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</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>UNITED STATES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>SECURITIES AND EXCHANGE COMMISSION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>WASHINGTON, D.C. 20549</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>FORM <ix:nonNumeric contextRef="c0" name="dei:DocumentType">20-F</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentRegistrationStatement"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric>&#160;<b>REGISTRATION
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:DocumentAnnualReport"><span style="font-family: Times New Roman, Times, Serif">&#9746;</span></ix:nonNumeric>
<b>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>For the fiscal year ended <ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="dei:DocumentPeriodEndDate"><ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-en" name="dei:CurrentFiscalYearEndDate">December 31</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:DocumentFiscalYearFocus">2022</ix:nonNumeric></ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentTransitionReport"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric>&#160;<b>TRANSITION
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>For the transition period from _________ to
_____________.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentShellCompanyReport"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric>&#160;<b>SHELL
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Date of event requiring this shell company report:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Commission file number: <ix:nonNumeric contextRef="c0" name="dei:EntityFileNumber">001-39734</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:EntityRegistrantName"><b>Oriental Culture Holding, LTD.</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Exact name of Registrant as Specified in its Charter)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt-sec:edgarprovcountryen" name="dei:EntityIncorporationStateCountryCode"><b>Cayman Islands</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Jurisdiction of Incorporation or Organization)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine1">Room 1402</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine2">Richmake Commercial Building</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine3">198-200 Queen&#8217;s Road Central</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressCityOrTown">Hong Kong</ix:nonNumeric></ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Address of Principal Executive Offices)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelName"><b>Yi Shao</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>Chief Executive Officer</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine1">Room 1402</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine2">Richmake Commercial Building</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine3">198-200 Queen&#8217;s Road Central</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry"><ix:nonNumeric contextRef="c1" name="dei:EntityAddressCityOrTown">Hong Kong</ix:nonNumeric></ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>Telephone: <ix:nonNumeric contextRef="c1" name="dei:CityAreaCode">(852)</ix:nonNumeric> <ix:nonNumeric contextRef="c1" name="dei:LocalPhoneNumber">2110-3909</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>Email: ir@ocgroup.hk</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Name, Telephone, E-mail and/or Facsimile Number
and Address of Company Contact Person)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Securities registered or to be registered pursuant
to Section 12(b) of the Act:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>Title of each class</b></span></td> <td style="width: 2%; text-align: center">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>Trading Symbol(s)</b></span></td> <td style="width: 2%; text-align: center">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Name of each exchange on</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>which registered</b></p></td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:Security12bTitle"><span style="font-size: 10pt">Ordinary Shares, par value $0.00005</span></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:TradingSymbol"><span style="font-size: 10pt">OCG</span></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><span style="font-size: 10pt"><ix:nonNumeric contextRef="c0" format="ixt-sec:exchnameen" name="dei:SecurityExchangeName">Nasdaq</ix:nonNumeric> Capital Market</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Securities registered or to be registered pursuant
to Section 12(g) of the Act:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="text-decoration:underline">None</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Title of Class)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="text-decoration:underline">None</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Title of Class)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate the number of outstanding shares of each
of the issuer&#8217;s classes of capital or common stock as of the close of the period covered by the annual report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December&#160;31, 2022, there were <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">21,226,992</ix:nonFraction>
ordinary shares outstanding.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric>&#160;<span style="font-family: Times New Roman, Times, Serif">&#9746;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. Yes&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric>&#160;<span style="font-family: Times New Roman, Times, Serif">&#9746;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. <ix:nonNumeric contextRef="c0" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric>&#160;<span style="font-family: Times New Roman, Times, Serif">&#9746;</span>&#160;No&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted&#160;pursuant to Rule 405 of Regulation S-T (&#167;
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
<ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric>&#160;<span style="font-family: Times New Roman, Times, Serif">&#9746;</span>&#160;No&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of &#8220;large
accelerated filer,&#8221; &#8220;accelerated filer,&#8221; and &#8220;emerging growth company&#8221; in Rule 12b-2 of the Exchange Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Large accelerated filer&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;&#160;&#160;&#160;&#160;Accelerated
filer&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory">Non-accelerated filer</ix:nonNumeric>&#160;<span style="font-family: Times New Roman, Times, Serif">&#9746;</span>&#160;&#160;&#160;&#160;&#160;Emerging
growth company&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:EntityEmergingGrowthCompany"><span style="font-family: Times New Roman, Times, Serif">&#9746;</span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards&#8224; provided pursuant to Section 13(a) of the Exchange
Act.&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityExTransitionPeriod"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8224; The term &#8220;new or revised
financial accounting standard&#8221; refers to any update issued by the Financial Accounting Standards Board to its Accounting
Standards Codification after April&#160;5, 2012.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has filed a report on and attestation to its management&#8217;s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:IcfrAuditorAttestationFlag"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant&#8217;s
executive officers during the relevant recovery period pursuant to &#167;240.10D-1(b). <span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#9746;</span>&#160;<span style="-sec-ix-hidden: hidden-fact-0">U.S.
GAAP</span>&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;International Financial Reporting Standards as
issued by the International Accounting Standards Board&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;Other&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If &#8220;Other&#8221; has been checked in response
to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;Item
18&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;No&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityShellCompany"><span style="font-family: Times New Roman, Times, Serif">&#9746;</span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PAST FIVE YEARS)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has filed all documents and reports required to be filed by Sections 12, 13 or 15(d)&#160;of the Securities Exchange Act of 1934 subsequent
to the distribution of securities under a plan confirmed by a court. <span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;Yes&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;No</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>TABLE OF CONTENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="vertical-align: top; width: 10%">&#160;</td>
    <td style="vertical-align: top; width: 82%">&#160;</td>
    <td style="vertical-align: bottom; width: 8%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>Page</b>&#160;</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><a href="#a_001">Introduction</a></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">ii</span></td></tr>
  <tr>
    <td colspan="2" style="vertical-align: top"><a href="#a_002">Forward-looking Statements</a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">&#160;iii</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td colspan="3">&#160;</td></tr>
  <tr style="vertical-align: top; ">
    <td colspan="3" style="text-align: center"><a href="#a_003">PART I</a></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 1.</span></td>
    <td style="vertical-align: top"><a href="#a_004"><span style="font-size: 10pt">Identity of Directors, Senior Management and Advisers</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">1</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 2.</span></td>
    <td style="vertical-align: top"><a href="#a_005"><span style="font-size: 10pt">Offer Statistics and Expected Timetable</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">1</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 3.</span></td>
    <td style="vertical-align: top"><a href="#a_006"><span style="font-size: 10pt">Key Information</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">1</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 4.</span></td>
    <td style="vertical-align: top"><a href="#a_007"><span style="font-size: 10pt">Information On The Company</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">44</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 4A.</span></td>
    <td style="vertical-align: top"><a href="#a_008"><span style="font-size: 10pt">Unresolved Staff Comments</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">68</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 5.</span></td>
    <td style="vertical-align: top"><a href="#a_009"><span style="font-size: 10pt">Operating And Financial Review And Prospects</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">68</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 6.</span></td>
    <td style="vertical-align: top"><a href="#a_010"><span style="font-size: 10pt">Directors, Senior Management And Employees</span></a></td>
    <td style="vertical-align: bottom; text-align: center">83</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 7.</span></td>
    <td style="vertical-align: top"><a href="#a_011"><span style="font-size: 10pt">Major Shareholders And Related Party Transactions</span></a></td>
    <td style="vertical-align: bottom; text-align: center">91</td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 8.</span></td>
    <td style="vertical-align: top"><a href="#a_012"><span style="font-size: 10pt">Financial Information</span></a></td>
    <td style="vertical-align: bottom; text-align: center">94</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 9.</span></td>
    <td style="vertical-align: top"><a href="#a_013"><span style="font-size: 10pt">The Offer And Listing</span></a></td>
    <td style="vertical-align: bottom; text-align: center">94</td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 10.</span></td>
    <td style="vertical-align: top"><a href="#a_014"><span style="font-size: 10pt">Additional Information</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">94</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 11.</span></td>
    <td style="vertical-align: top"><a href="#a_015"><span style="font-size: 10pt">Quantitative And Qualitative Disclosures About Market Risk</span></a></td>
    <td style="vertical-align: bottom; text-align: center">106</td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 12.</span></td>
    <td style="vertical-align: top"><a href="#a_016"><span style="font-size: 10pt">Description Of Securities Other Than Equity Securities</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">107</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; ">
    <td colspan="3" style="text-align: center"><a href="#a_017"><span style="font-size: 10pt">PART II</span></a></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 13.</span></td>
    <td style="vertical-align: top"><a href="#a_018"><span style="font-size: 10pt">Defaults, Dividend Arrearages And Delinquencies</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">108</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 14.</span></td>
    <td style="vertical-align: top"><a href="#a_019"><span style="font-size: 10pt">Material Modifications To The Rights Of Security Holders And Use Of Proceeds</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">108</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 15.</span></td>
    <td style="vertical-align: top"><a href="#a_020"><span style="font-size: 10pt">Controls And Procedures</span></a></td>
    <td style="vertical-align: bottom; text-align: center">108</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16A.</span></td>
    <td style="vertical-align: top"><a href="#a_021"><span style="font-size: 10pt">Audit Committee Financial Expert</span></a></td>
    <td style="vertical-align: bottom; text-align: center">110</td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16B.</span></td>
    <td style="vertical-align: top"><a href="#a_022"><span style="font-size: 10pt">Code Of Ethics</span></a></td>
    <td style="vertical-align: bottom; text-align: center">110</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16C.</span></td>
    <td style="vertical-align: top"><a href="#a_023"><span style="font-size: 10pt">Principal Accountant Fees and Services</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">110</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16D.</span></td>
    <td style="vertical-align: top"><a href="#a_024"><span style="font-size: 10pt">Exemptions From The Listing Standards For Audit Committees</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">111</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16E.</span></td>
    <td style="vertical-align: top"><a href="#a_025"><span style="font-size: 10pt">Purchases Of Equity Securities By The Issuer And Affiliated Purchasers</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">111</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16F.</span></td>
    <td style="vertical-align: top"><a href="#a_026"><span style="font-size: 10pt">Change In Registrant&#8217;s Certifying Accountant</span></a></td>
    <td style="vertical-align: bottom; text-align: center">111</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16G.</span></td>
    <td style="vertical-align: top"><a href="#a_027"><span style="font-size: 10pt">Corporate Governance</span></a></td>
    <td style="vertical-align: bottom; text-align: center">111</td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16H.</span></td>
    <td style="vertical-align: top"><a href="#a_028"><span style="font-size: 10pt">Mine Safety Disclosure</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">111</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 16I.</span></td>
    <td style="vertical-align: top"><a href="#a_029"><span style="font-size: 10pt">Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.</span></a></td>
    <td style="vertical-align: bottom; text-align: center">111</td></tr>
  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td colspan="3" style="text-align: center"><a href="#a_030"><span style="font-size: 10pt">PART III</span></a></td></tr>
  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 17.</span></td>
    <td style="vertical-align: top"><a href="#a_031"><span style="font-size: 10pt">Financial Statements</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">112</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 18.</span></td>
    <td style="vertical-align: top"><a href="#a_032"><span style="font-size: 10pt">Financial Statements</span></a></td>
    <td style="vertical-align: bottom; text-align: center">112</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Item 19.</span></td>
    <td style="vertical-align: top"><a href="#a_033"><span style="font-size: 10pt">Exhibits</span></a></td>
    <td style="vertical-align: bottom; text-align: center">112</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 3; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="text-transform: uppercase"><b>Introduction</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In this annual report on Form 20-F, unless otherwise
indicated, &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; the &#8220;Company&#8221;, &#8220;Oriental Culture&#8221;, &#8220;Registrant&#8221;
and &#8220;OCG&#8221; refer to Oriental Culture Holding LTD., a company incorporated in the Cayman Islands, its predecessor entities,
its subsidiaries, variable interest entity and the subsidiaries of the consolidated variable interest entity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Unless indicated otherwise, references to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;China&#8221; or the &#8220;PRC&#8221; are
to the People&#8217;s Republic of China, excluding, for the purpose of this report only, Hong Kong special administrative region, Macau
special administrative region and Taiwan;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;EIT&#8221; are to PRC enterprise income
tax;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;HK$,&#8221; &#8220;HK dollars,&#8221; &#8220;HKD&#8221;
are to the legal currency of the Hong Kong special administrative region;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;HKDAEx&#8221; are to HKDAEx Limited, a
company incorporated under laws of Hong Kong and a wholly owned subsidiary of Oriental Culture Holding LTD;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;International Exchange&#8221; are to China
International Assets and Equity of Artworks Exchange Limited, a company incorporated under the laws of Hong Kong and a wholly owned subsidiary
of Oriental Culture Holding LTD;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;Jiangsu Yanggu&#8221; are to Jiangsu Yanggu
Culture Development Co., Ltd., a company incorporated under the laws of China, which is the variable interest entity that carries out
our main business operations in China;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;MOFCOM&#8221; are to the Ministry of Commerce
of the PRC;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;Ordinary Share(s)&#8221; are our ordinary
shares with a par value of US$0.00005 per share;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;Oriental Culture,&#8221; &#8220;we,&#8221;
&#8220;us,&#8221; &#8220;our company,&#8221; and &#8220;our&#8221; are to Oriental Culture Holding LTD, a Cayman Islands exempted company
with limited liability, and its subsidiary and consolidated entity;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;Oriental Culture BVI&#8221; are to Oriental
Culture Development LTD, a company incorporated under the laws of British Virgin Islands and a wholly owned subsidiary of Oriental Culture
Holding LTD;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;Oriental Culture HK&#8221; are to HK Oriental
Culture Investment Development Limited, a company incorporated under the laws of Hong Kong and a wholly owned subsidiary of Oriental Culture
BVI;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;Nanjing Rongke&#8221; or &#8220;WFOE&#8221;
are to Nanjing Rongke Business Consulting Service Co., Ltd. a company incorporated in China and a wholly-owned subsidiary of Oriental
Culture HK;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;RMB&#8221; and &#8220;Renminbi&#8221; refer
to the legal currency of China;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;SAFE&#8221; are to the State Administration
of Foreign Exchange;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;US$,&#8221; &#8220;U.S. dollars,&#8221;
&#8220;$&#8221; and &#8220;dollars&#8221; are to the legal currency of the United States;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;VIE&#8221; are to variable interest entity;
and</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business is primarily conducted in China
and Hong Kong, an all of our revenues are received and denominated in RMB and Hong Kong Dollars. RMB is not freely convertible into foreign
currency and all foreign exchange transactions must take place through authorized institutions.&#160;&#160;This annual report contains
translations of Renminbi and HK$ amounts into U.S. dollars at specified rates solely for the convenience of the reader. We make no representation
that the Renminbi, HK$ or U.S. dollar amounts referred to in this report could have been or could be converted into U.S. dollars, HK$
or Renminbi, as the case may be, at any particular rate or at all. On December 31, 2022, the exchange rate was RMB 6.9646 to $1.00 which
is the intermediate exchange rate announced by the People&#8217;s Bank of China and HK$7.8015 to $1.00 which is the&#160;unified exchange
rate as quoted by the Federal Reserve.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We completed an initial public offering of our
ordinary shares at an initial offering price of US$4.00 per share on December&#160;17, 2020. Our ordinary shares, par value US$0.00005
per share, are traded on the Nasdaq Capital Market under the symbol &#8220;OCG.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 4; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->ii<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>FORWARD-LOOKING STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This report contains &#8220;forward-looking statements&#8221;
