CHINA JO-JO DRUGSTORES, INC. 4 th Floor, Building 5, Renxin Yaju, Gong Shu District Hangzhou City, Zhejiang Province, P. R. China, 310014 Telephone: +86-571-88219579 NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDER

CHINA JO-JO DRUGSTORES, INC.

4th Floor, Building 5, Renxin Yaju, Gong Shu District

Hangzhou City, Zhejiang Province, P. R. China, 310014

Telephone: +86-571-88219579

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

TO BE HELD ON FEBRUARY 25, 2025

(or any adjournment or postponement thereof)

TO THE SHAREHOLDERS OF CHINA JO-JO DRUGSTORES, INC.:

Notice is hereby given that an Annual General Meeting of the shareholders of China Jo-Jo Drugstores, Inc., a Cayman Islands exempted company, (the Company ), will be held on February 25, 2025 at 9:00 p.m. E.T. (February 26, 2025 at 10:00 a.m., Beijing time) (the Annual General Meeting ), at the Company's principal executive offices located at 4th Floor, Building 5, Renxin Yaju, Gong Shu District, Hangzhou City, Zhejiang Province, P. R. China, 310014, and at any adjourned or postponement thereof. The Annual General Meeting is called for the following purposes:

1. The Divestiture Proposal to approve by ordinary resolution the transactions contemplated by the Equity Exchange Agreement, dated January 31, 2025, by and among the Company, its wholly-owned subsidiary, Renovation Investment (Hong Kong) Co., Ltd., a Hong Kong private company ( Renovation ), Lei Liu, Chief Executive Officer and Chairman of the Board of the Company and Li Qi, a director of the Company, and Oakview International Limited, a Hong Kong private company co-owned by Mr. Liu and Ms. Qi ( Oakview , collectively with Mr. Liu and Ms. Qi, the Liu and Qi Parties ), pursuant to which the Company and Renovation agreed to sell all the ownership interests in Zhejiang Jiu Xin Investment Management Co. Ltd., a Chinese limited liability company wholly owned by Renovation, to Oakview in exchange for all ordinary shares of the Company owned by the Liu and Qi Parties and their affiliates;

2. The Acquisition Proposal to approve by ordinary resolution the transactions including the issuance of ordinary shares, contemplated by the Equity Exchange Agreement, dated January 31, 2025, by and among the Company, Lingtao Kong, and Ridgeline International Limited, a Hong Kong private company ( Ridgeline ) wholly owned by Mr. Kong, pursuant to which Mr. Kong will sell all the ownership interests in Ridgeline to the Company in exchange for the issuance of 2,225,000 ordinary shares to Mr. Kong or his designee;

3. The Name Change Proposal to approve by special resolution a change of the Company's name from China Jo-Jo Drugstores, Inc. to Ridgetech, Inc. , and an alteration to the Company's Third Amended and Restated Memorandum of Association and Articles of Association to refer to the new corporate name of the Company (the Company Name Change );

4. The Director Election Proposal to approve by ordinary resolution the election of four directors to serve until the next annual meeting or until their successors are duly elected and qualified;

5. The Independent Accountants Ratification Proposal to ratify by ordinary resolution the appointment of YCM CPA, Inc. as the Company's independent registered public accounting firm for the fiscal year ending March 31, 2025;

6. The Capital Reduction Proposal to approve by special resolution the Capital Reduction (as defined below), subject to and conditional upon, (i) the Company's Board of Directors' (the Board ) approval to implement the Capital Reduction at such date and time in its sole discretion, but no later than the next annual general meeting of the Company, (ii) an order being made by the Grand Court of the Cayman Islands (the Grand Court ) confirming the Capital Reduction; (iii) compliance with any condition which the Grand Court may impose in relation to the Capital Reduction; and (v) registration by the Registrar of Companies of the Cayman Islands of a copy of the order of the Grand Court confirming the Capital Reduction and the minutes approved by the Grand Court containing the particulars required under the

Companies Act (As Revised) of the Cayman Islands (the Companies Act ) in respect of the Capital Reduction, with effect from the date on which these conditions are fulfilled, to effect the following changes to the Company's share capital:

