinary Shares; and         - substantial ownership of our Ordinary Shares by the Controlling Shareholder. In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our Ordinary Shares.

We cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future. If we fail to comply with the applicable listing standards and Nasdaq delists our Ordinary Shares, we and our shareholders could face material adverse consequences, including: - a limited availability of market quotations for our Ordinary Shares;- reduced liquidity for our Ordinary Shares;- a determination that our Ordinary Shares may be deemed "penny stock," which would require brokers trading in our Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Shares;- a limited amount of news about us and analyst coverage of us; and - a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future. The U.S. National Securities Markets Improvement Act of 1996 preempts the states from regulating the offer and sale of certain securities, which are referred to as "covered securities." Because our Ordinary Shares are listed on Nasdaq, such securities are covered securities. Although states are preempted from regulating the offer and sale of our securities, this statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the offer and sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be no longer qualify as covered securities on the basis of such listing and we would be subject to regulations in each state in which we offer our securities.

As of the date of this annual report, our Controlling Shareholder holds 56.25% of our Ordinary Shares. We are a "controlled company" as defined under the Nasdaq Listing Rules because our Controlling Shareholder owns 56.25% of our total issued and outstanding Ordinary Shares, representing approximately 56.25% of the total voting power. The interests of our Controlling Shareholder may not be the same as or may even conflict with other shareholders' interests. For example, our Controlling Shareholder could attempt to delay or prevent a change in control of us, even if such change in control would benefit our other shareholders, which could deprive our shareholders of an opportunity to receive a premium for their Ordinary Shares as part of a sale of us or our assets and might affect the prevailing market price of our Ordinary Shares due to investors' perceptions that conflicts of interest may exist or arise. As a result, this concentration of ownership may adversely affect in the interests of our other shareholders.

Our board of directors may under certain circumstances decline to register a transfer of any Ordinary Share that is not fully paid or on which we have a lien. Further, our board of directors may generally require any shareholder or any person proposing to acquire our shares to provide information to show the right to make the transfer. If any such shareholder or proposed acquirer does not provide such information, or if our board of directors has reason to believe that any certification or other information provided pursuant to any such request is inaccurate or incomplete, our board of directors may delay or decline to register any transfer or to effect any issuance or purchase of shares to which such request is related. Our directors may also decline to register any transfer of any Ordinary Share unless (i) a fee of such maximum as Nasdaq may from time to time determine to be payable (or such lesser sum as our board of directors may from time to time require) has been paid to our Company; (ii) the instrument of transfer is lodged at the registered office or, as the case may be, the transfer office accompanied by the certificate of the Shares to which it relates, and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do); (iii) the instrument of transfer is in respect of only one class of share; (iv) the Ordinary Shares concerned are free of any lien in favor of the Company; and (v) if applicable, the instrument of transfer is properly stamped. If our directors refuse to register a transfer, they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may, on 14 days' notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year. This, however, is unlikely to affect market transactions of the Ordinary Shares purchased by investors in the public market. As the Ordinary Shares have been listed, the legal title to such Ordinary Shares and the registration details of those Ordinary Shares in the Company's register of members are expected to remain with the Depository Trust Company, or DTC, or its nominee. All market transactions with respect to those Ordinary Shares will then be carried out without the need for any kind of registration by the directors, as the market transactions will generally be conducted through the systems of DTC.

The trading market for our shares, if sustained, will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As a relatively new public company, we may be slow to attract research coverage and the analysts who publish information about our Ordinary Shares will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our share price, our share price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our share price or trading volume to decline and result in a significant decline in the value of our shareholders in Ordinary Shares.

Because we qualify as a foreign private issuer under Rule 3b-4 under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: - the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;- the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect to a security registered under the Exchange Act, including Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act, pursuant to Rule 3a12-3(b) under the Exchange Act;;- the short-swing profit recovery provisions under Section 16(b) of the Exchange Act and the short-sale restrictions under Section 16(c) of the Exchange Act, pursuant to Rule 3a12-3(b) under the Exchange Act; however, our directors and officers are subject to the beneficial ownership reporting requirements under Section 16(a) of the Exchange Act; and - the selective disclosure rules by issuers of material nonpublic information under Regulation FD, pursuant to Rule 101(b) of Regulation FD. We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we may from time to time publish our financial results and other material information through press releases or other public disclosures, as required or permitted under applicable SEC and Nasdaq Capital Market. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, holders of our Ordinary Shares may not be afforded the same protections or information that would be made available to them were they investing in a U.S. domestic issuer.

As a foreign private issuer under the Exchange Act, pursuant to Nasdaq Listing Rule 5615(a)(3), we are permitted to take advantage of certain provisions in the Nasdaq Listing Rules that allow us to follow our home country law for certain governance matters. Certain corporate governance practices in our home country, the Cayman Islands, may differ significantly from Nasdaq corporate governance listing standards. Currently, we rely on some home country practices with respect to our corporate governance in lieu of the corporate governance requirements of Nasdaq in respect of the following: - the requirement under Rule 5605(b)(2) of the Nasdaq Listing Rules that the independent directors have regularly scheduled meetings at which only the independent directors are present;- the requirement under Rule 5610 of the Nasdaq Listing Rules that a company adopt one or more codes of conduct applicable to all directors, officers, and employees, and that such codes are publicly available; and         - the requirement under Rule 5635(d) of the Nasdaq Listing Rules that a listed issuer obtain shareholder approval prior to issuing or selling securities (or securities convertible into or exercisable for ordinary shares) that equal 20% or more of the issuer's outstanding ordinary shares or voting power prior to such issuance or sale. Cayman Islands law does not impose a requirement that our independent directors meet regularly without other members present. Nor does Cayman Islands law require that we obtain shareholder approval prior to issuing or selling securities that equal 20% or more of our outstanding Ordinary Shares or voting power. Nor does Cayman Islands law require that we adopt one or more codes of conduct applicable to all directors, officers, and employees, and that such codes are publicly available. We avail ourselves of these exemptions. Therefore, for as long as we remain a "foreign private issuer," holders of our Ordinary Shares will not have the same protections afforded to shareholders of companies that are subject to all of these corporate governance requirements under the Nasdaq Listing Rules.