for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that represent our beliefs, projections
and predictions about future events. Known and unknown risks, uncertainties and other factors, including those listed under &#8220;Risk
Factors,&#8221; may cause our actual results, performance or achievements to be materially different from those expressed or implied by
the forward-looking statements. All statements other than statements of historical fact are &#8220;forward-looking statements,&#8221;
including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management
for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic
conditions or performance, any statements of management&#8217;s beliefs, goals, strategies, intentions and objectives, and any statements
of assumptions underlying any of the foregoing. Words such as &#8220;may&#8221;, &#8220;will&#8221;, &#8220;should&#8221;, &#8220;could&#8221;,
&#8220;would&#8221;, &#8220;predicts&#8221;, &#8220;potential&#8221;, &#8220;continue&#8221;, &#8220;expects&#8221;, &#8220;anticipates&#8221;,
&#8220;future&#8221;, &#8220;intends&#8221;, &#8220;plans&#8221;, &#8220;believes&#8221;, &#8220;estimates&#8221; and similar expressions,
as well as statements in the future tense, identify forward-looking statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have based these forward-looking statements
largely on our current expectations and projections about future events that we believe may affect our financial condition, results of
operations, business strategy and financial needs. These forward-looking statements include statements relating to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our goals and strategies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our future business development, financial conditions and results of operations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the expected growth of the collectibles and artwork trading and related services marketplace market in Hong Kong and China;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">fluctuations in interest rates;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our expectations as to collectability of the revenues from collectibles and artwork trades facilitated through our platform and our services to our customers;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our expectations regarding demand for and market acceptance of our products and services;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our expectations regarding our relationships with collectibles and artwork buyers and sellers;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">competition in our industry; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in">
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#9679;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#9679;</p></td>
    <td>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">relevant government policies and regulations relating
    to our industry; and</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">impact of COVID-19 on our business and financial
    conditions.</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These forward-looking statements involve various
risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations
may later be found to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors
that could cause our actual results to be materially different from our expectations are generally set forth in &#8220;Risk Factors&#8221;
and other sections in this report. You should thoroughly read this report and the documents that we refer to with the understanding that
our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements
by these cautionary statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This report contains certain data and information
that we obtained from various government and private publications. Statistical data in these publications also include projections based
on a number of assumptions. Our industry may not grow at the rate projected by market data, or at all. Failure of this market to grow
at the projected rate may have a material and adverse effect on our business and the market price of our ordinary shares. In addition,
the rapidly changing nature of the online art and collectible marketplace industry results in significant uncertainties for any projections
or estimates relating to the growth prospects or future condition of our market. Furthermore, if any one or more of the assumptions underlying
the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should
not place undue reliance on these forward-looking statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The forward-looking statements made in this report
relate only to events or information as of the date on which the statements are made in this report. Except as required by law, we undertake
no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and
the documents that we refer to in this report and any exhibits filed to this report, completely and with the understanding that our actual
future results may be materially different from what we expect.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PART I</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-indent: -70pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-indent: -70pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 3. KEY INFORMATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-indent: -70pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Our Holding Company Structure and Contractual
Arrangements with the Consolidated VIE and Its Individual Shareholders in China</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a Cayman Islands holding company without
material operations and our business is conducted by our subsidiaries in Hong Kong and variable interest entity (&#8220;VIE&#8221;) and
its subsidiaries in China and this structure involves unique risks to investors. We are not a Chinese operating company and that our business
in China is conducted through contractual arrangements with the VIE and its subsidiaries. However, the VIE agreements have not been truly
tested in the courts in China. Chinese regulatory authorities could disallow this structure, which would likely result in a material change
in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the
value of such securities to significantly decline or become worthless. See &#8220;<i>Item 3. Key Information&#8212;D. Risk Factors&#8212;
&#8220;If the Chinese government determines that the contractual arrangements through which we control the VIE do not comply with applicable
regulations, our business could be adversely affected.&#8221; and &#8220;Uncertainties and quick change in the interpretation and enforcement
of Chinese laws and regulations with little advance notice could result in a material and negative impact on our business operations,
decrease the value of our securities and limit the legal protections available to you and us.&#8221;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are legal and operational risks associated
with being based in and having our operations in Hong Kong and China. Recently, the PRC government initiated a series of regulatory actions
and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the
securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting
new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. On July 6, 2021, the
General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement
to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among
other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation,
to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application
of the PRC securities laws. On December 28, 2021, Cybersecurity Review Measures were published by Cyberspace Administration of China or
the CAC, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry
of State Security, Ministry of Finance, Ministry of Commerce, People&#8217;s Bank of China, State Administration of Radio and Television,
China Securities Regulatory Commission (&#8220;CSRC&#8221;), State Secrecy Administration and State Cryptography Administration and became
effective on February 15, 2022, which provides that, Critical Information Infrastructure Operators (&#8220;CIIOs&#8221;) that purchase
internet products and services and Online Platform Operators engaging in data processing activities that affect or may affect national
security shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published the Administration
Measures for Cyber Data Security (Draft for Public Comments), or the &#8220;Cyber Data Security Measure (Draft)&#8221;, which requires
cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with
the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and Archives Administration
of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic company that seeks
to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations, enhance legal awareness
of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system,
and take necessary measures to fulfill confidentiality and archives administration obligations. On July 7, 2022, CAC promulgated the Measures
for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply
for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important
data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1
million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has
already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas
since January 1st&#160;of the previous year; and (iv) other circumstances under which the data cross-border transfer security assessment
is required as prescribed by the CAC. On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Enterprises (the &#8220;New Overseas Listing Rules&#8221;) with five interpretive guidelines, which will
take effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises to complete filings with relevant governmental
authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public
offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas
market; c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s),
share swap, transfer of shares or other means. According to the Notice on Arrangements for Overseas Securities Offering and Listing by
Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already completed overseas listing or (ii) has
already obtained the approval for the offering or listing from overseas securities regulators or exchanges but has not completed such
offering or listing before effective date of the new rules and completes such offering or listing before September 30, 2023 will be considered
as an existing listed company and is not required to make any filing until it conducts a new offering in the future. Furthermore, upon
the occurrence of any of the material events specified below after an issuer has completed its offering and listed its securities on an
overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working days after the occurrence and public disclosure
of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other competent
authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting.&#160;As of the date
of this report, these new laws and guidelines have not impacted the Company&#8217;s ability to conduct its business, list and trade on
a U.S. or other foreign exchange; however, there are uncertainties in the interpretation and enforcement of these new laws and guidelines,
which could materially and adversely impact our business and financial outlook, may impact our ability to accept foreign investments,
offer our securities to investors or continue to list on a U.S. or other foreign exchange, and could impact our ability to conduct our
business. Any change in foreign investment regulations, and other policies in China or related enforcement actions by China government
could result in a material change in our operations and the value of our securities and could significantly limit or completely hinder
our ability to offer our securities to investors or cause the value of our securities to significantly decline or be worthless. The Holding
Foreign Companies Accountable Act, or the HFCA Act, was enacted on December&#160;18, 2020. In accordance with the HFCA Act, trading in
securities of any registrant on a national securities exchange or in the over-the-counter&#160;trading market in the United States may
be prohibited if the PCAOB determines that it cannot inspect or fully investigate the registrant&#8217;s auditor for three consecutive
years beginning in 2021, and, as a result, an exchange may determine to delist the securities of such registrant. On December 29, 2022,
a legislation entitled &#8220;Consolidated Appropriations Act, 2023&#8221; (the &#8220;Consolidated Appropriations Act&#8221;) was signed
into law by President Biden, which has shorten the Holding Foreign Companies Accountable Act&#8217;s timeline for a potential trading
prohibition from three years to two years, thus reducing the time period before our securities may be prohibited from trading or delisted
if our auditor is unable to meet the PCAOB inspection requirement. The Company&#8217;s auditor, Wei, Wei &amp; Co., LLP is headquartered
in the U.S. and the Public Company Accounting Oversight Board (United States) (the &#8220;PCAOB&#8221;) currently has access to inspect
the working papers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021, which
determinations were vacated on December 15, 2022. The Holding Foreign Companies Accountable Act and related regulations currently does
not affect the Company as the Company&#8217;s auditor is subject to PCAOB&#8217;s inspection and investigation.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Permissions Required from the PRC Authorities
for Our Operations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Jiangsu Yanggu and its subsidiaries are incorporated
and operating in mainland China and they have received all required permissions from Chinese authorities to operate its current business
in China, which are their business licenses. Other than the business licenses, the VIE and its subsidiaries are not required to obtain
permit and approval from Chinese authorities to operate our business while the Company is subject to New Overseas Listing Rules for offering
the securities to investors. We, our subsidiaries, or VIE and its subsidiaries are not covered by permissions requirements from the China
Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency that is required to
approve the VIE&#8217;s business and operations. As the VIE and its subsidiaries provide marketing, warehouse storage and technical maintenance
services in China, based on the advice of our PRC counsel Jiangsu Taikun Law Firm (&#8220;Taikun Law Firm&#8221;), we do not believe that
we are a Critical Information Infrastructure Operator (&#8220;CIIO&#8221;) or an Online Platform Operator&#160;as defined in Cybersecurity
Review Measures published by Cyberspace Administration of China, National Development and Reform Commission, Ministry of Industry and
Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People&#8217;s
Bank of China, State Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and
State Cryptography Administration on December 28, 2021 and became effective on February 15, 2022. As of the date of this report, we, our
subsidiaries, the VIE and its subsidiaries (1) are not required to obtain permissions from any PRC authorities to issue our securities
to foreign investors except for the filing requirement under New Overseas Listing Rules, (2) are not subject to permission requirements
from China Securities Regulatory Commission (the &#8220;CSRC&#8221;), Cyberspace Administration of China&#160;(&#8220;CAC&#8221;) or any
other authority that is required to approve of the VIE&#8217;s operations, and (3) have not received or were denied such permissions by
any PRC authorities. Nevertheless, the General Office of the Central Committee of the Communist Party of China and the General Office
of the State Council jointly issued the &#8220;Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,&#8221;
or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration
over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Given the
current PRC regulatory environment, it is uncertain when and whether we, our PRC subsidiary or VIE and its subsidiaries, will be required
to obtain permission from the PRC government to be listed on a U.S. exchange in the future, and even when such permission is obtained,
whether it will be rescinded. If we, our subsidiaries, or the VIE and its subsidiaries do not receive or maintain such permissions or
approvals, inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations
change and we are required to obtain such permissions or approvals in the future, it could significantly limit or completely hinder our
ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or become
worthless.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Dividend Distribution and Cash Transfer
Between the Holding Company, Subsidiary and VIE.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are an online provider of collectibles and
artwork e-commerce services and we facilitate trading by individual and institutional customers of all kinds of collectibles, artworks
and certain commodities on our leading online platforms owned by our subsidiaries in Hong Kong, namely the China International Assets
and Equity of Artworks Exchange Limited and HKDAEx Limited. We also provide online and offline integrated marketing, warehouse storage
and technical maintenance services to our customers through the VIE and its subsidiaries in China.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our PRC operating entities receive their revenues
in RMB. Under our current corporate structure, to fund any cash and financing requirements we may have, the Company may rely on certain
dividend payments from our subsidiaries in Hong Kong and WFOE in China. Our WFOE receives payments from Jiangsu Yanggu, pursuant to the
VIE Agreements. WFOE may make distribution of such payments to Oriental Culture HK as dividends.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under existing PRC foreign exchange regulations,
payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made
in foreign currencies without prior approval from State Administration of Foreign Exchange or SAFE by complying with certain procedural
requirements. Therefore, our PRC subsidiary, WFOE is able to pay dividends in foreign currencies to us without prior approval from SAFE,
subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange
regulations, such as the overseas investment registrations by the shareholders of the Company who are PRC residents. Approval from or
registration with appropriate government authorities is, however, required where the RMB is to be converted into foreign currency and
remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may
also at its discretion restrict access in the future to foreign currencies for current account transactions. For our Hong Kong subsidiaries,
our subsidiary in British Virgin Islands and the holding company (&#8220;Non-PRC Entities&#8221;), there is no restrictions on foreign
exchange for such entities and they are able to transfer cash among these entities, across borders and to US investors. Also, there is
no restrictions and limitations on the abilities of Non-PRC Entities to distribute earnings from their businesses, including from subsidiaries
to the parent company or from the holding company to the U.S. investors as well as the abilities to settle amounts owed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a holding company, and we rely on dividends
and other distributions on equity paid by our subsidiaries for our cash and financing requirements, including the funds necessary to pay
dividends and other cash distributions to our shareholders and service any debt we may incur. If any of our subsidiaries incurs debt on
its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions
to us. Current PRC regulations permit our WFOE to pay dividends to the Company only out of its accumulated profits, if any, determined
in accordance with Chinese accounting standards and regulations. In addition, our subsidiaries, VIE and its subsidiaries in China are
required to set aside at least 10% of their after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches
50% of its registered capital. Each such entity in China is also required to further set aside a portion of its after-tax profits to fund
the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although
the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained
earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. In
addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable
to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC
central government and the governments of other countries or regions where the non-PRC resident enterprises are tax resident. Pursuant
to the tax agreement between mainland China and the Hong Kong Special Administrative Region, the withholding tax rate in respect to the
payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. However, if the relevant
tax authorities determine that our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the
relevant tax authorities may adjust the favorable withholding tax in the future. Accordingly, there is no assurance that the reduced 5%
withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce
the amount of dividends we may receive from our PRC subsidiaries.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 9pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of this report, neither the WFOE
nor any of our subsidiaries in Hong Kong has made any dividends or distributions to the Company, the Company has not made any dividends
or distribution to its investors. We intend to keep any future earnings to re-invest in and finance the expansion of our business, and
we do not anticipate that any cash dividends will be paid in the foreseeable future. Under the Cayman Islands law, a Cayman Islands company
may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid
if this would result in the company being unable to pay its debts due in the ordinary course of business. We currently do not have cash
management policies and procedures in place that dictate how funds are transferred through our organization. Rather, the funds can be&#160;transferred
in accordance with the applicable laws and regulations. &#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="font-size: 9pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of this report, no dividends or
distributions have been made between the holding company, its subsidiaries, and consolidated VIEs, or to investors including the U.S.