(a) the par value of each issued, ordinary share of the Company be reduced from US$0.24 (or the then current par value of each ordinary share) each to US$0.001 each (the New Par Value ) by cancelling the paid-up capital to the extent of the difference between US$0.24 (or the then current par value) and the New Par Value on each of the then issued ordinary shares of the Company (the Capital Reduction ),

(b) immediately following the Capital Reduction, each of the authorized but unissued ordinary shares of the Company of par value of US$0.24 (or the then current par value) each be sub-divided (the Share Subdivision ) into, for example, in case the then-current par value of the ordinary shares prior to the Capital Reduction equals to US$0.24, 240 new ordinary shares of par value of US$0.001 each (the New Ordinary Shares );

(c) following the Capital Reduction, the credit arising from the Capital Reduction be transferred to a distributable reserve account of the Company which may be utilized by the Company as the Board may deem fit and permitted under the Companies Act, the memorandum and articles of association of the Company and all relevant applicable laws, including, without limitation, eliminating or setting off any accumulated losses of the Company from time to time;

(d) each of the New Ordinary Shares arising from the Capital Reduction and the Share Subdivision shall rank pari passu in all respects with each other and each shall have rights and privileges and be subject to the restrictions as contained in the memorandum and the articles of association of the Company;

(e) immediately following the Capital Reduction and the Share Subdivision, the authorized share capital of the Company will be changed from US$36,010,000 divided into (i) 150,000,000 ordinary shares of a par value of US$0.24 each (or, if following the Consolidation of Ordinary Shares (defined below) at the Approved Consolidation Ratio (defined below) of one-for-five (1:5), 30,000,000 ordinary shares of a par value of $1.20 each) and (ii) 10,000,000 preferred shares of a par value of US$0.001 each, to US$36,010,000 divided into (i) 36,000,000,000 New Ordinary Shares of a par value of US$0.001 each and (ii) 10,000,000 preferred shares of a par value of US$0.001 each; and

(f) any director of the Board be and is hereby authorized to do all such acts and things and execute all such documents, which are ancillary to the Capital Reduction and the Share Subdivision, on behalf of the Company, as he or she may consider necessary or expedient to give effect to, implement and complete the Capital Reduction and the Share Subdivision.

7. The Ordinary Share Consolidation Proposal to approve by ordinary resolution the Board to effect a consolidation (the Consolidation of Ordinary Shares ) of the Company's authorized and issued ordinary shares, at a ratio of up to one-for-five (1:5) (the Approved Consolidation Ratio ), on a date to be determined by the Board but no later than the next annual general meeting of the shareholders of the Company, with the exact ratio to be set at a whole number within this range, as determined by the Board in its sole discretion, such that the number of then authorized and issued ordinary shares of the Company is decreased by the Approved Consolidation Ratio, with the par value per ordinary share increased by the Approved Consolidation Ratio, and that the authorized share capital of the Company shall, subject to the shareholders' approval of the Capital Reduction Proposal, be altered from US$36,010,000 divided into (i) 150,000,000 ordinary shares of a par value of US$0.24 each (or, if following the Capital Reduction and the Share Subdivision, 36,000,000,000 New Ordinary Shares of a par value of $0.001 each), and (ii) 10,000,000 preferred shares of a par value of US$0.001 each, to US$36,010,000 divided into (i) as low as 30,000,000 ordinary shares of a par value of US$1.20 each (or, if following the Capital Reduction and the Share Subdivision, 7,200,000,000 New Ordinary Shares of a par value of $0.005 each), and (ii) 10,000,000 preferred shares of a par value of US$0.001 each, to be implemented only if deemed necessary by the Board in its sole discretion to comply with Nasdaq Listing Rules;

8. The Articles Restatement Proposal to approve by special resolution, subject to the shareholder approval of the Capital Reduction Proposal and the Ordinary Share Consolidation Proposal (as applicable), and only if the Board has effected a Capital Reduction and a Share Subdivision as authorized by the Capital Reduction Proposal and/or a Share Consolidation as authorized by the Ordinary Share Consolidation Proposal, the adoption of one or more newly amended and restated memorandum and articles of association to reflect the Capital Reduction, the Share Subdivision, the Consolidation of Ordinary Shares and the Company Name Change, as applicable;

9. to transact such other business as may properly come before the Annual General Meeting or any adjournment or postponement thereof.

