Quanome Technologies (QNME) risk factors, FY2026 10-K

Risks Related to Our Business and Development

1. 01Our pharmaceutical distribution business depends on our relationships with manufacturers, suppliers and other business partners and our ability to maintain an adequate supply of products
2. 02We face competition and changes in customer demand, procurement practices and pricing that could adversely affect our revenue and profitability
3. 03We may not be successful in expanding into new business areas or markets, and such expansion may expose us to additional operational, regulatory and execution risks
4. 04Our long-term growth and competitiveness are highly dependent on our ability to control costs
5. 05Any failure to obtain or maintain requisite approvals, licenses, permits or other regulatory authorizations applicable to our business could materially adversely affect our business, financial condition and results of operations
6. 06Failure to renew our current leases or locate desirable premises for our facilities, or challenges on the use of certain leased properties by us or our service providers, could materially and adversely affect our business, financial condition and results of operations
7. 07None of our service agreements with our customers is on an exclusive basis
8. 08We may be subject to potential liability in connection with pending or threatened legal proceedings and other matters, which could adversely affect our business, financial condition or results of operations
9. 09Our newly launched AI compute and managed inference business is at an early stage and may not develop as expected
10. 10Our ability to provide AI compute services depends on the availability, performance and cost of specialized computing infrastructure
11. 11Interruptions, failures or security incidents affecting our infrastructure or service providers could disrupt our operations
12. 12We may depend on third-party technology, software, models and infrastructure that we do not control
13. 13Our use and deployment of customer-selected artificial intelligence models may expose us to intellectual property, licensing and other legal risks
14. 14Our business may be subject to evolving export control, sanctions, data protection, cybersecurity and other regulatory requirements, which could restrict our ability to provide AI computing services to certain customers or in certain jurisdictions
15. 15Rapid technological change could impair the value of our infrastructure and require significant additional investment
16. 16Our emerging quantum- and certain other advanced technology activities may become subject to an evolving and potentially complex regulatory framework, which could increase our costs or restrict our activities
17. 17We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws could adversely affect our business, results of operations, financial condition and reputation
18. 18If we fail to implement and maintain effective internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our common stock may be materially and adversely affected
19. 19Our insurance coverage may not be sufficient, which could expose us to significant costs and business disruptions

Risks Related to Our Business Operations in the PRC

1. 20The PRC government may exert significant influence over our PRC subsidiaries’ operations, which could result in a material change in our operations and/or in the value of the securities we are registering, and could cause the value of our securities to significantly decline or become worthless
2. 21The PRC government has implemented various measures to promote economic development and regulate the allocation of resources. Although some of these measures may benefit the PRC economy generally, they may adversely affect Hupan Pharmaceutical’s medical product wholesale and distribution operations
3. 22There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations
4. 23Failure to obtain, renew or maintain the licenses, permits and filings required for our business operations, or to comply with the conditions and scope limitations attached to them, could materially and adversely affect our business, financial condition and results of operations
5. 24Restrictions on the ability of our PRC subsidiaries to make dividends and other distributions to us could limit our ability to fund our operations and make distributions to shareholders
6. 25Regulatory restrictions on currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment
7. 26Implementation of the labor laws and regulations in the PRC may adversely affect our business and results of operations, and failure to fully comply with PRC labor-related laws may expose us to potential liabilities and penalties
8. 27Fluctuations in exchange rates may result in foreign currency exchange losses
9. 28Changes in the relations between the PRC and the United States may affect our business, financial condition and results of operations
10. 29You may experience difficulties in effecting service of legal process upon, enforcing foreign judgments against, or bringing original actions in the PRC against us or certain of our directors and officers, and your ability to protect your interests through the U.S. courts may be limited
11. 30We may be required to complete filing procedures with the CSRC in connection with future offerings of our securities under this registration statement, and we cannot assure you that we will be able to complete such filings in a timely manner or at all
12. 31Compliance with the PRC’s laws, regulations and guidelines relating to data security, cybersecurity and privacy and any other future laws and regulations may entail significant expenses and could affect our business

Risks Related to Our Securities

1. 32If we are unable to regain and maintain compliance with Nasdaq listing standards, our common stock could be delisted, which could adversely affect the liquidity of our common stock and our ability to raise capital
2. 33If you purchase our securities, you may experience future dilution as a result of future equity offerings or other prior equity issuances
3. 34The market price of our common stock and the trading volume of our common stock have been and may continue to be volatile, and such volatility could cause the market price of our common stock to decrease