investors. The holding company, its subsidiaries, and VIE do not have any plan to distribute dividend or settle amounts owed under the
VIE Agreements in the foreseeable future. To the extent cash and/or assets in the business are in the PRC and/or Hong Kong or our PRC
and/or Hong Kong entities, including HKDAEx, International Exchange, Oriental Culture HK, the VIE, and the WFOE, such funds and/or assets
may not be available to fund operations or for other use outside of the PRC and/or Hong Kong due to interventions in or the imposition
of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash and/or assets. The cash
transfer among the holding company, its subsidiaries and VIE is typically transferred through payment for intercompany services or intercompany
borrowing between holding company, subsidiaries and VIE. There are no tax consequences for the intercompany borrowings and the payment
for intercompany services, except for the standard value added taxes and/or income taxes for the revenues and/or profits generated from
such services.<span style="font-size: 9pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 9pt">&#160;</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Selected Condensed Consolidated Financial Schedule of the Company
and Its Subsidiaries and VIE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Set forth below is selected consolidating statements
of income and cash flows for the years ended December 31, 2022 and 2021 and selected balance sheet information as of December 31, 2022
and 2021 showing financial information for the Company (excluding the VIEs), the VIEs, eliminating entries and consolidated information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FOR THE YEAR ENDED DECEMBER 31, 2022</p><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>Holding</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>HK
    Subsidiaries</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>BVI</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>Elimination</b></span></td><td style="white-space: nowrap; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>WFOE</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt"><b>&#160;</b></span></td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td colspan="2" style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 0.5%; text-align: left"></td><td style="width: 5%; text-align: right"></td><td style="white-space: nowrap; width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="width: 0.5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="width: 5%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">14,488,046</span></td><td style="width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="width: 0.5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="width: 5%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">817,659</span></td><td style="width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="width: 0.5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="width: 5%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">1,883,128</span></td><td style="width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="width: 0.5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="width: 0.5%; text-align: left"></td><td style="width: 5%; text-align: right"></td><td style="white-space: nowrap; width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="width: 0.5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="width: 5%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">17,188,833</span></td><td style="width: 0.5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">11,796,388</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">11,796,388</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">11,796,388</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Restricted
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">4,703,323</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">4,703,323</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">4,703,323</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Accounts
    receivable, net</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">207</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">207</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">207</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
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    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Accounts
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">29,311</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">29,311</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Other
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">10,803</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">1,334,866</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">3,107,080</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">3,107,080</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">4,441,946</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Deposit</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">9,300,687</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(1,000,000</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)(d2)</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">5,937</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">9,417,776</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">OTHER ASSETS</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">34,345</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">34,345</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Escrow</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">932,552</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">932,552</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">932,552</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
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    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Intangible
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">740,697</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">740,697</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">76,188</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">76,188</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">816,885</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">39,653,486</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">40,620,453</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(39,268,629</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)(a)</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">41,780,352</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(41,005,310</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(42,493,578</span></td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">59,309,597</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">41,620,453</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">44,667,778</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(40,619,835</span></td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)(b)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">45,668,396</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(51,589,145</span></td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">53,388,848</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">CURRENT
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">70,000</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">103</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left">$<span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="text-indent: 0.125in; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">70,103</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left">$</td><td style="text-align: right"></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">2,889,312</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">2,889,312</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left">$</td><td style="text-align: right"></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">2,959,415</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">28,727</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">28,727</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">28,727</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Deferred
    revenue</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">449,037</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">449,037</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">449,037</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-indent: -0.125in; font-size: 8pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Other
    payables and accrued liabilities</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">11,770</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">11,770</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">278,380</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(178,116</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)(d5)</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
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    <td style="padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">22,350,828</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;(a)</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">124,757</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(124,757</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span>(b)</td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">124,757</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(2,839,315</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">42,078,998</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(39,239,683</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)(a)</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">42,078,998</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(42,078,998</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)(c)</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(40,380,697</span></td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.625in; text-indent: -0.125in; font-size: 8pt; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">Total
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">1,927,477</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">40,620,453</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(42,493,578</span></td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">59,309,597</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">41,620,453</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">44,667,778</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(40,619,835</span></td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">(51,589,145</span></td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">53,388,848</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  </table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left">(a)</td><td style="text-align: justify">To eliminate holding company&#8217;s investment of subsidiaries
outside PRC.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left">(b)</td><td style="text-align: justify">To eliminate receivable as result of contractual agreement
from VIE with VIE&#8217;s equity.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left">(c)</td><td style="text-align: justify">To eliminate holding
company&#8217;s investment of WFOE.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left">(d)</td><td style="text-align: justify">To eliminate intercompany balances:</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td>
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    <td style="text-align: right">460,935 </td>
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  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
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    <td>&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">UNAUDITED CONDENDSED CONSOLIDATED STATEMENTS OF INCOME </span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FOR THE YEAR ENDED DECEMBER 31, 2022 </span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-indent: -0.125in; padding-left: 0.125in"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(4,812</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(4,812</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(4,812</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">7,314,651</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(7,314,651</td><td style="white-space: nowrap; text-align: left">)(b)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Income from subsidiaries</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,315,269</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,045,005</td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left">)(a)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,315,270</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(7,315,270</td><td style="white-space: nowrap; padding-bottom: 1.5pt; text-align: left">)(d)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 4pt">Net income</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,235,686</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(1,270,265</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,315,269</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">(6,045,005</td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,235,686</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,315,269</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,314,651</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(7,314,651</td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,315,269</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(7,315,270</td><td style="white-space: nowrap; padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,235,686</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
eliminate outside PRC subsidiaries income from Holding</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
eliminate VIE income by WFOE</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
eliminate intercompany revenue and expenses for services provided by the Company&#8217;s HK subsidiary to its VIE.</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
eliminate WFOE investment income by Holding</span></td>
</tr></table><div>



</div><p style="margin: 0">&#160;</p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FOR THE YEAR ENDED DECEMBER 31, 2022</span></p><div>



</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center"><span style="font-size: 8pt"><b>&#160;</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><span style="font-size: 8pt"><b>Holding</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><span style="font-size: 8pt"><b>HK Subsidiaries</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><span style="font-size: 8pt"><b>BVI</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><span style="font-size: 8pt"><b>WFOE</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><span style="font-size: 8pt"><b>VIE</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><span style="font-size: 8pt"><b>Total</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><span style="font-size: 8pt"><b>Elimination</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td>
    <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><span style="font-size: 8pt"><b>Consolidated</b></span></td><td style="text-align: center; padding-bottom: 1.5pt"><span style="font-size: 8pt"><b>&#160;</b></span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; width: 28%; text-align: left"><span style="font-size: 8pt">Net cash provided by (used in) operating activities</span></td><td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
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    <td style="width: 1%; text-align: left"><span style="font-size: 8pt">$</span></td><td style="width: 6%; text-align: right"><span style="font-size: 8pt">21,641</span></td><td style="width: 1%; text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 8pt">$</span></td><td style="width: 6%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;</td><td style="width: 1%; text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
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    <td style="width: 1%; text-align: left"><span style="font-size: 8pt">$</span></td><td style="width: 6%; text-align: right"><span style="font-size: 8pt">7,583,355</span></td><td style="width: 1%; text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 8pt">$</span></td><td style="width: 6%; text-align: right"><span style="font-size: 8pt">(1,211,385</span></td><td style="width: 1%; text-align: left"><span style="font-size: 8pt">)</span></td><td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 8pt">$</span></td><td style="width: 6%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td><td style="width: 1%; text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left"><span style="font-size: 8pt">Net cash provided by (used in )investing activities</span></td><td><span style="font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 8pt">&#160;</span></td><td><span style="font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 8pt">(6,408</span></td><td style="text-align: left"><span style="font-size: 8pt">)</span></td><td><span style="font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 8pt">&#160;</span></td><td><span style="font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 8pt">&#160;</span></td><td><span style="font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-size: 8pt">29,398,047</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-size: 8pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>



</div><p style="margin: 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 11; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>3.A. </b>[Reserved]</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>3.B. Capitalization and Indebtedness</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>3.C. Reasons For The Offer And Use Of Proceeds</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>3.D. Risk Factors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>An investment in our ordinary shares involves
a high degree of risk. You should carefully consider the risks and uncertainties described below together with all other information contained
in this annual report, including the matters discussed under the headings &#8220;Forward-Looking Statements&#8221; and &#8220;Operating
and Financial Review and Prospects&#8221; before you decide to invest in our&#160;</i>ordinary shares<i>. We are a holding company with
substantial operations in Hong Kong and China and are subject to a legal and regulatory environment that in many respects differs from
the United States. If any of the following risks, or any other risks and uncertainties that are not presently foreseeable to us, actually
occur, our business, financial condition, results of operations, liquidity and our future growth prospects could be materially and adversely
affected.</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Summary of Risk Factors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An investment in our ordinary shares involves
significant risks. Below is a summary of material risks we face, organized under relevant headings. These risks are discussed more fully
in <i>Item 3. Key Information&#8212;D. Risk Factors</i>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Our Business</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in">
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#9679;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#9679;</p></td>
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    other outbreaks, including the coronavirus (COVID-19), which has caused and may continue to cause business disruptions, resulting in a
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Nan County Public Safety Bureau has frozen certain
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    Nanjing Jinwang which has and could continue to materially and negatively impact the business operations and financial results of the
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Corporate Structure</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.4pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Doing Business in China</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#9679;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></td>
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Uncertainties and quick change in the interpretation
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.4pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Doing Business in Hong Kong</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Ordinary Shares </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-size: 10pt">You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the United States and it may be difficult for a shareholder of ours to effect service of process or to enforce judgements obtained in the United States courts. </span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Our Business</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We have a limited operating history in an
evolving market, which makes it difficult to evaluate our future prospects.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We launched our Company in 2018 and have a limited operating history.
The success of our business depends primarily on the number of collectibles and artwork products listed and traded on our platforms. Therefore,
our ability to continue to attract customers to list, sell and buy collectibles and artwork products on our platform is critical to the
continued success and growth of our business. This in turn will depend on several factors, including our ability to develop new products,
services and markets, manage our growth while maintaining consistent and high-quality services, and make our platform more efficient and
effective for our customers. During the outbreak of COVID-19 and government&#8217;s efforts to contain the spread of the pandemic during
the first half of 2020, our ability to accept, appraise, list new products and provide warehousing services for collectibles and artwork
products as well as our marketing activities have been severely disrupted and hindered due to the office closure, quarantine, travel and
transportation restrictions imposed by the government, which have caused material negative impact on our business and results of operations.
In addition, we originally planned to expand our business internationally, especially in the United States in 2020, including to carry
out a comprehensive brand promotion in the U.S. and cooperate with American collectible and artwork agencies to select Western-themed
collectibles and artworks for listing on our platform. Due to the outbreak of the pandemic in China and the U.S., we delayed the implementation
of our international market and business development plan as our management team is unable to travel to the U.S. visiting office spaces
and meeting with our business partners. Most of the businesses in China have reopened and resumed since the second half of 2020. However,
<span>travel restrictions, quarantine requirements and/or temporary closure of office buildings and facilities
were imposed by local governments due to the outbreak of Omicron variant in Hong Kong and many cities in China, including Shenzhen, Xi&#8217;an,
Shanghai, Guangzhou, Nanjing, Nanchang and Taiyuan in 2022. </span>In early December 2022, Chinese government eased the strict control
measure for COVID-19, which has led to surge in increased infections and disruption in our business operations in December 2022 and January
2023. Any future impact of COVID-19 on our operation results will depend on, to a large extent, future developments and new information
that may emerge regarding the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain
COVID-19 or treat its impact, almost all of which are beyond our control.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="margin: 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As our business develops, or in response to competition,
we may continue to introduce new services or make adjustments to our existing services, or make adjustments to our business model, including
the development of NFT and Metaverse related business and services. In connection with the introduction of new services, or in response
to general economic conditions, we may impose more stringent customer qualifications to ensure the quality of our customers, which may
negatively affect the growth of our business. Any significant change to our business model may not achieve expected results and may have
a material and adverse impact on our financial conditions and results of operations. It is therefore difficult to effectively assess our
future prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we fail to attract potential clients and educate
them about the value of our services, if the market for our marketplace does not develop as we expect, or if we fail to address the needs
of our target market, our business and results of operations will be harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our historical financial results may not
be indicative of our future performance. </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business has achieved rapid growth since our
inception. Our net revenues increased from nil for the period from March 2018 (when we commenced our operations) to approximately $17.6
million for the year ended December&#160;31, 2022&#160;and approximately $37.6 million for year ended December 31, 2021. However, our
historical growth rate and the limited history of our operations make it difficult to evaluate our prospects. We may not be able to sustain
our historically rapid growth or may not be able to grow our business at all. For example, our business, financial condition, and results
of operations have been adversely affected by the outbreak of COVID-19 and actions taken by the government to contain the spread of the
pandemic, especially in 2022. Also, our business operations have been materially and negatively impacted due to the frozen bank accounts
by Nan County Public Safety Bureau. Most of the businesses in China have reopened and resumed since February 2023. However, travel restrictions,
quarantine requirements and/or temporary closure of office buildings and facilities may be imposed by local governments for any resurgence
of COVID-19.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The governmental authorities may issue new orders
of office closures and/or travel and transportation restrictions in China due to the resurgence of the COVID-19 and outbreak of new variants,
therefore, the results of operations for the year of 2022 are still uncertain and may be adversely impacted by any further outbreak or
resurgence of the COVID-19 pandemic.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Nan County Public Safety Bureau has frozen
certain bank accounts of the subsidiaries of Jiangsu Yanggu due to the investigation of major shareholders of the Company and its related
party Nanjing Jinwang which has and could continue to materially and negatively impact the business operations and financial results of
the Company.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 1, 2022, Mr. Huajun Gao and Mr. Aiming
Kong, each an 11.5% shareholder of the Company, were detained by Nan County Public Safety Bureau of Yiyang City, Hunan Province, China.
On July 26, 2022, Nan County People&#8217;s Procuratorate approved the arrest of Mr. Gao and Mr. Kong with charge of illegal business
operation of Nanjing Jinwang Art Purchase E-commerce Co., Ltd., a company controlled by Mr. Gao and Mr. Kong (&#8220;Nanjing Jinwang&#8221;).
On July 1, 2022, the bank accounts of Nanjing Jinwang were frozen by Nan County Public Safety Bureau, including a trust account into which
the customers of the Company deposit their security deposits in order to trade on the Company&#8217;s two online trading platforms which
the Company has entrusted Nanjing Jinwang for escrow.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Also, on July 1, 2022, Nan County Public Safety
Bureau froze certain bank accounts of Kashi Longrui Business Management Services Co., Ltd. (&#8220;Kashi Longrui&#8221;), Kashi Dongfang
Cangpin Culture Development Co., Ltd. (&#8220;Kashi Dongfang&#8221;) and Nanjing Yanyu Information Technology Co., Ltd. (&#8220;Nanjing
Yanyu&#8221;), all subsidiaries of Jiangsu Yanggu Culture Development Co., Ltd., the variable interest entity of the Company in China
(the &#8220;VIE&#8221;) because they, each had business relationship with Nanjing Jinwang.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Neither the Company nor its VIE or subsidiaries
of its VIE has received any notification for enforcement charges from Nan County Public Safety Bureau, other than cash and short term
investment in the frozen bank accounts with balances totaling approximately $16.5 million and due from Nangjng Jinwang of approximately
$3.4 million relating to the Nanjing Jinwang investigation as described above as of December 31, 2022. Mr. Gao and Mr. Kong are not officers,
directors or employees of the Company, its VIE or subsidiaries of the VIE. At the time of such accounts being frozen, the Company&#8217;s
fund deposited with Nanjing Jinwang amounted to $4 million Currently the customers can freely transfer their deposits out of the trust
account and can make their withdrawals based on their actual needs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-align: justify; margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Due to the investigation of Nanjing Jinwang and frozen bank accounts,
the business operations of the Company have been materially and negatively impacted as its customers experienced difficulties withdrawing
their security deposits through online banking and had concerns regarding their deposited funds. The frozen accounts of the subsidiaries
of the VIE have also negatively impacted cash flow for these companies although they have other bank accounts that operate normally for
their daily business operations. The Company has taken remedial measures to assist its customers in withdrawing security deposits, such
as through manual and in person application with the bank to transfer funds, so that they will have confidence in the Company and continue
to list and trade art and collectible products on the online platforms of the Company. Currently the customers can freely transfer their
deposits out of the trust account. The Company has also taken measures to reduce the cost and expenses&#160;for the subsidiaries of the
VIE to respond to cash flow issues. However, there can be no assurance that these measures will restore customer confidence in using the
Company&#8217;s services efficiently or at all and the Company cannot reasonably estimate when the bank accounts for the subsidiaries
of the VIE will be unfrozen by the Nan County Public Safety Bureau.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The investigation of Mr. Gao, Mr. Kong and Nanjing
Jinwang is ongoing. The Company&#160;has and will continue&#160;to communicate with Nan County Public Safety Bureau and other government
authorities to obtain more information regarding the investigation and to attempt to unfreeze the bank accounts for the subsidiaries of
the VIE. Although neither the Company, nor its VIE or subsidiaries of its VIE has received any notification from Nan County Public Safety
Bureau indicating it is a part of the current investigation, we cannot assure you that they won&#8217;t be subject to the investigation
in the future, if that happens, we might face penalties, negative publicity and loss of business which could which will materially and
adversely affect our business operations and financial results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, if Mr. Gao and Mr. Kong are convicted
for any crimes that are disruptive to the order of the socialist market economy and are considered as controlling persons for the domestic
operating companies in China under the New Overseas Listing Rules, it could significantly limit or completely hinder our ability to offer
or continue to offer our securities to investors and cause the value of our securities to significantly decline or become worthless.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The global economy and the financial markets
may negatively affect our business and clients, as well as the supply of and demand for works of art and collectables.</i></b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business is affected by global, national and
local economic conditions since the services we provide are discretionary and we depend, to a significant extent, upon a number of factors
relating to discretionary consumer spending in China and Hong Kong. These factors include economic conditions and perceptions of such
conditions by traders of collectibles and artwork, employment rates, the level of their disposable income, business conditions, interest
rates, availability of credit and levels of taxation in regional and local markets. There can be no assurance that our services will not
be adversely affected by changes in general economic conditions in China, Hong Kong and globally.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 15; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March 2020, the World Health Organization declared
the COVID-19 as a pandemic and the global economy has also been materially negatively affected. This crisis is like no other, the impact
is large and there is continued uncertainty about the duration and intensity of its impact. It is extremely uncertain about China&#8217;s
and global growth forecast, which could seriously affect people&#8217;s investment desires in China and internationally, including investment
in artwork products and collectibles, which could negatively impact our business and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The artwork and collectible markets may be influenced
over time by the overall strength and stability of the global economy and the financial markets such as war in Ukraine and outbreak of
COVID-19, although this correlation may not be immediately evident. In addition, political conditions and world or health events such
as resurgence of COVID-19 may affect our business through their effect on the economy, as well as on the willingness of potential buyers
and sellers to invest and sell art and collectibles in the wake of economic uncertainty.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we become subject to additional scrutiny,
criticism and negative publicity involving U.S.-listed China-based companies, we may have to expend significant resources to investigate
and resolve the matter which could harm our business operations, and our reputation and could result in a loss of your investment in our
ordinary shares, especially if such matter cannot be addressed and resolved favorably.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Recently, U.S. public companies that have substantially
all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators
and regulatory agencies. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities,
a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto
and, in some cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of
many U.S.-listed China-based companies has decreased in value and, in some cases, has become virtually worthless. Many of these companies
have been subject to shareholder lawsuits and SEC enforcement actions and have conducted internal and external investigations into the
allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us and our business.
If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend
significant resources to investigate such allegations and/or defend our Company. This situation may be a major distraction to our management.
If such allegations are not proven to be groundless, our business operations will be severely hindered and your investment in our ordinary
shares could be rendered worthless.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The demands for art and collectibles are
unpredictable, which may cause significant variability in our results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The demand for art is influenced not only by overall
economic conditions, but also by changing trends in the art market as to which collecting categories and artists are most sought after
and by the preferences of individual collectors. These conditions and trends are difficult to predict and may adversely impact our ability
to choose the categories for listing or advertising, potentially causing significant variability in our results of operations from period
to period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>A decline in trading volumes will decrease
our trading revenues.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Trading volumes are directly affected by economic,
political and market conditions, broad trends in business and finance, unforeseen market closures or other disruptions in trading such
as office and warehouse closure and transportation restrictions imposed by the government due to the COVID-19, which could cause the lack
of artwork products and collectibles being listed on our platform for trading, the level and volatility of interest rates, inflation,
changes in price of collectibles and artwork and the overall level of investor confidence. In recent years, trading volumes across our
markets have fluctuated depending on market conditions and other factors beyond our control. Because a significant percentage of our revenues
are tied directly to the trading volumes on our markets, it is likely that a general decline in trading volumes would lower revenues and
may adversely affect our operating results. Declines in trading volumes may also impact our market share or pricing structures and adversely
affect our business and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 16; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Due to the nature of our business, valuable
works of art are stored at our contracted facilities. Such works of art could be subject to damage or theft, which could have a material
adverse effect on our operations, reputation and brand.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Valuable works of art are stored at our facilities.