The Divestiture Proposal and the Acquisition Proposal are conditioned on the approval of each other. Additionally, the Name Change Proposal and the Director Election Proposal concerning Mr. Kong's election are conditioned upon the approval of the Divestiture Proposal and the Acquisition Proposal. Each of these proposals is more fully described in the accompanying proxy statement.

The Board has fixed the close of business on January 17, 2025, as the record date for the determination of shareholders entitled to notice of and to vote at the Annual General Meeting or any adjourned or postponement thereof. We know that many of our shareholders will be unable to attend the Annual General Meeting. We are soliciting proxies so that each shareholder has an opportunity to vote on all matters that are scheduled to come before the shareholders at the Annual General Meeting. Whether or not you plan to attend, please take the time now to read the proxy statement and vote by telephone or via the Internet or, if you prefer, submit by mail a paper copy of your proxy or voter instructions card, so that your shares are represented at the meeting. You may also revoke your proxy or voter instructions before or at the Annual General Meeting. Regardless of the number of our shares you own, your presence in person or by proxy is important for quorum purposes and your vote is important for proper corporate actions.

Hangzhou City, People's Republic of China

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDERS MEETING TO BE HELD ON FEBRUARY 25, 2025 THE PROXY STATEMENT TO SHAREHOLDERS IS AVAILABLE AT WWW.IPROXYDIRECT.COM/CJJD AND THE COMPANY'S WEBSITE AT HTTP://JIUZHOU360.COM/INVESTORS/SEC_FILINGS.

WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL GENERAL MEETING, WE URGE YOU TO VOTE. YOU MAY VOTE BY TELEPHONE OR VIA THE INTERNET. IF YOU RECEIVED A PAPER COPY OF THE PROXY CARD BY MAIL, YOU MAY ALSO MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.

CHINA JO-JO DRUGSTORES, INC.

4th Floor, Building 5, Renxin Yaju, Gong Shu District

Hangzhou City, Zhejiang Province, P. R. China, 310014

Telephone: +86-571-88219579

ANNUAL GENERAL MEETING OF SHAREHOLDERS

(or any adjournment or postponement thereof)

The enclosed proxy is solicited on behalf of the Board of Directors (the Board or the Board of Directors ) of China Jo-Jo Drugstores, Inc., a Cayman Islands exempted company ( CJJD, the Company, we, us, or our ), for use at the Annual General Meeting of shareholders to be held on February 25, 2025 at 9:00 p.m. E.T. (February 26, 2025 at 10:00 a.m., Beijing time)(the Annual General Meeting ), or at any adjournment or postponement of the Annual General Meeting, for the purposes set forth in this proxy statement and in the accompanying Notice of Annual General Meeting of Shareholders. The Annual General Meeting will be held at the Company's principal executive offices located at 4th Floor, Building 5, Renxin Yaju, Gong Shu District, Hangzhou City, Zhejiang Province, P. R. China, 310014.

We have elected to provide access to our proxy materials by sending you the notice of our Annual General Meeting, this Proxy Statement, and a proxy card or a voting information card for the Annual General Meeting, for submitting your vote in writing to us or your broker, as the case may be. A full set of proxy materials are also made available to you by the Board on the Internet on or about February 4, 2025, at www.iproxydirect.com/CJJD and the Company's website at http://jiuzhou360.com/investors/sec_filings. These proxy materials include: our proxy statement for (and notice of) the Annual General Meeting and a proxy card or a voting information card for the Annual General Meeting. Our shareholders are invited to attend the Annual General Meeting and are requested to vote on the proposals described in this proxy statement.

What is the purpose of this document?

