Powell Max Limited Class A (PMAX) Risk Analysis

We are incorporated under the laws of the British Virgin Islands, and our corporate affairs are governed by our memorandum and articles of association, the BVI Business Companies Act and the common law of the British Virgin Islands. The rights of our shareholders and the fiduciary duties of our directors and officers under BVI law differ from those that would apply to a company incorporated in a jurisdiction in the United States, such as Delaware. In particular, the BVI has a less developed body of securities laws and corporate law precedent than the United States. As a result, our shareholders may have more difficulty protecting their interests in connection with actions taken by our directors, officers or significant shareholders than they would as shareholders of a corporation incorporated in the United States. Although the BVI Business Companies Act provides certain remedies to minority shareholders, including the ability in some circumstances to seek compliance or restraining orders, to apply for leave to bring derivative actions, to pursue unfair prejudice claims and to exercise dissent rights in specified transactions, these remedies are more limited and may be more difficult to pursue than the remedies available to shareholders of companies organized in the United States. The circumstances in which such actions may be brought, the procedural requirements applicable to such actions and the defenses that may be available may all limit the practical ability of our shareholders to protect their interests. Accordingly, our shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. In addition, there is uncertainty as to whether the courts of the British Virgin Islands would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liability provisions of the U.S. federal securities laws or any state securities laws, or would entertain original actions brought in the British Virgin Islands against us or such persons predicated upon those laws. Although the courts of the British Virgin Islands may recognize certain final and conclusive foreign money judgments under applicable common law principles and subject to various conditions and exceptions, they are unlikely to enforce judgments that are penal, punitive or otherwise contrary to BVI public policy. As a result, even if shareholders obtain a judgment against us in a U.S. court, they may not be able to enforce that judgment in the British Virgin Islands or recover against our assets.

We qualify as an "emerging growth company," as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include, among other things, exemption from the auditor attestation requirement under Section 404(b) of the Sarbanes-Oxley Act and certain reduced disclosure obligations. In addition, under the JOBS Act, an emerging growth company may elect to delay the adoption of new or revised accounting standards until such standards apply to private companies. We have not opted out of this extended transition period. As a result, our financial statements may not be comparable to those of public companies that comply with such new or revised accounting standards on an earlier basis. We may remain an emerging growth company until the earliest of the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering, the last day of the fiscal year in which we have total annual gross revenue of at least US$1.235 billion, the date on which we become a large accelerated filer or the date on which we have issued more than US$1.0 billion in non-convertible debt during the prior three-year period. In addition, we are a foreign private issuer under the Exchange Act. As long as we qualify as a foreign private issuer, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic issuers, including the rules regulating proxy solicitations, the rules requiring insiders to report their share ownership and trading activities under Section 16 of the Exchange Act and the requirement to file quarterly reports on Form 10-Q and current reports on Form 8-K. We also benefit from less extensive executive compensation disclosure requirements than those applicable to many U.S. domestic issuers. As a result of our status as both an emerging growth company and a foreign private issuer, our shareholders may not have access to certain information that they may consider important, and some investors may find our Class A Ordinary Shares less attractive. This may make it more difficult for us to attract investors and could adversely affect the market price and liquidity of our Class A Ordinary Shares.

Following the change in beneficial ownership of Bliss On Limited in October 2025, ECF (BVI) Limited acquired indirect beneficial ownership of the ordinary shares of the Company then held through Bliss On Limited, and Ms. Po Man Stella Leung ceased to be our controlling shareholder. As a result, as of the filing date, the identity of our controlling shareholder and the concentration of voting power differ from the disclosure contained in our 2024 annual report. Under 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 its directors be independent and the requirement that its compensation committee and nominating and corporate governance committee consist entirely of independent directors. Although we may not currently rely on these exemptions, we may be entitled to do so for so long as we remain a controlled company. If we elect to rely on the controlled company exemptions, a majority of the members of our board of directors may not be independent directors and our compensation committee and nominating and corporate governance committee may not consist entirely of independent directors. Accordingly, for so long as we remain a controlled company and rely on such exemptions, and during any applicable transition period following a time when we no longer qualify as a controlled company, you may not have the same protections afforded to shareholders of companies that are subject to all of Nasdaq's corporate governance requirements. In addition, our significant shareholders may have interests that differ from those of our public shareholders and may be able to influence or determine the outcome of matters submitted to shareholders for approval, including the election of directors, amendments to our organizational documents, financings, business combinations and other significant corporate transactions. This concentration of ownership could delay, deter or prevent a change in control that other shareholders may believe is beneficial, could deprive our shareholders of an opportunity to receive a premium for their Class A Ordinary Shares and could adversely affect the market price of our Class A Ordinary Shares.