Although we maintain security measures at our premises, valuable collectibles and artwork may be subject to damage or theft. The damage
or theft of valuable property despite these security measures could have a material adverse impact on our business and reputation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>System and network limitations or failures
could harm our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our businesses depend on the integrity and performance
of the technology, computer and communications systems supporting them. If our systems cannot expand to cope with increased demand or
otherwise fail to perform, we could experience unanticipated disruptions in service, slower response times and delays in the introduction
of new services. These consequences could result in financial losses and decreased customer service and satisfaction. If trading volumes
increase unexpectedly or other unanticipated events occur, we may need to expand and upgrade our technology, transaction processing systems
and network infrastructure. We do not know whether we will be able to accurately project the rate, timing or cost of any increases, or
expand and upgrade our systems and infrastructure to accommodate any increases in a timely manner.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The success of our business depends on our
ability to market and advertise the services we provide effectively.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our ability to establish effective marketing campaigns
is the key to our success. Our advertisements promote our corporate image and our services. If we are unable to increase awareness of
our brand, the benefits of using our trading platform to invest in collectibles and artwork, and that such use of our platform is secure,
we may not be able to attract new traders. Our marketing activities were disrupted due to travel restrictions and public gathering bans
for large conferences and marketing events imposed by the government due to COVID-19 during the outbreak of COVID-19 and they might face
similar disruptions if there is a resurgence of COVID-19. Our marketing activities may not be successful in promoting our services or
in retaining and increasing our trader base. We cannot assure you that our marketing programs will be adequate to support our future growth,
which may result in a material adverse effect on our results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>If we do not compete effectively, our results of operations could
be harmed.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The art e-commerce industry is highly fragmented
and competitive with relatively low entry barriers. We compete primarily on the basis of our technology, comprehensive customer service
and brand recognition. Our competitors may compete with us in the following ways:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-size: 10pt">provide services that are similar to ours, or that are more attractive to customers than ours;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-size: 10pt">provide products and services we do not offer;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-size: 10pt">offer better, faster and more reliable technology; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">market, promote and provide their services more effectively.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Although we do not compete against other trading
service providers solely based on prices, if our competitors offer their services at lower prices, we may be forced to provide aggressive
discounts or rebates to our customers and our commission and fees may decrease. Reduction in commissions and fees without a commensurate
reduction in expenses would lower our profitability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 17; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, there are over 10 art e-commerce
platforms operating in Hong Kong, through which individual customers can open accounts and trade all kinds of artworks on those exchanges.
Certain Internet companies also launched art e-commerce trading services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Some of these competitors may have greater financial
resources or a larger customer base than we do, and if we fail to compete effectively, our market position, business prospects and results
of operations would be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The art e-commerce market is highly competitive
and many traditional art galleries and auction houses may provide a platform for artwork owners to sell their collections. However, their
trading model is substantially different from ours. As of December 31, 2022, there were over 10 active art e-commerce platforms operating
nationwide in China. The trading service providers compete with each other for customers and trading volume based on factors including
brand, technology, research and customer services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Although some of our competitors may have greater
financial resources or larger customer bases than we do, we believe that our proprietary technology platform, our comprehensive customer
services and strong brand recognition in the industry, will enable us to compete effectively in the fast evolving art e-commerce trading
industry in Hong Kong and PRC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our competitors operate with different business
models, have different cost structures or participate selectively in different market segments. They may ultimately prove more successful
or more adaptable to new regulatory, technological and other developments. Many of our current and potential competitors have significantly
more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion,
sale and support of their service offerings. Our competitors may also have longer operating histories, a more extensive client base, greater
brand recognition and brand loyalty and broader partner relationships than us. Additionally, a current or potential competitor may acquire
one or more of our existing competitors or form a strategic alliance with one or more of our competitors. Our competitors may be better
at developing new products, offering more attractive terms or lower fees, responding faster to new technologies and undertaking more extensive
and effective marketing campaigns. In response to competition and in order to grow or maintain the volume of our business, we may have
to charge lower fees, which could materially and adversely affect our business and results of operations. If we are unable to compete
with such companies and meet the need for innovation in our industry, the demand for our services and products could stagnate or substantially
decline, we could experience reduced revenues or our marketplace could fail to achieve or maintain more widespread market acceptance,
any of which could harm our business and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our annual and interim results may fluctuate
significantly and may not fully reflect the underlying performance of our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our annual and interim results of operations,
including the levels of our net revenues, expenses, net income (loss) and other key metrics, may vary significantly in the future due
to a variety of factors, some of which are outside of our control, and period-to-period comparisons of our operating results may not be
meaningful, especially given our limited operating history. Accordingly, the results for any one period are not necessarily an indication
of future performance. Fluctuations in annual or interim results may adversely affect the market price of our ordinary shares. Factors
that may cause fluctuations in our financial results include:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 18; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-size: 10pt">health epidemics or pandemics, such as the coronavirus outbreak (COVID-19) and government&#8217;s action to contain the spread of the pandemic. </span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Despite our marketing efforts, we may not
be able to promote and maintain our brand in an effective and cost-efficient way and our business and results of operations may be harmed
accordingly.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that effectively developing and maintaining
awareness of our brand is critical to attracting new and retaining existing clients. Successful promotion of our brand and our ability
to attract quality clients depends largely on the effectiveness of our marketing efforts and the success of the channels we use to promote
our services. &#160;Our efforts to build our brand have caused us to incur marketing and advertising expenses in the amount of approximately
$0.5 million in 2022 and $1.1 million in 2021, respectively. It is likely that our future marketing efforts will require us to incur significant
additional expenses as we expand our business. These efforts may not result in increased revenues in the immediate future or at all and,
even if they do, any increases in revenues may not offset the expenses incurred. If we fail to successfully promote and maintain our brand
while incurring substantial expenses, our results of operations and financial condition would be adversely affected, which may impair
our ability to grow our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Fraudulent activity in our marketplace could
negatively impact our operating results, brand and reputation and cause the use of our services to decrease.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are subject to the risk of fraudulent activity
both in our marketplace and associated with traders and third parties handling their information. Our resources, technologies and fraud
detection tools may be insufficient to accurately detect and prevent fraud. Increases in fraudulent activity, either in our marketplace
or associated with participants of our marketplace, could negatively impact our brand and reputation, reduce the volume of transactions
facilitated through our platform and lead us to take additional steps to reduce fraud risk, which could increase our costs. High profile
fraudulent activity could even lead to regulatory intervention, and may divert our management&#8217;s attention and cause us to incur
additional expenses and costs. Although we have not experienced any material business or reputational harm as a result of fraudulent activities
in the past, we cannot rule out the possibility that any of the foregoing may occur, causing harm to our business or reputation in the
future. If any of the foregoing were to occur, our results of operations and financial condition could be materially and adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not be able to prevent others from
unauthorized use of our intellectual property, which could harm our business and competitive position.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We regard our trademarks, domain names, know-how,
proprietary technologies and similar intellectual property as critical to our success, and we rely on a combination of intellectual property
laws and contractual arrangements, including confidentiality and non-compete agreements with our employees and others, to protect our
proprietary rights. We cannot assure you that any of our intellectual property rights will not be challenged, invalidated, circumvented
or misappropriated, or such intellectual property will be sufficient to provide us with competitive advantages. In addition, because of
the rapid pace of technological change, parts of our business rely on technologies developed or licensed by third parties, and we may
not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms, or at all.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">It is often difficult to register, maintain and
enforce intellectual property rights in China. Statutory laws and regulations are subject to judicial interpretation and enforcement and
may not be applied consistently due to the lack of clear guidance on statutory interpretation. Confidentiality, invention assignment and
non-compete agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach.
Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in China.
Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we take may be inadequate to prevent
the misappropriation of our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights,
such litigation could result in substantial costs and a diversion of our managerial and financial resources. We can provide no assurance
that we will prevail in such litigation. In addition, our trade secrets may be leaked or otherwise become available to, or be independently
discovered by, our competitors. To the extent that our employees or consultants use intellectual property owned by others in their work
for us, disputes may arise as to the rights in related know-how and inventions. Any failure in protecting or enforcing our intellectual
property rights could have a material adverse effect on our business, financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our annual effective income tax rate can
change significantly as a result of a combination of changes in our foreign earnings and other factors, including changes in tax laws
or changes made by regulatory authorities.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our consolidated effective income tax rate is
equal to our total income tax expense (benefit) as a percentage of total book income (loss) before tax. Losses in one jurisdiction may
not be used to offset profits in other jurisdictions and may cause an increase in our tax rate. Changes in statutory income tax rates
and laws, as well as initiation of tax audits by local and foreign authorities, could impact the amount of income tax liability and income
taxes we are required to pay. In addition, any fluctuation in the earnings (or losses) of the jurisdictions and assumptions used in the
calculation of income taxes could have a significant effect on our consolidated effective income tax rate. Furthermore, our effective
tax rate could increase if we are unable to generate sufficient future taxable income in certain jurisdictions, or if we are otherwise
required to increase our valuation allowances against our deferred tax assets.<b><i>&#160;</i></b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are subject to taxation in multiple jurisdictions.
As a result, any adverse development in the tax laws of any of these jurisdictions or any disagreement with our tax positions could have
a material adverse effect on our business, consolidated financial condition or results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are subject to taxation in, and to the tax
laws and regulations of, multiple jurisdictions, particularly in the People&#8217;s Republic of China and Hong Kong. In addition, tax
authorities in any applicable jurisdiction, may disagree with the positions we have taken or intend to take regarding the tax treatment
or characterization of any of our transactions. In the event any applicable tax authorities effectively sustained their positions which
are different from our tax treatment of any of our transactions, it could have a significant adverse impact on our business, consolidated
results of our operations as well as consolidated financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be subject to intellectual property
infringement claims, which may be expensive to defend and may disrupt our business and operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We cannot be certain that our operations or any
aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how or other intellectual
property rights held by third parties. We may be from time to time in the future subject to legal proceedings and claims relating to the
intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights,&#160;know-how&#160;or other
intellectual property rights that are infringed by our products, services or other aspects of our business without our awareness. Holders
of such intellectual property rights may seek to enforce such intellectual property rights against us in China, the United States or other
jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management&#8217;s time and other
resources from our business and operations to defend against these claims, regardless of their merits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, the application and interpretation
of China&#8217;s intellectual property laws and the procedures and standards for granting trademarks, patents, copyrights, know-how or
other intellectual property rights in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory
authorities would agree with our analysis. If we were found to have violated the intellectual property rights of others, we may be subject
to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees
or be forced to develop alternatives of our own. As a result, our business and results of operations may be materially and adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>From time to time we may evaluate and potentially
consummate strategic investments or acquisitions, which could require significant management attention, disrupt our business and adversely
affect our financial results.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may evaluate and consider strategic investments,
combinations, acquisitions or alliances to further increase the value of our marketplace and better serve our clients. These transactions
could be material to our financial condition and results of operations if consummated. If we are able to identify an appropriate business
opportunity, we may not be able to successfully consummate the transaction and, even if we do consummate such a transaction, we may be
unable to obtain the benefits or avoid the difficulties and risks of such transaction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Strategic investments or acquisitions will involve
risks commonly encountered in business relationships, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may not make any investments or acquisitions,
or any future investments or acquisitions may not be successful, may not benefit our business strategy, may not generate sufficient revenues
to offset the associated acquisition costs or may not otherwise result in the intended benefits. In addition, we cannot assure you that
any future investment in or acquisition of new businesses or technology will lead to the successful development of new or enhanced products
and services or that any new or enhanced products and services, if developed, will achieve market acceptance or prove to be profitable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business depends on the continued efforts
of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business
may be severely disrupted.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business operations depend on the continued
services of our senior management, particularly the executive officers named in this report. While we have the ability to provide different
incentives to our management, we cannot assure you that we can continue to retain their services. If one or more of our key executives
were unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, our future growth
may be constrained, our business may be severely disrupted and our financial condition and results of operations may be materially and
adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. In addition, although we have
entered into confidentiality and non-competition agreements with our management, there is no assurance that any member of our management
team will not join our competitors or form a competing business. If any dispute arises between our current or former officers and us,
we may have to incur substantial costs and expenses in order to enforce such agreements in China or Hong Kong, or we may be unable to
enforce them at all.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We have engaged in transactions with&#160;related&#160;parties,&#160;and
such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.
</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have entered into a number of transactions
with related parties, including our&#160;shareholders, directors and executive officers.&#160;For example, we have entered into several
transactions with Nanjing Culture and Artwork Property Exchange Co., Ltd., Jinling Cultural Property Rights Exchange Co., Ltd. and Nanjing
Jinwang Art Purchase E-commerce Co., Ltd., which are controlled or owned by Mr. Huajun Gao and/or Mr. Aimin Kong, each is a 11.5% beneficial
shareholder of the Company. We also entered into advertising contract with Kashi Jinwang Art Purchase E-commerce Co., Ltd., as online
advertising service provider to promoting our collectibles and artworks. For the year ended December 31, 2022, our related parties accounts
payable, other payables, net revenues, cost of revenues, selling and marketing, and general and administrative expenses accounted for
0.0%, 1.1%, 0.9%, 30.5%, 0.6% and 3.7% of our total accounts payable, other payables, net revenues, cost of revenues, selling and marketing,
and general and administrative expenses, respectively. For the year ended December 31, 2021, our related parties accounts payable, other
payables, net revenues, cost of revenues, selling and marketing, and general and administrative expenses accounted for 0.0%, 0.0%, 0.6%,
30.1%, 2.3% and 2.7% of our total accounts payable, other payables, net revenues, cost of revenues, selling and marketing, and general
and administrative expenses, respectively. See &#8220;<i>Item 7.B. Related Party Transactions</i>.&#8221;&#160; We may in the future enter
into additional transactions with entities in which members of our board of directors and other related parties hold ownership interests.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Transactions with the entities in which related
parties hold ownership interests present potential for conflicts of interest, as the interests of these entities and their shareholders
may not align with the interests of the Company and our shareholders with respect to the negotiation of, and certain other matters related
to, our lease and technology services to such entities. Conflicts of interest may also arise in connection with the exercise of contractual
remedies under these transactions, such as the treatment of events of default.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently, our board of directors has authorized
the audit committee to review and approve all related party transaction. We rely on the laws of Cayman Islands, which provide that directors
owe a duty of care and a duty of loyalty to our Company. Nevertheless, we may have achieved more favorable terms if such transactions
had not been entered into with related parties and these transactions, individually or in the aggregate, may have an adverse effect on
our business and results of operations or may result in government enforcement actions or other litigation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The relative lack of public company experience
of our management team may put us at a competitive disadvantage.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our management team lacks public company experience,
which could impair our ability to comply with legal and regulatory requirements such as those imposed by the Sarbanes-Oxley Act of 2002,
(&#8220;Sarbanes-Oxley&#8221;). Our senior management does not have much experience managing a publicly-traded company. Such responsibilities
include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may be unable
to implement programs and policies in an effective and timely manner or that adequately respond to the increased legal, regulatory and
reporting requirements associated with being a publicly traded company. Our failure to comply with all applicable requirements could lead
to the imposition of fines and penalties, distract our management from attending to the management and growth of our business, result
in a loss of investor confidence in our financial reports and have an adverse effect on our business and stock price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we fail to establish and maintain proper
internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could
be impaired.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to Section 404 of the Sarbanes-Oxley
Act, we are required to file a report by our management on our internal control over financial reporting. However, while we remain an
emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued
by our independent registered public accounting firm. The presence of material weaknesses in internal control over financial reporting
could result in financial statement errors which, in turn, could lead to errors in our financial reports and/or delays in our financial
reporting, which could require us to restate our operating results. We might not identify one or more material weaknesses in our internal
controls in connection with evaluating our compliance with Section 404 of the Sarbanes-Oxley Act. In order to maintain and improve the
effectiveness of our disclosure controls and procedures and internal controls over financial reporting, we need to expend significant
resources and provide significant management oversight. Implementing any appropriate changes to our internal controls may require specific
compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take
a significant period of time to complete and divert management&#8217;s attention from other business concerns. These changes may not,
however, be effective in achieving and maintaining the adequacy of our internal control.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we are unable to conclude that we have effective
internal controls over financial reporting, investors may lose confidence in our operating results, the price of the ordinary shares could
decline and we may be subject to litigation or regulatory enforcement actions. In addition, if we are unable to meet the requirements
of Section 404 of the Sarbanes-Oxley Act, we may be subject to investigation or sanctions by the SEC and our ordinary shares may not be
able to remain listed on the Nasdaq Capital Market.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Competition for employees is intense, and
we may not be able to attract and retain the qualified and skilled employees needed to support our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe our success depends on the efforts
and talent of our employees, including risk management, information technology, financial and marketing personnel. Our future success
depends on our continued ability to attract, develop, motivate and retain qualified and skilled employees. Competition for highly skilled
marketing, real estate, technical, risk management and financial personnel is extremely intense. We may not be able to hire and retain
these personnel at compensation levels consistent with our existing compensation and salary structure. Some of the companies with which
we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, we invest significant time and expense
in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees,
we could incur significant expenses in hiring and training their replacements, and the quality of our products and services could diminish,
resulting in a material adverse effect to our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Increases in labor costs in the PRC may
adversely affect our business and results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The economy in China has experienced increases
in inflation and labor costs in recent years. As a result, average wages in the PRC are expected to continue to increase. In addition,
we are required by PRC laws and regulations to pay various statutory employee benefits, including pension, housing funds, medical insurance,
work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our
employees. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee benefits,
and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. We expect that
our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to control our labor costs or pass
on these increased labor costs to our users by increasing the fees of our services, our financial condition and results of operations
may be adversely affected.</p><div>

</div><p style="margin: 0">&#160;</p><div>

</div><p style="margin: 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we cannot maintain our corporate culture
as we grow, we could lose the innovation, collaboration and focus that contribute to our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that a critical component of our success
is our corporate culture, which we believe fosters innovation, encourages teamwork and cultivates creativity.&#160;As we develop the infrastructure
of a public company and continue to grow, we may find it difficult to maintain these valuable aspects of our corporate culture. Any failure
to preserve our culture could negatively impact our future success, including our ability to attract and retain employees, encourage innovation
and teamwork and effectively focus on and pursue our corporate objectives.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We do not have any business insurance coverage.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Insurance companies in China currently do not
offer as extensive an array of insurance products as insurance companies in more developed economies. Currently, we do not have any business
liability or disruption insurance to cover our operations. We have determined that the costs of insuring for these risks and the difficulties
associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Any uninsured
business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect
on our results of operations and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We face risks related to health epidemics
and other outbreaks, including the coronavirus (COVID-19), which has caused and may continue to cause business disruptions, resulting
in a material, adverse impact to our financial condition and results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In recent years, there have been outbreaks of
epidemics in various countries, including China. Recently, there was an outbreak of a novel strain of coronavirus (COVID-19) in China,
which has spread rapidly to many parts of the world, including Hong Kong and the U.S. In March 2020, the World Health Organization declared
the COVID-19 a pandemic. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of office buildings
and facilities in China and in the U.S.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our results of operations have been materially adversely affected by
the outbreak of COVID-19. During the outbreak of COVID-19 and government&#8217;s efforts to contain the spread of the pandemic, our ability
to accept, appraise, list new products and provide warehousing services for collectibles and artwork products as well as our marketing
activities have been severely disrupted and hindered due to the office closure, travel and transportation restrictions imposed by the
government during the first half of 2020, which have caused a material negative impact on our business and results of operations in 2020.