This document serves as the Company's proxy statement, which is being provided to Company shareholders of record at the close of business on January 17, 2025 (the Record Date ) because the Company's Board of Directors is soliciting their proxies to vote at the Annual General Meeting on the items of business outlined in the Notice of Annual General Meeting of Shareholders. We have included in this proxy statement important information about the Annual General Meeting. You should read this information carefully and in its entirety. The enclosed voting materials allow you to vote your shares without attending the Annual General Meeting.

Whether or not you plan to attend the Annual General Meeting, it is important that your shares be represented and voted at the Annual General Meeting. After reading this proxy statement, please promptly vote. Your shares cannot be voted unless you vote by Internet, telephone, fax or mail, vote as instructed by your broker, or vote your shares at the Annual General Meeting.

Who is entitled to vote at the Annual General Meeting?

Only shareholders of record at the close of business on the Record Date, January 17, 2025, are entitled to vote at the Annual General Meeting. If you were a shareholder of record on the Record Date, you will be entitled to vote all the shares that you held on the Record Date at the Annual General Meeting, or any postponement or adjournment of the Annual General Meeting.

Who can attend the Annual General Meeting?

Any person who was a shareholder of the Company on the Record Date may attend the meeting. If you own shares in street name, you should ask your broker or bank for a legal proxy to bring with you to the Annual General Meeting. If you do not receive the legal proxy in time, bring your most recent brokerage statement so that we can verify your ownership of our stock and admit you to the Annual General Meeting. You will not, however, be able to vote your shares at the Annual General Meeting without a legal proxy.

What am I voting on?

The Board, on behalf of the Company, is seeking your affirmative vote for the following eight proposals:

1. The Divestiture Proposal to approve by ordinary resolution the transactions contemplated by the Equity Exchange Agreement, dated January 31, 2025 (the Equity Exchange Agreement for Divestiture ), by and among the Company, its wholly-owned subsidiary, Renovation Investment (Hong Kong) Co., Ltd., a Hong Kong private company ( Renovation ), Lei Liu, Chief Executive Officer and Chairman of the Board of the Company and Li Qi, a director of the Company, and Oakview International Limited, a Hong Kong private company co-owned by Mr. Liu and Ms. Qi ( Oakview , collectively with Mr. Liu and Ms. Qi, the Liu and Qi Parties ), pursuant to which the Company and Renovation agreed to sell all the ownership interests in Zhejiang Jiu Xin Investment Management Co. Ltd. ( Jiuxin Investment ), a Chinese limited liability company wholly owned by Renovation, to Oakview in exchange for all ordinary shares of the Company owned by the Liu and Qi Parties and their affiliates (the Divestiture );

2. The Acquisition Proposal to approve by ordinary resolution the transactions including the issuance of ordinary shares, contemplated by the Equity Exchange Agreement, dated January 31, 2025 (the Equity Exchange Agreement for Acquisition ), by and among the Company, Lingtao Kong, and Ridgeline International Limited, a Hong Kong private company ( Ridgeline ) wholly owned by Mr. Kong, pursuant to which Mr. Kong will sell all the ownership interests in Ridgeline to the Company in exchange for the issuance of 2,225,000 ordinary shares to Mr. Kong or his designee (the Acquisition );

3. The Name Change Proposal to approve by special resolution a change of the Company's name from China Jo-Jo Drugstores, Inc. to Ridgetech, Inc. , and an alteration to the Company's Third Amended and Restated Memorandum of Association and Articles of Association to refer to the new corporate name of the Company ( the Company Name Change );

4. The Director Election Proposal to approve by ordinary resolution the election of four directors to serve until the next annual meeting or until their successors are duly elected and qualified;

5. The Independent Accountants Ratification Proposal to ratify by ordinary resolution the appointment of YCM CPA, Inc. as the Company's independent registered public accounting firm for the fiscal year ending March 31, 2025;