On March 5, 2025, we received a deficiency notice from Nasdaq notifying us that we were not in compliance with the minimum bid price requirement because the closing bid price of our Class A Ordinary Shares had remained below $1.00 per share for 30 consecutive business days. We were initially provided until September 1, 2025 to regain compliance. On September 2, 2025, we received a delisting determination letter from Nasdaq stating that Nasdaq had determined to delist our securities because we failed to regain compliance with the minimum bid price requirement within the prescribed period and failed to satisfy the minimum stockholders' equity requirement for initial listing on the Nasdaq Capital Market. In response, we implemented a 1-for-8 reverse stock split that became effective on October 6, 2025. In addition, on February 5, 2026, Nasdaq notified us that, following changes in the composition of our board and audit committee, we were not in compliance with certain Nasdaq corporate governance and audit committee composition requirements. Although we subsequently reconstituted our board committees and Nasdaq later notified us that we had regained compliance with the applicable Nasdaq listing requirements, there can be no assurance that we will remain in compliance with Nasdaq requirements in the future. If we fail to satisfy Nasdaq's continued listing requirements in the future, our Class A Ordinary Shares may be suspended from trading on, or delisted from, Nasdaq. Any such suspension or delisting could materially reduce the liquidity of our Class A Ordinary Shares, materially adversely affect the market price of our Class A Ordinary Shares, reduce analyst coverage and investor interest in our company, impair our ability to raise additional capital and subject our securities to additional trading restrictions, including the "penny stock" rules.

Our current auditor, WWC, P.C., is based in the United States and is currently subject to PCAOB inspection. However, there can be no assurance that future audit reports will continue to be prepared by an auditor that is fully inspectable by the PCAOB. If the SEC determines that our auditor is located in a jurisdiction where the PCAOB is unable to inspect or investigate the audit work completely, then our securities could become subject to trading prohibitions under the Holding Foreign Companies Accountable Act, as amended, and Nasdaq or another U.S. securities exchange may delist our securities. The regulatory framework in this area has evolved rapidly, including through the HFCA Act, the Accelerating HFCA Act and related PCAOB and SEC rulemaking. Although the PCAOB announced in December 2022 that it had secured complete access to inspect and investigate registered public accounting firms in mainland China and Hong Kong and vacated its previous determination, the situation remains subject to change. If future developments once again prevent the PCAOB from obtaining full access to audit work papers or otherwise cause our auditor to become non-inspectable, our Class A Ordinary Shares could be prohibited from trading in the United States and could be delisted. Any such development would likely have a material adverse effect on the market price and liquidity of our Class A Ordinary Shares.

Because we qualify as a foreign private issuer 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;- the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for short-swing profits; and - Regulation FD regarding selective disclosure of material non-public information. We are required to file an annual report on Form 20-F within four months of the end of each fiscal year and furnish current information on Form 6-K. However, the information we provide is less extensive and less timely compared to that required of U.S. domestic issuers. As a result, investors may not be afforded the same protections or information.

The market price of our Class A Ordinary Shares may experience significant volatility due to factors beyond our control. As a relatively small-cap company with limited trading volume, our shares may be subject to: - large price fluctuations;- low liquidity; and - wide bid-ask spreads. Such volatility may be unrelated to our operating performance and may make it difficult for investors to assess the value of our shares. Factors that may contribute to volatility include: - regulatory developments;- changes in financial performance;- market conditions affecting Hong Kong or China-based issuers;- analyst estimates or changes thereto;- announcements of transactions, financings or strategic initiatives;- management or board changes;- litigation or regulatory actions; and - sales or potential sales of additional shares. Any of these factors may result in significant declines in the market price of our Class A Ordinary Shares and may impair our ability to raise capital.