Most of the businesses in China have reopened and resumed since the second half of 2020. However, <span>travel
restrictions, quarantine requirements and/or temporary closure of office buildings and facilities were imposed by local governments due
to the outbreak of Omicron variant in Hong Kong and many cities in China, including Shenzhen, Xi&#8217;an, Shanghai, Guangzhou, Nanjing,
Nanchang and Taiyuan in 2022. </span>In early December 2022, Chinese government eased the strict control measure for COVID-19, which has
led to surge in increased infections and disruption in our business operations in December 2022 and January 2023. The government authorities
may issue new orders of office closure, travel and transportation restrictions due to the resurgence of COVID-19 and new variants. Any
potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the
duration and severity of COVID-19 and the actions taken by governmental authorities and other entities to contain COVID-19 or treat its
impact, almost all of which are beyond our control. Potential impacts include, but are not limited to, the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 0.5in">&#160;</td>
    <td style="vertical-align: top; width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">temporary closure of offices and warehouse, travel restrictions, cancellation of marketing and promotion activities and in person meetings or suspension of transportation of collectibles and artworks between our customers and our warehouse, which may materially adversely affect our financial condition and operating results;</span></td></tr>
  <tr>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to market or invest in collectibles and artwork, which may materially adversely impact our revenue;</span></td></tr>
  <tr>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">our customers may require additional time to pay us or fail to pay us at all, which could significantly increase our accounts receivable and require us to record additional allowances for doubtful accounts. We have provided and may continue to provide significant incentives to existing and potential customers, which may in turn materially adversely affect our financial condition and operating results;</span></td></tr>
  <tr>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the operations of our business partners, such as appraisal firms and express delivery companies have been and could continue to be negatively impacted by the further outbreak or resurgence of COVID-19, which may negatively impact our services to our customers, or result in loss of customers or disruption of our business, which may in turn materially adversely affect our financial condition and operating results;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 0.5in">&#160;</td>
    <td style="vertical-align: top; width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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  <tr>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The situation remains highly uncertain for any
further outbreak or resurgence of the COVID-19 and new variants. It is therefore difficult for the Company to estimate the impact on our
business or operating results that might be adversely affected by any further outbreak or resurgence of COVID-19 and new variants. Potential
impact to our results of operations will also depend on future developments and new information that may emerge regarding COVID-19 and
the actions taken by governmental authorities and other entities to contain COVID-19 and/or mitigate its impact, almost all of which are
beyond our control.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In general, our business could be materially adversely
affected by the effects of epidemics or pandemic, including, but not limited to, the COVID-19, avian influenza, severe acute respiratory
syndrome (SARS), the influenza A virus, Ebola virus, or other outbreaks. In response to an epidemic or other outbreaks, government and
other organizations may adopt regulations and policies that could lead to severe disruption to our daily operations, including temporary
closure of our offices and other facilities. These severe conditions may cause us and/or our partners to make internal adjustments, including
but not limited to, temporarily closing down businesses, limiting business hours, and setting restrictions on travel and/or visits with
clients and partners for a prolonged period of time. Various impacts arising from a severe condition may cause business disruptions, resulting
in a material, adverse impact to our financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Corporate Structure</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If the PRC government deems that the contractual
arrangements in relation to the consolidated variable interest entity do not comply with PRC regulatory restrictions on foreign investment
in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject
to severe penalties or be forced to relinquish our interests in those operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a Cayman Islands exempted company and our
PRC subsidiary is considered a foreign invested enterprise. To comply with PRC laws and regulations, we conduct our operations in China
through a series of contractual arrangements entered into among the WFOE, the VIE and its wholly owned subsidiaries and the shareholders
of the VIE. As a result of these contractual arrangements, we exert control over the VIE and consolidate its operating results in our
financial statements under U.S. GAAP. For a detailed description of these contractual arrangements, see &#8220;Corporate History and Structure.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the opinion of our PRC counsel, Taikun Law
Firm, our current ownership structure, the ownership structure of our PRC subsidiary and consolidated VIE and its wholly owned subsidiaries,
and the contractual arrangements among the WFOE, the VIE and the shareholders of the VIE are not in violation of existing PRC laws, rules
and regulations; and these contractual arrangements are valid, binding and enforceable in accordance with their terms and applicable PRC
laws and regulations currently in effect. However, Taikun Law Firm has also advised us that there are substantial uncertainties regarding
the interpretation and application of current or future PRC laws and regulations and there can be no assurance that the PRC government
will ultimately take a view that is consistent with the opinion of our PRC counsel.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If the PRC government finds that our contractual
arrangements do not comply with future Chinese laws and regulations, the relevant PRC regulatory authorities, including the CSRC, would
have broad discretion in dealing with such violations or failures, including, without limitation:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">discontinuing or placing restrictions or onerous conditions on our operations;&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">imposing fines, confiscating the income from the WFOE or the VIE and its subsidiaries, or imposing other requirements with which we or the VIE and its subsidiaries may not be able to&#160;comply;&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over the VIE and its subsidiaries;&#160;&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">restricting or prohibiting our use of the proceeds of financings to fund our business and operations in&#160;China; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">taking other regulatory or enforcement actions that could be harmful to our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The imposition of any of these penalties would
result in a material and adverse effect on our ability to conduct our business. In addition, it is unclear what impact the PRC government
actions would have on us and on our ability to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial
statements, if the PRC government authorities were to find the VIE structure and contractual arrangements to be in violation of PRC laws
and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities of the VIE
and its subsidiaries or our right to receive substantially all of the economic benefits and residual returns from the VIE and its subsidiaries
and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate
the financial results of the VIE and its subsidiaries in our consolidated financial statements. Either of these results, or any other
significant penalties that might be imposed on us in this event, would have a material adverse effect on our financial condition and results
of&#160;operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We rely on contractual arrangements with
the VIE and the shareholders of the VIE for our business operations, which may not be as effective as direct ownership in providing operational
control.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have relied and expect to continue to rely
on contractual arrangements with Jiangsu Yanggu Culture Development Co., Ltd. (&#8220;Jiangsu Yanggu&#8221;) and Jiangsu Yanggu&#8217;s
current management to operate our business. For a description of these contractual arrangements, see &#8220;Corporate History and Structure.&#8221;
These contractual arrangements may not be as effective as direct ownership in providing us with control over the consolidated VIE and
its subsidiaries. For example, the consolidated variable interest entity and their shareholders could breach their contractual arrangements
with us by, among other things, failing to conduct their operations, including providing technical and warehouse services, or taking other
actions that are detrimental to our interests.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we had direct ownership of the VIE and its
subsidiaries, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE and its
subsidiaries, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational
levels. However, under the current contractual arrangements, we rely on the performance by the consolidated variable interest entity and
its shareholders of their obligations under the contracts to exercise control over the consolidated VIE and its subsidiaries. The shareholders
of the consolidated variable interest entity may not act in the best interests of our Company or may not perform their obligations under
these contracts. Such risks exist throughout the period in which we intend to operate our business through the contractual arrangements
with the consolidated VIE and its subsidiaries. Although we have the right to replace any shareholder of the consolidated variable interest
entity under the contractual arrangements, if any shareholder of the consolidated variable interest entity is uncooperative or any dispute
relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC
laws and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. See
<i>&#8220;&#8212;Any failure by the consolidated variable interest entity or its shareholders to perform their obligations under our contractual
arrangements with them would have a material adverse effect on our business</i>.&#8221; Therefore, our contractual arrangements with the
consolidated VIE and its subsidiaries may not be as effective in ensuring our control over the relevant portion of our business operations
as direct ownership would be.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Any failure by the consolidated VIE or its
shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If the consolidated VIE or its shareholders fail
to perform their respective obligations under the contractual arrangements or if any physical instruments, such as chops and seals of
the VIE, are used without our authorization to enter into contractual arrangements in China, we may have to incur substantial costs and
expend additional resources to seek legal remedies under PRC laws including specific performance or injunctive relief, and/or claiming
damages, which we cannot assure you will be effective under PRC laws. For example, if the shareholders of the VIE were to refuse to transfer
their equity interest in the VIE to us or our designee if we exercise the purchase option pursuant to these contractual arrangements,
or if they were otherwise to act in bad faith toward us, then we may have to take legal action to compel them to perform their contractual
obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All of the agreements under our contractual arrangements
are governed by PRC laws and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be
interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures. The legal system in
the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system
could limit our ability to enforce these contractual arrangements. Meanwhile, there are very few precedents and little formal guidance
as to how contractual arrangements in the context of a consolidated variable interest entity should be interpreted or enforced under PRC
laws. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary.
In addition, under PRC laws, rulings by arbitrators are final and parties cannot appeal arbitration results in court unless such rulings
are revoked or determined unenforceable by a competent court. If the losing parties fail to carry out the arbitration awards within a
prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition
proceedings, which would require additional expenses and delay. In the event that we are unable to enforce these contractual arrangements,
or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to
exert effective control over the consolidated VIE and its subsidiaries, and our ability to conduct our business may be negatively affected.
See &#8220;&#8212;<i>Risks Related to Doing Business in China&#8212; Uncertainties and quick change in the interpretation and enforcement
of Chinese laws and regulations with little advance notice could result in a material and negative impact on our business operations,
decrease the value of our securities and limit the legal protections available to you and us<b>.</b></i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The shareholders of the consolidated VIE
may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Forty percent of the equity interests of Jiangsu
Yanggu are held by Aimin Kong and Huajun&#160;Gao. Their interests in Jiangsu Yanggu may differ from the interests of our Company as a
whole. These shareholders may breach, or cause the consolidated variable interest entity to breach, the existing contractual arrangements
we have with them and the consolidated variable interest entity, which would have a material adverse effect on our ability to effectively
control the consolidated VIE and its subsidiaries and receive economic benefits from them. For example, the shareholders may be able to
cause our agreements with Jiangsu Yanggu to be performed in a manner adverse to us by, among other things, failing to remit payments due
under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise, any or all of
these shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently, we do not have any arrangements to
address potential conflicts of interest between these shareholders and our Company, except that we could exercise our purchase option
under the exclusive option agreements with these shareholders to request them to transfer all of their equity interests in Jiangsu Yanggu
to a PRC entity or individual designated by us, to the extent permitted by PRC laws. If we cannot resolve any conflict of interest or
dispute between us and the major shareholders of Jiangsu Yanggu, we would have to rely on legal proceedings, which could result in the
disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Contractual arrangements in relation to
the consolidated variable interest entity and its subsidiaries may be subject to scrutiny by the PRC tax authorities and they may determine
that we or our PRC consolidated VIE and its subsidiaries owe additional taxes, which could negatively affect our financial condition
and the value of your investment.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under applicable PRC laws and regulations, arrangements
and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable
year when the transactions are conducted. The PRC enterprise income tax law requires every enterprise in China to submit its annual enterprise
income tax return together with a report on transactions with its related parties to the relevant tax authorities. The tax authorities
may impose reasonable adjustments on taxation if they have identified any related party transactions that are inconsistent with arm&#8217;s
length principles. We may face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements
between the WFOE, our wholly-owned subsidiary in China, the consolidated VIE in China, and the shareholders of the VIE were not entered
into on an arm&#8217;s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules
and regulations, and adjust the VIE&#8217;s income in the form of a transfer pricing adjustment. A transfer pricing adjustment could,
among other things, result in a reduction of expense deductions recorded by the VIE and its subsidiaries for PRC tax purposes, which could
in turn increase their tax liabilities without reducing the WFOE&#8217;s tax expenses. In addition, if the WFOE requests that the shareholders
of the VIE transfer their equity interests in the VIE at nominal or no value pursuant to these contractual arrangements, such transfer
could be viewed as a gift and subject the VIE to PRC income tax. Furthermore, the PRC tax authorities may impose late payment fees and
other penalties on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be
materially and adversely affected if the consolidated VIE and its subsidiaries tax liabilities increase or if they are required to pay
late payment fees and other penalties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may lose the ability to use and enjoy
assets held by the consolidated VIE and its subsidiaries that are material to the operations of our business if one or more of the entities
goes bankrupt or becomes subject to a dissolution or liquidation proceeding.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The consolidated VIE and its subsidiaries hold
certain assets that are material to the operation of our business, including certain domain names, supporting system and equipment for
our online trading platform. Under the contractual arrangements, the consolidated VIE may not and its shareholders may not cause them
to, in any manner, sell, transfer, mortgage or dispose of their assets or their legal or beneficial interests in the business without
our prior consent. However, in the event the consolidated VIE&#8217;s shareholders breach these contractual arrangements and voluntarily
liquidate the consolidated VIE and its subsidiaries or the consolidated VIE and its subsidiaries declare bankruptcy and all or part of
their assets become subject to liens or rights of third-party creditors, or are otherwise disposed of without our consent, we may be unable
to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and
results of operations. If the consolidated VIE and its subsidiaries undergo a voluntary or involuntary liquidation proceeding, independent
third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could
materially and adversely affect our business, financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Doing Business in China</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Changes in China&#8217;s economic, political
or social conditions or government policies could have a material adverse effect on our business and results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A substantial part of our operations are located
in China. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree
by political, economic and social conditions in China generally and by continued economic growth in China as a whole.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Chinese economy differs from the economies
of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control
of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of improved corporate
governance in business enterprises, a substantial portion of productive assets in China are still owned by the government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese
government also exercises significant control over China&#8217;s economic growth through allocating resources, controlling payment of
foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">While the Chinese economy has experienced significant
growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government
has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit
the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may
be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese
government has implemented certain measures, including interest rate increases, to control the pace of economic growth. These measures
may cause decreased economic activity in China, and since 2012, China&#8217;s economic growth has slowed down. Any prolonged slowdown
in the Chinese economy may reduce the demand for our products and services and materially and adversely affect our business and results
of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Uncertainties and quick change in the interpretation
and enforcement of Chinese laws and regulations with little advance notice could result in a material and negative impact on our business
operations, decrease the value of our securities and limit the legal protections available to you and us.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PRC legal system is based on written statutes,
and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system
continues to rapidly evolve, the interpretations of many laws, regulations and rules&#160;are not always uniform and enforcement of these
laws, regulations and rules&#160;involves uncertainties. The enforcement of laws and that rules and regulations in China can change quickly
with little advance notice and the risk that the Chinese government may intervene or influence our operations at any time, or may exert
more control over offerings conducted overseas and/or foreign investment in China- based issuers, could result in a material change in
our operations and/or the value of our securities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 6, 2021, the General Office of the Communist
Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal activities
in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant
governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over
China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.