6. The Capital Reduction Proposal to approve by special resolution the Capital Reduction (defined below), subject to and conditional upon, (i) the Company's Board of Directors' (the Board ) approval to implement the Capital Reduction at such date and time in its sole discretion, but no later than the next annual general meeting of the Company, (ii) an order being made by the Grand Court of the Cayman Islands (the Grand Court ) confirming the Capital Reduction; (iii) compliance with any condition which the Grand Court may impose in relation to the Capital Reduction; and (v) registration by the Registrar of Companies of the Cayman Islands of a copy of the order of the Grand Court confirming the Capital Reduction and the minutes approved by the Grand Court containing the particulars required under the Companies Act (As Revised) (the Companies Act ) in respect of the Capital Reduction, with effect from the date on which these conditions are fulfilled, to effect the following changes to the Company's share capital:

(a) the par value of each issued, ordinary share of the Company be reduced from US$0.24 (or the then current par value of each ordinary share) each to US$0.001 each (the New Par Value ) by cancelling the paid-up capital to the extent of the difference between US$0.24 (or the then current par value) and the New Par Value on each of the then issued ordinary shares of the Company (the Capital Reduction ),

(b) immediately following the Capital Reduction, each of the authorized but unissued ordinary shares of the Company of par value of US$0.24 (or the then current par value) each be sub-divided (the Share Subdivision ) into, for example, in case the then-current par value of the ordinary shares prior to the Capital Reduction equals to US$0.24, 240 new ordinary shares of par value of US$0.001 each (the New Ordinary Shares );

(c) following the Capital Reduction, the credit arising from the Capital Reduction be transferred to a distributable reserve account of the Company which may be utilized by the Company as the Board may deem fit and permitted under the Companies Act, the memorandum and articles of association of the Company and all relevant applicable laws, including, without limitation, eliminating or setting off any accumulated losses of the Company from time to time;

(d) each of the New Ordinary Shares arising from the Capital Reduction and the Share Subdivision shall rank pari passu in all respects with each other and each shall have rights and privileges and be subject to the restrictions as contained in the memorandum and the articles of association of the Company;

(e) immediately following the Capital Reduction and the Share Subdivision, the authorized share capital of the Company will be changed from US$36,010,000 divided into (i) 150,000,000 ordinary shares of a par value of US$0.24 each (or, if following the Consolidation of Ordinary Shares at the Approved Consolidation Ratio of one-for-five (1:5), 30,000,000 ordinary shares of a par value of $1.20 each) and (ii) 10,000,000 preferred shares of a par value of US$0.001 each, to US$36,010,000 divided into (i) 36,000,000,000 New Ordinary Shares of a par value of US$0.001 each and (ii) 10,000,000 preferred shares of a par value of US$0.001 each; and

(f) any director of the Board be and is hereby authorized to do all such acts and things and execute all such documents, which are ancillary to the Capital Reduction and the Share Subdivision, on behalf of the Company, as he or she may consider necessary or expedient to give effect to, implement and complete the Capital Reduction and the Share Subdivision.

7. The Ordinary Share Consolidation Proposal to approve by ordinary resolution the Board to effect a consolidation (the Consolidation of Ordinary Shares ) of the Company's authorized and issued ordinary shares, at a ratio of up to one-for-five (1:5) (the Approved Consolidation Ratio ), on a date to be determined by the Board but no later than the next annual general meeting of the shareholders of the Company, with the exact ratio to be set at a whole number within this range, as determined by the Board in its sole discretion, such that the number of then authorized and issued ordinary shares of the Company is decreased by the Approved Consolidation Ratio, with the par value per ordinary share increased by the Approved Consolidation Ratio, and that the authorized share capital of the Company shall, subject to the shareholders' approval of the Capital Reduction Proposal, be altered from US$36,010,000 divided into (i) 150,000,000 ordinary shares of a par value of US$0.24 each (or, if following the Capital Reduction and the Share Subdivision, 36,000,000,000 New Ordinary Shares of a par value of $0.001 each), and (ii) 10,000,000 preferred shares of a par value of US$0.001 each, to US$36,010,000 divided into (i) as low as 30,000,000 ordinary shares of a par value of US$1.20 each (or, if following the Capital Reduction and the Share Subdivision, 7,200,000,000 New Ordinary Shares of a par value of $0.005 each), and (ii) 10,000,000 preferred shares of a par value of US$0.001 each, to be implemented only if deemed necessary by the Board in its sole discretion to comply with Nasdaq Listing Rules;