Although our Class A Ordinary Shares are listed on Nasdaq, we cannot assure you that we will be able to satisfy Nasdaq's continued listing standards in the future. On March 5, 2025, we received a deficiency notice from Nasdaq stating that we were not in compliance with the minimum bid price requirement because the closing bid price of our Class A Ordinary Shares had remained below $1.00 per share for 30 consecutive business days. On September 2, 2025, we received a delisting determination letter from Nasdaq stating that Nasdaq had determined to delist our securities because we failed to regain compliance with the minimum bid price requirement within the prescribed period and failed to satisfy the minimum stockholders' equity requirement for initial listing on the Nasdaq Capital Market. In response, we implemented a 1-for-8 reverse stock split that became effective on October 6, 2025. In addition, on February 5, 2026, Nasdaq notified us that, following changes in the composition of our board and audit committee, we no longer satisfied certain Nasdaq corporate governance and audit committee composition requirements. Although we subsequently reconstituted our board committees and Nasdaq later notified us that we had regained compliance with the applicable Nasdaq listing requirements, there can be no assurance that we will remain in compliance with Nasdaq requirements in the future. Further, on April 15, 2026, we announced that we would implement a 1-for-10 reverse stock split of our Class A Ordinary Shares, effective April 17, 2026, in order to increase the market price per share of our Class A Ordinary Shares to a level above the Nasdaq minimum bid price requirement for continued listing on the Nasdaq Capital Market. This further reflects the continuing risk that we may face challenges in satisfying Nasdaq's continued listing requirements in the future. If our Class A Ordinary Shares are suspended from trading on, or delisted from, Nasdaq, the market liquidity of our Class A Ordinary Shares could be materially reduced, the market price of our Class A Ordinary Shares could decline materially, we could become subject to the "penny stock" rules, analyst coverage and investor interest in our company could decrease and our ability to raise additional capital through the public or private sale of equity or debt securities could be materially adversely affected. In addition, if our securities were no longer listed on Nasdaq, they would no longer qualify as "covered securities" under the National Securities Markets Improvement Act of 1996, and we would become subject to securities regulation in each state in which we offer our securities, which could increase our compliance costs and regulatory burden.

Historically, our share capital structure included both Class A Ordinary Shares and Class B Ordinary Shares. Under our constitutional documents then in effect, holders of Class A Ordinary Shares and Class B Ordinary Shares voted together as a single class on matters submitted to a vote of shareholders, except as otherwise required by law or our memorandum and articles of association. Each Class A Ordinary Share carried one vote and each Class B Ordinary Share carried twenty votes. Each Class B Ordinary Share was convertible into one Class A Ordinary Share at the option of the holder, while Class A Ordinary Shares were not convertible into Class B Ordinary Shares. This structure resulted in concentrated voting control in the hands of holders of Class B Ordinary Shares. In late 2025, the ultimate beneficial ownership of the Company changed when Ms. Po Man Stella Leung sold all of the issued share capital of Bliss On Limited to ECF (BVI) Limited. As a result, Ms. Leung ceased to be our controlling shareholder and ECF (BVI) Limited acquired indirect beneficial ownership of the ordinary shares then held through Bliss On Limited. As of December 31, 2025, after giving retroactive effect to the 1-for-8 reverse share split effected on October 6, 2025 and the 1-for-10 reverse share split effected on April 17, 2026, we had 264,991 Class A Ordinary Shares outstanding and no Class B Ordinary Shares outstanding. Accordingly, the dual-class share structure and the associated disproportionate voting rights no longer exist as of that date. In January 2026, our shareholders approved amendments to our capital structure to authorize Class C Ordinary Shares, and in connection with the January 2026 private placement we issued a substantial number of Class C Ordinary Shares and related warrants. Holders of Class C Ordinary Shares generally do not have voting rights on general shareholder matters, except at separate meetings of Class C shareholders, but such shares are convertible into Class A Ordinary Shares and therefore may result in significant dilution to holders of our Class A Ordinary Shares. As a result, our capital structure has changed materially since our initial public offering and may continue to change. Our outstanding securities and the rights attached to them may concentrate voting power, limit the ability of holders of our Class A Ordinary Shares to influence corporate matters and increase the risk of substantial dilution. In addition, our existing shareholders, including significant holders, may have interests that differ from those of our public shareholders and may influence or determine the outcome of matters submitted to shareholders for approval, including the election of directors, amendments to our memorandum and articles of association, financings, business combinations and other significant corporate transactions. This concentration of ownership and the rights associated with our share capital structure could have the effect of delaying, deterring or preventing a change in control or other transaction that holders of our Class A Ordinary Shares may view as beneficial, could deprive such holders of an opportunity to receive a premium for their shares and could adversely affect the market price of our Class A Ordinary Shares. We cannot predict whether our share capital structure, concentrated ownership, or the existence of multiple classes of ordinary shares will result in a lower or more volatile market price for our Class A Ordinary Shares, in adverse publicity or in reduced interest from investors or market participants. Certain index providers and investment funds have historically limited or restricted inclusion of companies with multi-class share structures in particular indices or investment strategies. To the extent our capital structure makes us less attractive to index providers, mutual funds, exchange-traded funds or other investors, the market price and liquidity of our Class A Ordinary Shares could be adversely affected.