On February 17, 2023, the CSRC released the New Overseas Listing Rules with five interpretive guidelines, which took effect on March 31,
2023. The New Overseas Listing Rules require Chinese domestic enterprises to complete filings with relevant governmental authorities and
report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing
in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; c) a domestic
company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of
shares or other means. According to the Notice on Arrangements for Overseas Securities Offering and Listing by Domestic Enterprises, published
by the CSRC on February 17, 2023, a company that (i) has already completed overseas listing or (ii) has already obtained the approval
for the offering or listing from overseas securities regulators or exchanges but has not completed such offering or listing before effective
date of the new rules and completes such offering or listing before September 30, 2023 will be considered as an existing listed company
and is not required to make any filing until it conducts a new offering in the future. Furthermore, upon the occurrence of any of the
material events specified below after an issuer has completed its offering and listed its securities on an overseas stock exchange, the
issuer shall submit a report thereof to the CSRC within 3 working days after the occurrence and public disclosure of the event: (i) change
of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other competent authorities; (iii)
change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting.&#160; Any actions by the Chinese government
to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could
significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our
securities to significantly decline or be worthless.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 15, 2022, Cybersecurity Review Measures
published by Cyberspace Administration of China, National Development and Reform Commission, Ministry of Industry and Information Technology,
Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People&#8217;s Bank of China, State
Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and State Cryptography Administration
became effective, which provides that, Critical Information Infrastructure Operators (&#8220;CIIOs&#8221;) that intend to purchase internet
products and services and Online Platform Operators engaging in data processing activities that affect or may affect national security
shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published the Administration
Measures for Cyber Data Security (Draft for Public Comments), or the &#8220;Cyber Data Security Measure (Draft)&#8221;, which requires
cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with
the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and Archives Administration
of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic company that seeks
to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations, enhance legal awareness
of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system,
and take necessary measures to fulfill confidentiality and archives administration obligations. On July 7, 2022, CAC promulgated the Measures
for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply
for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important
data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1
million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has
already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas
since January 1st&#160;of the previous year; and (iv) other circumstances under which the data cross-border transfer security assessment
is required as prescribed by the CAC. As confirmed by our PRC counsel Jiangsu Taikun Law Firm, we are currently not subject to cybersecurity
review with the Cyberspace Administration of China (&#8220;CAC&#8221;) under these new measures, because we operate our online platforms
through our subsidiaries in Hong Kong which are not subject to the laws and regulations of China, and the VIE and its subsidiaries in
China provide marketing, warehouse storage and technical maintenance services and they are not cyberspace operators with personal information
of more than 1 million users or activities that affect or may affect national security. Nevertheless, the aforementioned measures and
any related implementation rules to be enacted may subject us to additional compliance requirement in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We cannot rule&#160;out the possibility that the
PRC government will institute a licensing regime or pre-approval requirement covering our business operations in China at some point in
the future. If such a licensing regime or approval requirement were introduced, we cannot assure you that we would be able to obtain any
newly required license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability
to continue our operations in China.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From time to time, we may have to resort to administrative
and court proceedings to enforce our legal rights. Since PRC administrative and court authorities have significant discretion in interpreting
and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings
and the level of legal protection we enjoy in the PRC legal system than in more developed legal systems. Furthermore, the PRC legal system
is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have
retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation.
Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property) and
procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect
our business and impede our ability to continue our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Chinese government exerts substantial
influence over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could
result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer our
securities to investors and, and cause the value of our securities to significantly decline or be worthless.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Chinese government has exercised and continues
to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability
to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations,
land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations
or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance
with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support
recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic
policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest
ourselves of any interest we then hold in Chinese properties.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As such, our business in China is subject to various
government and regulatory interferences. We could be subject to regulation by various political and regulatory entities, including various
local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and
newly adopted laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or indirectly,
by existing or future laws and regulations relating to its business or industry, which could result in a material change in our operation
and the value of our securities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Furthermore, according to the newly published
New Overseas Listing Rules, although we are currently not required to obtain permission from any of the PRC federal or local government
and has not received any denial to list on the U.S. exchange, we are required to file with CSRC for future offerings. It is uncertain
when and whether we will be required to obtain permission from the PRC government to list and trade on U.S. exchanges in the future, and
even when such permission is obtained, whether it will be denied or rescinded, which could significantly limit or completely hinder our
ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or be
worthless.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Holding Foreign Companies Accountable
Act, or the HFCA Act, and the related regulations are evolving quickly. Further implementations and interpretations of or amendments to
the HFCA Act or the related regulations, or a PCOAB&#8217;s determination of its lack of sufficient access to inspect our auditor, might
pose regulatory risks to and impose restrictions on us because of our operations in mainland China. A potential consequence is that our
ordinary shares may be delisted by the exchange. The delisting of our ordinary shares, or the threat of our ordinary shares being delisted,
may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct full inspections
of our auditor deprives our investors of the benefits of such inspections.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Holding Foreign Companies Accountable Act,
or the HFCA Act, was enacted on December&#160;18, 2020. In accordance with the HFCA Act, trading in securities of any registrant on a
national securities exchange or in the over-the-counter&#160;trading market in the United States may be prohibited if the PCAOB determines
that it cannot inspect or fully investigate the registrant&#8217;s auditor for three consecutive years beginning in 2021, and, as a result,
an exchange may determine to delist the securities of such registrant. On June 22, 2021, the U.S. Senate passed the Accelerating Holding
Foreign Companies Accountable Act, which, would amend the HFCA Act and require the SEC to prohibit an issuer&#8217;s securities from trading
on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing
the time period before our securities may be prohibited from trading or delisted if our auditor is unable to meet the PCAOB inspection
requirement.&#160;On December 29, 2022, a legislation entitled &#8220;Consolidated Appropriations Act, 2023&#8221; (the &#8220;Consolidated
Appropriations Act&#8221;), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things,
an identical provision to Accelerating Holding Foreign Companies Accountable Act, which reduces the number of consecutive non-inspection
years required for triggering the prohibitions under the&#160;HFCA Act&#160;from three years to two.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 5, 2021, the SEC adopted the PCAOB
rule to implement HFCA Act, which provides a framework for the PCAOB to determine 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.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 2, 2021, SEC adopted amendments to
finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants the SEC identifies
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 that the PCAOB is unable to inspect or investigate (the &#8220;Commission-Identified Issuers&#8221;). A Commission-Identified Issuer
will be required to comply with the submission and disclosure requirements in the annual report for each year in which it was identified.
If a registrant is identified as a Commission-Identified Issuer based on its annual report for the fiscal year ended December 31, 2021,
the registrant will be required to comply with the submission or disclosure requirements in its annual report filing covering the fiscal
year ended December 31, 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 16, 2021, the PCAOB issued its determinations
(the &#8220;Determination&#8221;) that they are unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered
in mainland China and in Hong Kong. The Determination includes lists of public accounting firms headquartered in mainland China and Hong
Kong that the PCAOB is unable to inspect or investigate completely.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 26, 2022, the PCAOB signed a Statement
of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People&#8217;s Republic of China governing
inspections and investigations of audit firms based in China and Hong Kong.&#160; 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. However, should PRC authorities obstruct or otherwise fail
to facilitate the PCAOB&#8217;s access in the future, the PCAOB Board will consider the need to issue a new determination.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The enactment of the HFCA Act and related regulations
and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information
could cause investors uncertainty for affected issuers and the market price of our ordinary shares could be adversely affected, and we
could be delisted if our auditor is unable to meet the PCAOB inspection requirement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The lack of access to PCAOB inspections prevents
the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China and Hong Kong. As a result, investors
may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China and
Hong Kong makes it more difficult to evaluate the effectiveness of these accounting firm&#8217;s audit procedures and quality control
procedures as compared to auditors outside of China that are subject to the PCAOB inspections.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our auditor, Wei, Wei &amp; Co., LLP, an independent
registered public accounting firm that is headquartered in the United States, as an auditor of companies that are traded publicly in the
United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts inspections
to assess its compliance with the applicable professional standards. Our auditor has been inspected by the PCAOB on a regular basis with
the last inspection in 2020 and it is not included in the PCAOB Determinations. However, we cannot assure you whether Nasdaq or regulatory
authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor&#8217;s audit
procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience
as it relates to our audit. If it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because
of a position taken by an authority in a foreign jurisdiction or any other reasons, the lack of inspection could cause the trading in
our securities to be prohibited under the Holding Foreign Companies Accountable Act, and as a result Nasdaq may delist our securities.
If our securities are unable to be listed on another securities exchange, such a delisting would substantially impair your ability to
sell or purchase our securities when you wish to do so, and the risk and uncertainty associated with a potential delisting would have
a negative impact on the price of our ordinary shares. Further, new laws and regulations or changes in laws and regulations in both the
United States and China could affect our ability to list our ordinary shares on Nasdaq, which could materially impair the market for and
market price for our securities.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Regulatory bodies of the United States may
be limited in their ability to conduct investigations or inspections of our operations in China.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From time to time, the Company may receive requests
from certain U.S. agencies to investigate or inspect the Company&#8217;s operations, or to otherwise provide information. While the Company
will be compliant with these requests from these regulators, there is no guarantee that such requests will be honored by those entities
who provide products or services to us or with whom we associate, especially those entities located in China. Although the authorities
in China may establish a regulatory cooperation mechanism with its counterparts of another country or region to monitor and oversee cross-border
securities activities, such regulatory cooperation with the securities regulatory authorities in the United States may not be efficient
in the absence of a practical cooperation mechanism. Besides, according to Article 177 of the PRC Securities Law, or &#8220;Article 177,&#8221;
which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection
activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide
documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory
authority of the State Council and the competent departments of the State Council. While detailed interpretation of or implementing rules
under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or
evidence collection activities within China may further increase difficulties faced by you in protecting your interests. Furthermore,
an on-site inspection of our facilities by any of these regulators may be limited or entirely prohibited. Such inspections, though permitted
by the Company and its affiliates, are subject to the unpredictability of the Chinese enforcers, and may therefore be impossible to facilitate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b><i>Substantial
uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law</i></b></span><b><i> and how
it may impact the viability of our current corporate structure, corporate governance and business operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 15, 2019, the National People&#8217;s
Congress, or the NPC, approved the Foreign Investment Law, which took effect on January 1, 2020 and replaced the trio of existing laws
regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint
Venture Enterprise Law and the Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations.
The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with
prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic
investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. For
instance, under the Foreign Investment Law, &#8220;foreign investment&#8221; refers to the investment activities directly or indirectly
conducted by foreign individuals, enterprises or other entities in China. Though it does not explicitly classify contractual arrangements
as a form of foreign investment, there is no assurance that foreign investment through contractual arrangements would not be interpreted
as a type of indirect foreign investment activity under the definition in the future. In addition, the definition contains a catch-all
provision which includes investments made by foreign investors through means stipulated in laws or administrative regulations or other
methods prescribed by the State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions promulgated
by the State Council to provide for contractual arrangements as a form of foreign investment. In any of these cases, it will be uncertain
whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment under
the PRC laws and regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, the Foreign Investment Law grants
national treatment to foreign invested entities, except for those foreign invested entities that operate in industries deemed to be either
&#8220;restricted&#8221; or &#8220;prohibited&#8221; pursuant to the &#8220;Negative List&#8221; released by or upon approval by the State
Council. Foreign investors are prohibited from making any investments in the industries which are listed as &#8220;prohibited&#8221; in
the Negative List; and, after satisfying certain additional requirements and conditions as set forth in the &#8220;Negative List&#8221;
(for instance, Chinese shareholders are required to control or hold a certain percentage of equity interest in a foreign invested enterprise),
are allowed to make investments in industries which are listed as &#8220;restricted&#8221; in the Negative List. For any foreign investor
that fails to comply with the Negative List, the competent authorities can ban its investment activities, require such investor to take
measures to correct its non-compliance activities and impose other penalties. Though the business we conduct through the variable interest
entity is not within the category in which foreign investment is currently restricted or prohibited under the Negative List or other PRC
Laws, we expect that in the future Jiangsu Yanggu will engage in marketing survey services for online marketplaces. Marketing survey services
are within the category in which foreign investment is restricted pursuant to the Negative List.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event any of our future business and operations
carried out through the VIE are treated as a foreign investment and are classified in the &#8220;restricted&#8221; or &#8220;prohibited&#8221;
industry in the &#8220;Negative List&#8221; under the Foreign Investment Law, and such contractual arrangements are deemed as invalid
and illegal, we may have to unwind such contractual arrangements and/or dispose of such business, which could materially and adversely
affect our business and impede our ability to continue our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Any lack of requisite approvals, licenses
or permits applicable to our business may have a material and adverse impact on our business, financial condition and results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business is subject to governmental supervision
and regulation by the relevant&#160;PRC&#160;governmental authorities. Together, these government authorities promulgate and enforce regulations
that cover many aspects of the collectibles and artwork trading and related services exchange platform. As a result, in certain circumstances
it may be difficult to determine what actions or omissions may be deemed to be in violation of applicable laws and regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have obtained all of the applicable licenses
and permits for our current business in China. We cannot assure you that we will be able to obtain any new permits or licenses required
for conducting our business in&#160;China&#160;or will be able to maintain our existing licenses. If the&#160;PRC&#160;government determines
that we are operating without the proper approvals, licenses or permits or promulgates new laws and regulations that require additional
approvals or licenses or imposes additional restrictions on the operation of any part of our business, it has the power, among other things,
to levy fines, confiscate our income, revoke our business licenses, and require us to discontinue the relevant parts of our business or
to impose restrictions on the affected portion of our business. Any of these actions by the&#160;PRC&#160;government may have a material
adverse effect on our business and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If any company incorporated in Hong Kong
operating online collectibles and/or artwork trading platform is subject to PRC current or future laws and regulations regarding collectible
or artwork trading business, our operation may be materially adversely affected due to the uncertainty whether we would be able to obtain
approval from the provincial government and complete the filing with &#8220;Inter-Ministerial Joint Meetings of Clean-up and Corrective
Actions of Various Trading Platforms&#8221; (the &#8220;Joint Meeting&#8221;) led by the China Securities Regulatory Commission (the &#8220;CSRC&#8221;).</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to &#8220;Decision Of The State Council
On Cleaning Up And Rectifying Various Trading Platforms And Taking Effective Precautions Against Financial Risks&#8221; (&#8220;Decision
No.38&#8221;) promulgated by the State Council of the PRC on November 11, 2011 and effective on the same day, and &#8220;Opinions Of The
General Office Of The State Council On The Implementation Of The Clean-Up And Rectification Of Various Trading Platforms&#8221; (&#8220;Opinion
No.37&#8221;) promulgated by the General Office of the State Council of the PRC on July 12, 2012 and effective on the same day, any trading
places and their branches that violate any of the following provisions shall be cleaned up and rectified. Such parties must not:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-size: 10pt">(1)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Divide any equity into equal shares for public offering. An &#8220;equal share public offering&#8221; is when a trading place uses its services and facilities to divide its equity into equal shares and sell them to investors. The relevant provisions of the company law and the securities law shall apply to the public issuance of shares by a joint stock company.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-size: 10pt">(2)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Adopt centralized trading. The &#8220;centralized trading methods&#8221; referred to in this opinion include collective bidding, continuous bidding, electronic matching, anonymous trading, market makers and other trading methods, except for agreement transfers and legal auctions.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-size: 10pt">(3)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Continuously list and trade the rights and interests in accordance with standardized trading units. The &#8220;standardized trading unit&#8221; referred to in this opinion refers to the minimum trading unit set for other equities other than equity, and trading at the minimum trading unit or integer multiples thereof. &#8220;Continuous listing transaction&#8221; refers to listing and selling the same trading variety within 5 trading days after buying or listing, and buying the same trading variety within 5 trading days after selling.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-size: 10pt">(4)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Have a cumulative number of equity holders exceeding 200. Except as otherwise provided for by laws and administrative regulations, the cumulative number of actual holders of any equity shall not exceed 200 during the term of the company&#8217;s existence, no matter in the course of issuance or transfer.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-size: 10pt">(5)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Carry out standardized contract trading by centralized trading. The &#8220;standardized contract&#8221; referred to in this opinion includes two situations: one is a unified contract established by the trading place with fixed terms other than price, which stipulates the delivery of a certain amount of the subject matter at a certain time and place in the future. The other is a contract made by the exchange that gives the buyer the right to buy or sell the agreed subject matter at a specified price at a certain time in the future.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-size: 10pt">(6)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Without the approval of the relevant financial administrative department of the state council, establish either trading places for the trading of financial products such as insurance, credit and gold, or use any existing other trading places for the trading of financial products such as insurance, credit and gold.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, according to &#8220;Notice Concerning
The Issuance Of Minutes Of The Special Session On The Clean-Up And Rectification Of Stamp And Commemorative Coins Trading Places&#8221;
promulgated by the Office of the Joint Meeting on August 2, 2017, any stamps, coins and magcards using a stock issuance-like model to
trading places mainly trading stamps by a concentrated bidding and &#8220;T+0&#8221; transaction method should cease to operate. The stamps,
coins and magcards being illegally traded must be made off-line in time. Trading places which have ceased operations shall not re-start
operating unless they obtain approval from the provincial government and complete the required filing with the Joint Meeting. Provincial
governments should re-evaluate the necessity of transactions of stamps, coins and magcards, considering the development and interests
of the economic society, as well as risks, efficiencies and costs. If it is considered as necessary to maintain transactions of stamps,
coins and magcards, the provincial government may appoint a stamp, coins and magcards exchange to organize stamps, coins and magcards
transactions by way of transfer of property through agreements. Such exchange must have obtained permission from the provincial government,
passed the examination and acceptance check of provincial government and completed filings at relevant joint meetings. In addition, such
exchange must be in strict compliance with Decision No.38 and Opinion No.37 and shall not adopt or allow concentrated bidding or other
types of centralized trading, and the interval between the purchase and sale of the same item or vice versa shall not be less than 5 trading
days.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are an international online trading platform
that provides state-of-the-art, convenient services for various types of collectibles and artwork, incorporated in Hong Kong. We provide
an on-line platform for our clients to trading coins, stamps, ancient coins, and other collectibles and artwork. According to Rules for
Trading Cultural And Art Collections (interim) (the &#8220;Trading Rules&#8221;) of International Exchange, we do not provide an &#8220;equal
share public offering&#8221;, which means dividing a trading subject into several shares, but only allow a physical subject to be traded
as a whole. After trading, the original owner and the successful bidder can pick up the goods from the relevant storage company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently, we use a &#8220;T+0&#8221; bidding
method and allow our clients to centralize trading in our platform, which was not against Hong Kong current related laws and regulations
regarding artwork trading. And, as a Hong Kong online collectible and artwork trading platform, we believe those laws and regulations
regulating collectible and artwork trading in mainland China, such as Decision No.38 and Opinion No.37, do not apply to our trading platforms.