8. The Articles Restatement Proposal to approve by special resolution, subject to the shareholder approval of the Capital Reduction Proposal and the Ordinary Share Consolidation Proposal (as applicable), and only if the Board has effected a Capital Reduction and a Share Subdivision as authorized by the Capital Reduction Proposal and/or a Share Consolidation as authorized by the Ordinary Share Consolidation Proposal, the adoption of one or more newly amended and restated memorandum and articles of association to reflect the Capital Reduction, the Share Subdivision, the Consolidation of Ordinary Shares and the Company Name Change, as applicable;

9. to transact such other business as may properly come before the Annual General Meeting or any adjournment or postponement thereof.

Will any other matters be voted on?

We do not know of any other matters that will be brought before the shareholders for a vote at the Annual General Meeting. If any other matter is properly brought before the meeting, your signed proxy card would authorize Mr. Lei Liu to vote on such matters in his discretion.

What are the Transactions?

On January 31, 2025, CJJD entered into the Equity Exchange Agreement for Divestiture with Mr. Lei Liu, the Chief Executive Officer, Chairman of Board and a major shareholder of the Company, and Ms. Li Qi, a director and a shareholder of the Company. Pursuant to the agreement, CJJD will cause its wholly-owned subsidiary, Renovation, to transfer all Renovation's ownership interests in Jiuxin Investment to Oakview, in exchange for all ordinary shares of CJJD owned by Mr. Liu, Ms. Qi, Oakview and their affiliates including The Liu Family 2021 Trust and Super Marvel Limited, totaling 2,548,353 ordinary shares, which represent approximately 41% of outstanding ordinary shares of CJJD prior to giving effect to the Transactions (as defined below).

On January 31, 2025, CJJD entered into the Equity Exchange Agreement for Acquisition with Mr. Lingtao Kong, the sole shareholder of Ridgeline. Pursuant to the agreement, Mr. Kong will transfer all his ownership interests in Ridgeline, which owns 100% of the equity interests in Allright (Hangzhou) Internet Technology Co. Ltd., a Chinese limited liability company ( Allright ), to CJJD, in exchange for the issuance of 2,225,000 ordinary shares of CJJD to Mr. Kong, representing approximately 38% of issued and outstanding ordinary shares of CJJD following the Transactions.

The Divestiture and the Acquisition are each referred to as a Transaction. The parties expect that the consummation of each Transaction will be contingent upon the consummation of the other Transaction, and the closings of both Transactions shall occur simultaneously or as closely together as practical.

Why is the Board proposing the Transactions?

CJJD operates two primary lines of business: wholesale distribution of pharmaceutical products (the Wholesale Business ) and the pharmacy retail business, which includes both physical retail pharmacies and online pharmacies (the Retail Business ). The Company conducts the Retail Business through Jiuxin Investment and its controlled variable interest entities ( VIEs ), including Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd. ( Jiuzhou Pharmacy ) and several clinics. The Wholesale Business is conducted through other subsidiaries of Renovation, including Zhejiang Jiuxin Medicine Co., Ltd. ( Jiuxin Medicine ). CJJD was originally founded as a retail pharmacy business and subsequently ventured into the Wholesale Business in 2011.

In recent years, the Retail Business has incurred significant losses due to significant operating expenses, particularly in selling and marketing expenses, which the Company believes have been a main reason for its declining financial performance and share price. To address these challenges, the Board and management have explored various strategies to enhance the Company's financial health and shareholder value, including the potential divestiture of the Retail Business and its replacement with a more profitable business model. The Company's founders, Mr. Liu and Mr. Qi, have expressed interest in acquiring the Retail Business in exchange for returning to the Company all the ordinary shares they and their affiliates own.

Around the same time, through its trade dealings, the Company identified Allright, a rapidly growing company primarily engaged in the pharmaceutical wholesale business and actively trading on popular online distribution platforms nationwide, as a promising acquisition target. Additionally, Allright also has its own online distribution platform. The Company believes that trading on these platforms offers greater opportunities to distribute pharmaceutical products nationwide. Both Mr. Kong, the owner of Allright, and the Company share the vision of combining their wholesale operations to establish a focused, asset-light pharmaceutical wholesale business.

As the closings of the Divestiture and the Acquisition are conditioned upon each other, and the Divestiture involves related party transactions, the Board established a special committee comprising the independent directors on the Board, Caroline Wang, Jiangliang He, and Genghua Gu, and delegated authority to this committee to evaluate and approve the Transactions. After carefully considering the terms proposed by the Company, Mr. Liu, and Mr. Qi regarding the Divestiture, as well as those proposed by the Company and Mr. Kong regarding the Acquisition, the Special Committee determined that it is in the best interests of the Company and the shareholders to enter into the Transactions with the

objective of enhancing the Company's profitability and shareholder value. As a result, the Special Committee has approved both the Divestiture and the Acquisition. The Audit Committee of the Board has also approved the Divestiture in accordance with the requirements of the Company's Third Amended and Restated Memorandum and Articles of Association (the Charter, or the Articles ).

For a detailed discussion of the Company's reasons for the Transactions, please see the section entitled The Transactions Reasons for the Transactions below in this proxy statement.

What will public shareholders receive in the Transactions?

At the closing of the Transactions, our shareholders, excluding Mr. Liu, Ms. Qi, and their affiliates, will retain their respective existing ordinary shares in the Company.

As of the Record Date, shareholders who are not directors, officers, or 5% shareholders (the Public Shareholders ) held approximately 59% of our outstanding ordinary shares. Upon completion of the Transactions, the Public Shareholders are expected to hold approximately 62% of the outstanding ordinary shares.

What is required to consummate the Transactions?

To consummate the Transactions, our shareholders must approve the Divestiture Proposal, the Acquisition Proposal, the Name Change Proposal, and the Director Election Proposal concerning Mr. Kong's election. Mr. Liu and Ms. Qi have agreed that the Liu and Qi Parties will abstain from voting on the Divestiture Proposal.

In addition to obtaining the shareholder approvals described above, each of the other closing conditions set forth in the Equity Exchange Agreements must be satisfied or waived. This includes obtaining confirmation from the Nasdaq Stock Market LLC ( Nasdaq ) that the Transactions do not constitute a change of control requiring the post-Transactions Company to meet the initial listing requirements, or, if so, that the Company has received approval for the initial listing application for the post-Transactions Company.

For a more detailed description of the closing conditions under the Equity Exchange Agreements, please refer to the sections entitled Shares Exchange Agreement for the Divestiture Conditions to the Completion of the Divestiture and Shares Exchange Agreement for the Acquisition Conditions to the Completion of the Acquisition in this proxy statement.

Are the proposals conditioned on one another?

Yes. The Divestiture Proposal and the Acquisition Proposal are conditioned on the approval of each other. Additionally, the Name Change Proposal and the Director Election Proposal concerning Mr. Kong's election are conditioned upon the approval of the Divestiture Proposal and the Acquisition Proposal.

What are the reasons for proposing the Name Change Proposal, the Director Election Proposal, the Capital Reduction Proposal, the Ordinary Share Consolidation Proposal and the Articles Restatement Proposal?

The approval of these proposals is either required by the Equity Exchange Agreements or necessary to facilitate the consummation of the Transactions:

Pursuant to the Equity Exchange Agreements, following the consummation of the Transactions, the Company is required to change its corporate name to Ridgetech, Inc. The current name of the Company is the trade name used by the Retail Business to be divested; therefore, to avoid confusion, the post-Transactions Company will require a distinct name.

Accordingly, the Name Change Proposal seeks shareholder approval to change the Company's name and amend the Company's Charter to record this name change.

Additionally, under the Equity Exchange Agreements, following the consummation of the Transactions, Mr. Liu and Ms. Qi will resign from the Board and any other officer positions with the Company (including Mr. Liu's role as Chief Executive Officer), and Mr. Kong will be elected to the Board as Chairman. The current independent directors of the Board are expected to continue serving as directors of the Company.