However, there may be substantial uncertainties regarding the interpretation and application of future PRC laws and regulations applicable
to our business and that the PRC government or any other governmental authorities may in future impose license requirements or take further
actions having material adverse effects on our business or finance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;<b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may rely on dividends and other distributions
on equity paid by our PRC subsidiary and the subsidiaries of the VIE to fund any cash and financing requirements we may have, and any
limitation on the ability of our PRC subsidiary or the VIE and the subsidiaries of the VIE to make payments to us could have a material
adverse effect on our ability to conduct our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a holding company, and will rely on dividends
and other distributions on equity paid by our PRC subsidiary and Hong Kong subsidiaries for our cash and financing requirements, including
the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If our subsidiaries,
the VIE or its subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability
to pay dividends or make other distributions to us. In addition, the PRC tax authorities may require Jiangsu Yanggu to adjust its taxable
income under the contractual arrangements it currently has in place with the consolidated variable interest entity in a manner that would
materially and adversely affect its ability to pay dividends and other distributions to us. See &#8220;&#8212;<i>Risks Related to Our
Corporate Structure&#8212;Contractual arrangements in relation to the consolidated VIE and its subsidiaries </i>&#160;<i>may be subject
to scrutiny by the PRC tax authorities and they may determine that we or our PRC consolidated VIE and its subsidiaries owe additional
taxes, which could negatively affect our financial condition and the value of your investment</i>.&#8221;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under PRC laws and regulations, our PRC subsidiary,
as a wholly foreign-owned enterprise in China, may pay dividends only out of its respective accumulated after-tax profits as determined
in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise is required to set aside at
least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory reserve funds, until the aggregate amount
of such funds reaches 50% of its registered capital. At its discretion, a wholly foreign-owned enterprise may allocate a portion of its
after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus
funds are not distributable as cash dividends.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Any limitation on the ability of our PRC subsidiary
to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. See also &#8220;<i>Risks Related
to Doing Business in China</i> &#8212;<i>If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification
could result in unfavorable tax consequences to us and our non-PRC shareholders</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a holding company and currently we conduct
our business operations within the PRC through the VIE and its subsidiaries. If our board and management decide to keep the profits of
the subsidiaries of the VIE for their business development and expansion instead of making dividends to the VIE, the VIE might not be
able to pay its service fees to the WFOE pursuant to the Technical Consultation and Service Agreement, and our WFOE will not be able to
make dividend distribution to the Company.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>PRC regulation of loans to and direct investment
in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans
to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability
to fund and expand our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under PRC laws and regulations, we are permitted
to utilize the proceeds from financings to fund our PRC subsidiary by making loans to or additional capital contributions to our PRC subsidiary,
subject to applicable government registration and approval requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Any loans to our PRC subsidiary, which are treated
as foreign-invested enterprises under PRC laws, are subject to PRC regulations and foreign exchange loan registrations. For example, loans
by us to our PRC subsidiary to finance its activities cannot exceed statutory limits and must be registered with the local counterpart
of the State Administration of Foreign Exchange, or SAFE. The statutory limit for the total amount of foreign debts of a foreign-invested
company is the difference between the amount of total investment as approved by MOFCOM or its local counterpart and the amount of registered
capital of such foreign-invested company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may also decide to finance our PRC subsidiary
by means of capital contributions. These capital contributions must be approved by MOFCOM or its local counterpart. In addition, SAFE
issued a circular in September 2008, SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency
registered capital into RMB by restricting how the converted RMB may be used. SAFE Circular 142 provides that the RMB capital converted
from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved
by the applicable government authority and unless otherwise provided by law, may not be used for equity investments within the PRC. Although
on July&#160;4, 2014, the SAFE issued the Circular of the SAFE on Relevant Issues Concerning the Pilot Reform in Certain Areas of the
Administrative Method of the Conversion of Foreign Exchange Funds by Foreign-invested Enterprises, or SAFE Circular 36, which launched
a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises in certain designated
areas from August&#160;4, 2014 and some of the restrictions under SAFE Circular 142 will not apply to the settlement of the foreign exchange
capitals of the foreign-invested enterprises established within the designate areas and such enterprises mainly engaging in investment
are allowed to use its RMB capital converted from foreign exchange capitals to make equity investments, our PRC subsidiary is not established
within the designated areas. On March 30, 2015, SAFE promulgated Circular 19, to expand the reform nationwide. Circular 19 came into force
and replaced both Circular 142 and Circular 36 on June 1, 2015. Circular 19 allows foreign-invested enterprises to make equity investments
by using RMB funds converted from foreign exchange capital. However, Circular 19 continues to prohibit foreign-invested enterprises from,
among other things, using RMB funds converted from its foreign exchange capitals for expenditure beyond its business scope, providing
entrusted loans or repaying loans between non-financial enterprises. In addition, SAFE strengthened its oversight of the flow and use
of the RMB capital converted from foreign currency registered capital of a foreign-invested company. The use of such RMB capital may not
be altered without SAFE&#8217;s approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such
loans have not been used. Violations of these Circulars could result in severe monetary or other penalties. These circulars may significantly
limit our ability to use RMB converted from securities offerings to fund the establishment of new entities in China by our PRC subsidiary,
to invest in or acquire any other PRC companies through our PRC subsidiary, or to establish new variable interest entities in the PRC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In light of the various requirements imposed by
PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be
able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with
respect to future loans to our PRC subsidiary or future capital contributions by us to our PRC subsidiary. If we fail to complete such
registrations or obtain such approvals, our ability to use our overseas&#8217; financing to capitalize or otherwise fund our PRC operations
may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Fluctuations in exchange rates could have
a material adverse effect on our results of operations and the value of your investment.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our reporting currency is the U.S. dollar while
the functional currency for our PRC subsidiary and the consolidated VIE and its subsidiaries is RMB. As a result, fluctuations in the
exchange rate between the U.S. dollar and RMB will affect the relative purchasing power in RMB terms of our U.S. dollar assets. Gains
and losses from the remeasurement of assets and liabilities that are receivable or payable in RMB are included in our consolidated statements
of income and comprehensive income. The remeasurement has caused the U.S. dollar value of our results of operations to vary with exchange
rate fluctuations, and the U.S. dollar value of our results of operations will continue to vary with exchange rate fluctuations. A fluctuation
in the value of RMB relative to the U.S. dollar could reduce our profits from operations and the translated value of our net assets when
reported in U.S. dollars in our financial statements. This could have a negative impact on our business, financial condition or results
of operations as reported in U.S. dollars. If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends
on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on
the U.S. dollar amount available to us. In addition, fluctuations in currencies relative to the periods in which the earnings are generated
may make it more difficult to perform period-to-period comparisons of our reported results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There remains significant international pressure
on the PRC government to adopt a flexible currency policy. Any significant appreciation or depreciation of the RMB may materially and
adversely affect our revenues, earnings and financial position, and the value of, and any dividends payable on, our ordinary shares in
U.S. dollars. For example, to the extent that we need to convert U.S. dollars we receive from an offering into RMB to pay our operating
expenses, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion.
Conversely, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings,
which in turn could adversely affect the market price of our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Very limited hedging options are available in
China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to
reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability
and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency
exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency. As
a result, fluctuations in exchange rates may have a material adverse effect on your investment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Governmental control of currency conversion
may limit our ability to utilize our net revenues effectively and affect the value of your investment.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PRC government imposes controls on the convertibility
of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive a substantial part of our
net revenues in RMB. Under our current corporate structure, our company in the Cayman Islands will rely on dividend payments from our
PRC subsidiary and Hong Kong subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange
regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions,
can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, our PRC
subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance
of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment
registrations by the beneficial owners of our Company who are PRC residents. But approval from or registration with appropriate government
authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the
repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign
currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies
to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Failure to make adequate contributions to
various employee benefit plans as required by PRC regulations may subject us to penalties.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are required under PRC laws and regulations
to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented
payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances,
of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different
levels of economic development in different locations. As of the date of this report, we believe that we have made adequate employee benefit
payments. If we fail to make adequate payments in the future, we may be required to make up the contributions for these plans in the amount
of 110% of the amount in the preceding month. If we fail to make or supplement contributions of social security premiums within the stipulated
period, the social security premiums collection agency may request information of the deposit accounts of the employer with banks and
other financial institutions. In an extreme situation, where we failed to contribute social security premiums in full amount and do not
provide guarantee, the social security premiums collection agency may apply to a Chinese court for seizure, foreclosure or auction of
our properties of value equivalent to the amount of social security premiums payable, and the proceeds from auction shall be used for
contribution of social security premiums. &#160;If we are subject to deposit, seizure, foreclosure or auction in relation to the underpaid
employee benefits, our financial condition and results of operations may be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business is susceptible to fluctuations
in the art and collectibles markets of China and Hong Kong.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conduct our business primarily in China. Our
business depends substantially on the conditions of the PRC and Hong Kong art and collectibles markets. Demand for collectibles and artwork
in China has grown rapidly in the recent decade but such growth is often coupled with volatility in market conditions and fluctuation
in prices. Fluctuations of supply and demand in China&#8217;s art market are caused by economic, social, political and other factors,
such as the outbreak of COVID-19 and government&#8217;s action to contain the spread of the pandemic as well as its impact on the overall
Chinese economy, interest rates, discretionary consumer spending and investment desires in art and collectibles. Over the years, governments
at both national and local levels have announced and implemented various policies and measures aimed to regulate the art and collectible
markets. These measures have affected and may continue to affect the conditions of China&#8217;s art and collectible markets and cause
fluctuations in collectibles and artwork prices. To the extent fluctuations in the art market may adversely affect the trading volume
on our platforms, or require us to provide our services on unfavorable terms, our financial condition and results of operations may be
materially and adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business is susceptible to fluctuations
of the commodities trade on our market.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Starting in 2019, we have listed certain commodities
such as teas, Yun Nan Ham and Chinese mitten crabs on our platform. Customer trading activities are to some extent influenced by the changes
in these commodity prices in international and domestic markets. As a result, our future operating results may be subject to the fluctuations
of these products due to the risks related to natural disasters such as drought, flood, snowstorms or other abnormal temperature changes,
extreme weather and health epidemics or pandemics, which are unpredictable and beyond our control. Any pandemic outbreak such as COVID-19
and the government&#8217;s action to contain the spread of the pandemic could materially negatively impact our ability of listing, trading
and delivery of such products. We currently have teas and Chinese mitten crabs on our platform. The prices and trading for teas and Chinese
mitten crabs could also be affected by the outbreak of diseases to tea trees and crabs which could significantly decrease the quantity
and quality of these products for trading on our platform. The general trading activities of these commodities are also directly affected
by factors such as economic and political conditions, macro trends in business and finance, investors&#8217; interest level in these commodity
trading and legislative and regulatory changes. Any one or more of these factors, or other factors, may reduce the trading activity level
of these commodities on our platform and adversely affect our business and results of operations and cash flows.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The legal rights we hold to use certain
leased&#160;properties could be challenged by property owners or other third parties, which could prevent us from operating our business
or increase the costs associated with our business operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For all of our business facilities and warehouses
that we are currently using, we do not hold property ownership with respect to the premises under which those facilities are operated.
Instead, we rely on&#160;leases with the property owners. Our general practice requires us to examine the title certificates of the property
owners as part of our due diligence before entering into a&#160;lease&#160;with them. If we fail to identify encumbrances on the title,
our&#160;leases&#160;of such properties may be challenged or even invalidated by government authority or relevant dispute resolution institutions.