Accordingly, the Director Election Proposal seeks shareholder approval for the election of the directors, including Mr. Kong and the current independent directors, to serve on the Board following the consummation of the Transactions.

The Companies Act requires shares with a nominal or par value to be fully paid up to at least their nominal or par value. The proposed Capital Reduction and the Share Subdivision will increase the number of authorized ordinary shares and reduce the nominal value of each ordinary share. The Board believes this adjustment will enhance the trading liquidity of the ordinary shares, lower the investment barrier, and attract more investors to trade in our ordinary shares.

Accordingly, the Capital Reduction Proposal seeks shareholder approval for the Capital Reduction (defined below), subject to and conditional upon, (i) the Board's approval to implement the Capital Reduction at such date and time in its sole discretion, but no later than the next annual general meeting of the Company, (ii) an order being made by the Grand Court confirming the Capital Reduction; (iii) compliance with any condition which the Grand Court may impose in relation to the Capital Reduction; and (v) registration by the Registrar of Companies of the Cayman Islands of a copy of the order of the Grand Court confirming the Capital Reduction and the minutes approved by the Grand Court containing the particulars required under the Companies Act in respect of the Capital Reduction, with effect from the date on which these conditions are fulfilled, to effect the following changes to the Company's share capital:

(a) the par value of each issued, ordinary share of the Company be reduced from US$0.24 (or the then current par value of each ordinary share) each to US$0.001 each (the New Par Value ) by cancelling the paid-up capital to the extent of the difference between US$0.24 (or the then current par value) and the New Par Value on each of the then issued ordinary shares of the Company (the Capital Reduction ),

(b) immediately following the Capital Reduction, each of the authorized but unissued ordinary shares of the Company of par value of US$0.24 (or the then current par value) each be sub-divided (the Share Subdivision ) into, for example, in case the then-current par value of the ordinary shares prior to the Capital Reduction equals to US$0.24, 240 new ordinary shares of par value of US$0.001 each (the New Ordinary Shares );

(c) following the Capital Reduction, the credit arising from the Capital Reduction be transferred to a distributable reserve account of the Company which may be utilized by the Company as the Board may deem fit and permitted under the Companies Act, the memorandum and articles of association of the Company and all relevant applicable laws, including, without limitation, eliminating or setting off any accumulated losses of the Company from time to time;

(d) each of the New Ordinary Shares arising from the Capital Reduction and the Share Subdivision shall rank pari passu in all respects with each other and each shall have rights and privileges and be subject to the restrictions as contained in the memorandum and the articles of association of the Company;

(e) immediately following the Capital Reduction and the Share Subdivision, the authorized share capital of the Company will be changed from US$36,010,000 divided into (i) 150,000,000 ordinary shares of a par value of US$0.24 each (or, if following the Consolidation of Ordinary Shares at the Approved Consolidation Ratio of one-for-five (1:5), 30,000,000 ordinary shares of a par value of $1.20 each) and (ii) 10,000,000 preferred shares of a par value of US$0.001 each, to US$36,010,000 divided into (i) 36,000,000,000 New Ordinary Shares of a par value of US$0.001 each and (ii) 10,000,000 preferred shares of a par value of US$0.001 each; and

(f) any director of the Board be and is hereby authorized to do all such acts and things and execute all such documents, which are ancillary to the Capital Reduction and the Share Subdivision, on behalf of the Company, as he or she may consider necessary or expedient to give effect to, implement and complete the Capital Reduction and the Share Subdivision.

Pursuant to the Equity Exchange Agreements, one of the closing conditions is obtaining confirmation from Nasdaq that the Transactions do not constitute a change of control requiring the post-Transactions Company to meet the initial listing requirements. Alternatively, if Nasdaq determines that the post-Transactions Company must meet the initial listing requirements, the Company must obtain Nasdaq approval for the initial listing application. If Nasdaq requires the post-Transactions Company to meet the initial listing requirements, the Consolidation of Ordinary Shares can help the Company meet the minimum bid price necessary for compliance with Nasdaq's initial listing