As a result, the development or operations of our facilities on such properties could be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, we are subject to the risks of other
potential disputes with property owners and to the forced closure of our facilities. Such disputes and forced closures, whether resolved
in the favor of us, may divert our management&#8217;s attention, harm our reputation, or otherwise disrupt and adversely affect our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The filing with the China Securities Regulatory
Commission (&#8220;CSRC&#8221;) may be required in connection with any offerings and certain events of the Company under New Overseas
Listing Rules, and we cannot assure you that we will be able to timely make such filing, in which case we may face sanctions by the CSRC
or other PRC regulatory agencies for failure to timely file with the CSRC.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 17, 2023, the CSRC released the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the &#8220;New Overseas Listing Rules&#8221;)
with five interpretive guidelines, which will take effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises
to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an
issuer making an application for initial public offering and listing in an overseas market; b) an issuer making a subsequent overseas
securities offering after having been listed on an overseas market; c) a domestic company seeking an overseas direct or indirect listing
of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. According to the Notice on Arrangements
for Overseas Securities Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has
already completed overseas listing or (ii) has already obtained the approval for the offering or listing from overseas securities regulators
or exchanges but has not completed such offering or listing before effective date of the new rules and also completes the offering or
listing before September 30, 2023 will be considered as an existing listed company and is not required to make any filing until it conducts
a new offering in the future. Furthermore, upon the occurrence of any material events specified below after an issuer has completed its
offering and listed its securities on an overseas stock exchange, the issuer shall submit a report to CSRC within 3 working days after
the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities
regulatory agencies or other competent authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or
mandatory delisting.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our PRC counsel has advised us based on their
understanding of the current PRC laws, rules and regulations relating to the CSRC&#8217;s filing requirements, we may not be required
to file with CSRC for our listing and trading of our Ordinary Shares on the Nasdaq in the context of this offering, if we could complete
the initial public offering or obtain the approval from the SEC or Nasdaq before March 31, 2023. After the above New Overseas Listing
Rules become effective on March 31, 2023, the relevant filing requirement by the CSRC and other governmental authorities will be required
in connection with this offering. Given the current PRC regulatory environment, it is uncertain when and whether we and our PRC subsidiaries
will be required to obtain other permissions or approvals from the PRC government to list on U.S. exchanges in the future, and even if
and when such permissions or approvals are obtained, whether they will be denied or rescinded. If we or any of our PRC subsidiaries do
not receive or maintain such permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or
applicable laws, regulations, or interpretations change and we or our subsidiaries are required to obtain such permissions or approvals
in the future, it could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors
and cause the value of our securities to significantly decline or become worthless.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>PRC regulations relating to offshore investment
activities by PRC residents may limit our PRC subsidiary&#8217;s ability to increase its registered capital or distribute profits to us
or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">SAFE promulgated the Circular on Relevant Issues
Relating to Domestic Resident&#8217;s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular
37, in July 2014 that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment
or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities
must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic
information (including change of such PRC citizens or residents, name and operation term), increases or decreases in investment amount,
transfers or exchanges of shares, or mergers or divisions. SAFE Circular 37 was issued to replace the Notice on Relevant Issues Concerning
Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip Investments via Overseas Special Purpose Vehicles,
or SAFE Circular 75. SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning
Direct Investment in February 2015, which took effect on June 1, 2015. This notice has amended SAFE Circular 37 requiring PRC residents
or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If our shareholders who are PRC residents or entities
do not complete their registration as required, our PRC subsidiary may be prohibited from distributing its profits and proceeds from any
reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to
our PRC subsidiary. Moreover, failure to comply with the SAFE registration described above could result in liability under PRC laws for
evasion of applicable foreign exchange restrictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our major shareholders and executive officers
who directly or indirectly hold shares in our Company and are known to us as being PRC residents have completed the foreign exchange registrations
required.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">However, we may not be informed of the identities
of all of the PRC residents or entities holding direct or indirect interest in our Company, nor can we compel our beneficial owners to
comply with SAFE registration requirements. As a result, we cannot assure you that all of our shareholders or beneficial owners who are
PRC residents or entities have complied with, and will in the future make or obtain any applicable registrations or approvals required
by SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the
foreign exchange registrations of our PRC subsidiary, could subject us to fines or legal sanctions, restrict our overseas or cross-border
investment activities, limit our PRC subsidiary&#8217;s ability to make distributions or pay dividends to us or affect our ownership structure,
which could adversely affect our business and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Any failure to comply with PRC regulations
regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other
legal or administrative sanctions.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2012, SAFE promulgated the Notices
on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed
Company, replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China
for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company,
subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiary
of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained
to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our
executive officers and other employees who are PRC citizens or who have resided in the PRC for a continuous period of not less than one
year will be subject to these regulations when they are granted options or other awards. Failure to complete the SAFE registrations may
subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiary and
limit our PRC subsidiary&#8217;s ability to distribute dividends to us. We may face other regulatory uncertainties that could restrict
our ability to grant stock awards under incentive plans to our directors, executive officers and employees under PRC law. The Board of
Directors of the Company approved and adopted Oriental Culture Holding LTD 2021 Omnibus Equity Plan (the &#8220;Equity Plan&#8221;) on
November 8, 2021, which was approved at the stockholders&#8217; meeting on December 16, 2021. The total aggregate ordinary shares of the
Company authorized for issuance during the term of the Equity Plan is limited to 4,000,000 shares and none has been granted as of the
date of this report. Our executive officers, director and other employees who are PRC citizens or who have resided in the PRC for a continuous
period of not less than one year and receive stock awards from the Company will be subject to the SAFE registration requirement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we are classified as a PRC resident enterprise
for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the PRC Enterprise Income Tax Law and its
implementation rules, an enterprise established outside of the PRC with a &#8220;de facto management body&#8221; within the PRC is considered
a resident enterprise and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules
define the term &#8220;de facto management body&#8221; as the body that exercises full and substantial control over and overall management
of the business, production, personnel, accounts and properties of an enterprise. In April 2009, the State Administration of Taxation
issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the &#8220;de facto management
body&#8221; of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore
enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, the
criteria set forth in the circular may reflect the State Administration of Taxation&#8217;s general position on how the &#8220;de facto
management body&#8221; test should be applied in determining the tax resident status of all offshore enterprises. According to Circular
82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident
by virtue of having its &#8220;de facto management body&#8221; in China and will be subject to PRC enterprise income tax on its global
income only if all of the following conditions are met: (i)&#160;the primary location of the day-to-day operational management is in the
PRC; (ii)&#160;decisions relating to the enterprise&#8217;s financial and human resource matters are made or are subject to approval by
organizations or personnel in the PRC; (iii)&#160;the enterprise&#8217;s primary assets, accounting books and records, company seals,
and board and shareholder resolutions, are located or maintained in the PRC; and (iv)&#160;at least 50% of voting board members or senior
executives habitually reside in the PRC.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe none of our entities outside of China
is a PRC resident enterprise for PRC tax purposes. See &#8220;Taxation&#8212;People&#8217;s Republic of China Taxation.&#8221;
However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with
respect to the interpretation of the term &#8220;de facto management body.&#8221; As all of our executive officers are based in China,
it remains unclear how the tax residency rule will apply to our case. If the PRC tax authorities determine that we or any of our subsidiaries
outside of China is a PRC resident enterprise for PRC enterprise income tax purposes, then we or such subsidiary could be subject to PRC
tax at a rate of 25% on its world-wide income, which could materially reduce our net income. In addition, we will also be subject to PRC
enterprise income tax reporting obligations. Furthermore, if the PRC tax authorities determine that we are a PRC resident enterprise for
enterprise income tax purposes, gains realized on the sale or other disposition of our ordinary shares may be subject to PRC tax, at a
rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any
applicable tax treaty), if such gains are deemed to be from PRC sources. It is unclear whether non-PRC shareholders of our Company would
be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated
as a PRC resident enterprise. Any such tax may reduce the returns on your investment in our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Enhanced scrutiny over acquisition transactions
by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PRC tax authorities have enhanced their scrutiny
over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests in a PRC resident enterprise,
by a non-resident enterprise by promulgating and implementing SAT Circular 59 and Circular 698, which became effective in January 2008,
and Circular 7 in replacement of some of the existing rules in Circular 698, which became effective in February 2015.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under Circular 698, where a non-resident enterprise
conducts an &#8220;indirect transfer&#8221; by transferring the equity interests of a PRC &#8220;resident enterprise&#8221; indirectly
by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, may be subject
to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial
purposes. As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up to 10%. Circular 698 also provides
that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price
lower than the fair market value, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the
transaction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2015, the SAT issued Circular 7 to
replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly different
from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect transfers set forth under Circular 698 but
also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company.
In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and has introduced
safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Circular 7 also
brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable
assets.&#160;Where a non-resident enterprise conducts an &#8220;indirect transfer&#8221; by transferring the taxable assets indirectly
by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee,
or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a &#8220;substance
over form&#8221; principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable
commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such
indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer
is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We face uncertainties on the reporting and consequences
on future private equity financing transactions, share exchange or other transactions involving the transfer of shares in our Company
by investors that are&#160;non-PRC resident enterprises. The PRC tax authorities may pursue such non-resident enterprises with respect
to a filing or the transferees with respect to withholding obligations, and request our PRC subsidiaries to assist in the filing. As a
result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed,
under Circular 59 or Circular 698 and Circular 7, and may be required to expend valuable resources to comply with Circular 59, Circular
698 and Circular 7 or to establish that we and our non-resident enterprises should not be taxed under these circulars, which may have
a material adverse effect on our financial condition and results of operations.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PRC tax authorities have the discretion under
SAT Circular 59, Circular 698 and Circular 7 to make adjustments to the taxable capital gains based on the difference between the fair
value of the taxable assets transferred and the cost of investment. We plan to pursue acquisitions in the future that may involve complex
corporate structures. If we are considered a non-resident enterprise under the PRC Enterprise Income Tax Law and if the PRC tax authorities
make adjustments to the taxable income of the transactions under SAT Circular 59 or Circular 698 and Circular 7, our income tax costs
associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results
of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we cannot effectively secure our network,
customers&#8217; personal information, which we collect through our online platforms, it may be subject to leakage or theft, and if the
regulators believe we have failed to fulfill our network security obligations, our online platform may be required to suspend operations
to make rectification, which may have a material adverse effect on our operations and financial results due to the large amount of our
daily trading conducted online.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In China, regulatory authorities have implemented
and are considering a number of legislative and regulatory proposals concerning data protection. The PRC Civil Code, which is issued by
the PRC National People&#8217;s Congress on May 28, 2020 and became effective on January 1, 2021, stipulates that the personal information
of a natural person shall be protected by the law. Any organization or individual shall legally obtain the personal information of others
when necessary and ensure the safety of such personal information, and shall not illegally collect, use, process or transmit the personal
information of others, or illegally buy or sell, provide or make public the personal information of others. On November 7, 2016, the Standing
Committee of the National People&#8217;s Congress of the PRC (the &#8220;NPC&#8221;) promulgated the Cybersecurity Law of the PRC (&#8220;Cybersecurity
Law&#8221;) which became effective on June 1, 2017. Under this law, network operators must provide cybersecurity protection and protect
the integrity, confidentiality and availability of network data. The Cybersecurity Law also standardizes the collection and usage of personal
information and requires network operators to protect users&#8217; privacy security. If a network operator violates the Cybersecurity
Law, it can face various penalties, including but not limited to the suspension of related businesses, winding up, shutting down its websites,
and revocation of its business license, all of which may be imposed by the relevant authority, along with fines up to RMB 1 million (approximately
$1456,000) if severe damage occurred. The Personal Information Protection Law of the PRC was adopted on August 20, 2021 and became effective
on November 1, 2021 , stipulating that the personal information shall be processed with the consent of the individual on the premise of
full prior notification, and intensifying the punishment for illegal acts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
collect and process the personal information of the customers who register on our online platforms, for the purpose of managing and maintaining
our customers and their trading information. Nanjing Yanyu, one of the wholly-owned subsidiaries of Jiangsu Yanggu, which having a primary
business to provide technical support for International Exchange and HKDAEx&#8217;s online collectibles, art and commodities e-commerce
platforms, established network security policies, including Data Security Management Measures, Data Center Network Security Management
Rules, Information Security Management Rules and an Information Security Emergency Plan. We also publish &#8220;Investor Information Protection
Policy&#8221; on our online platforms, to help the customers who register on our online platforms understand what, where and how their
private information be collected and used by International </span><span style="font-size: 10pt">&#160;</span>&#160;<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange,
HKDAEx and its affiliates and what measures we take to protect their personal information. Nonetheless, we cannot assure that our cybersecurity
protection policies and related technical measures are adequate to prevent network data in our online platforms from being breached, stolen
or tampered with. If our online platform network is at risk, we may be required by competent cybersecurity supervision authorities to
suspend our online platforms before rectification and we may be fined up to RMB 1 million (approximately $146,000) if it is found that
our online platforms have material security risks or if severe cybersecurity events occur due to failure of our network security protection.</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;<i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Although the subsidiary of the VIE operates
and maintains the network platforms in mainland China, our main business, providing collectibles and artwork e-commerce services, is
conducted by International Exchange in Hong Kong. Therefore, our business model may be considered involving transfer of customers&#8217;
personal information across borders and we may be subject to the Measures for the Security Assessment of Data Cross-border Transfer.
We cannot guarantee that we can pass the safety assessment for cross-border transfers of personal information required by Measures for
the Security Assessment of Data Cross-border Transfer. If we fail this assessment, International Exchange may not use customers&#8217;
personal information stored in mainland China to process its trading on the online platform, which would result in a significant adverse
impact on our business operations.</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on September 1,
2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC under the
following circumstances: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure
operator or data processor who processes personal information of over 1 million people provides personal information to overseas;
(iii) any data processor who provides personal information to overseas and has already provided personal information of more than
100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st&#160;of the previous year;
and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the
CAC.</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide maintenance and warehouse services
to our online platforms for collectibles, artwork and commodities trading through the subsidiaries of the VIE in mainland China and we
don&#8217;t transfer customers data cross-border. However, if we need to transfer customers data cross-border in the future and reach
the threshold requirements Measures for the Security Assessment of Data Cross-border Transfer, we cannot assure that we will pass this
safety assessment, which may have a material adverse effect on our operations and financial results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The preferential tax treatment for Kashi
Longrui and Kashi Dongfang is only for 5 years and has expired in December 2022 and the expiration of preferential tax treatments will
materially and negatively affect our financial results.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the &#8220;Notice on Enterprise Income
Tax Preferential Policy of Xinjiang Kashi and Horgos Special Economic Development Zone&#8221; (&#8220;Circular 112&#8221;) promulgated
by the Ministry of Finance and the State Taxation Administration on November 29, 2011 and effected on the same day, the &#8220;Several
Opinions of Supporting the Construction of Xinjiang Kashi and Horgos Special Economic Development Zone&#8221; (&#8220;Circular 33&#8221;)
promulgated by the State Council on September 30, 2011 and effected on the same day, and the &#8220;Catalogue of Mainly Encouraged Developing
Industry with Preferential Enterprise Income Tax in Difficult Areas in Xinjiang&#8221;(&#8220;Circular 85&#8221;) promulgated by Ministry
of Finance, the State Administration of Taxation, National Development and Reform Commission and the Ministry of Industry and Information
Technology on July 20, 2016 and effected on January 1, 2016, from January 1, 2010 to December 31, 2020, which has been extended to December
31, 2030, enterprises fall into the scope of Circular 85 in Xinjiang Kashi and Horgos Special Economic Development Zone, shall be exempted
from enterprise income tax for five years from the tax year in which the first production and operation income is obtained.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Since Kashi Longrui Business Management Services
Co., Ltd. (&#8220;Kashi Longrui&#8221;), a subsidiary of the VIE was incorporated on July 19, 2018 in Xinjiang Kashi Special Economic
Development Zone (&#8220;Xinjiang Kashi&#8221;) and its main business is marketing promotion and consulting, and since Kashi Dongfang
Cangpin Culture Development Co., Ltd. (&#8220;Kashi Dongfang&#8221;), a subsidiary of the VIE was incorporated on August 29, 2018 in Xinjiang
Kashi and its main business is providing online and offline joint custody and storage services, these two companies are exempted from
income tax for 5 years pursuant to the regulations above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">After
the expiration of their initial 5-year period ending in December 2022</span><span style="font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif">,
Kashi Longrui and Kashi Dongfang will not be exempted from enterprise income tax and will be subject to the PRC Enterprise Income Tax
at the rate of 25% on its worldwide income, which will significantly reduce our profitability and negatively affect our financial results.&#160;</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Risks Related to Doing Business in Hong
Kong</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Hong Kong legal system embodies uncertainties
which could limit the legal protections available to you and us.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">As one of the conditions for the handover of the sovereignty of Hong
Kong to China, China had to accept some conditions such as Hong Kong&#8217;s Basic Law before its return. The Basic Law ensured Hong Kong
will retain its own currency (the Hong Kong Dollar), legal system, parliamentary system and people&#8217;s rights and freedom for fifty
years from 1997. This agreement has given Hong Kong the freedom to function in a high degree of autonomy. The Special Administrative Region
of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary and courts of last resort, immigration
and customs, public finance, currencies and extradition. Hong Kong continues using the English common law system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">However, if the PRC reneges on its agreement to
allow Hong Kong to function autonomously, this could potentially impact Hong Kong&#8217;s common law legal system and may in turn bring
about uncertainty in, for example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our
business and operation. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective
as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system,
including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local
regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce
our agreements with our customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>It will be difficult to acquire jurisdiction
and enforce liabilities against our officers, directors and assets based in Hong Kong.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain of our assets are located in Hong Kong
and our officers and our present directors reside outside of the United States. As a result, it may not be possible for United States
investors to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of United
States courts predicated upon civil liabilities and criminal penalties of our directors and officers under Federal securities laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may have difficulty establishing adequate
management, legal and financial controls in Hong Kong, which could impair our planning processes and make it difficult to provide accurate
reports of our operating results.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Although we will be required to implement internal
controls, we may have difficulty in hiring and retaining a sufficient number of qualified employees to work in Hong Kong in these areas.
As a result of these factors, we may experience difficulty in establishing the required controls, making it difficult for management to
forecast its needs and to present the results of our operations accurately at all times. If we are unable to establish the required controls,
market makers may be reluctant to make a market in our stock and investors may be reluctant to purchase our stock, which would make it
difficult for you to sell any shares that you may own or acquire.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business may be affected by the Personal
Data (Privacy) Ordinance of Hong Kong.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Members of our leading online platforms in Hong
Kong, including China International Assets and Equity of Artworks Exchange Limited, would need to provide personal information during
registration and our online platforms may monitor the online behavior of the members so as to gather data for market trend analysis and
upgrade our website. As such, our business in Hong Kong is subject to Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong
Kong) (&#8220;PDPO&#8221;), which aims to protect the privacy of individuals personal data. The PDPO imposes a statutory duty on data
users to comply with the requirements of the six data protection principles (the &#8220;Data Protection Principles&#8221;) contained in
Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection
Principle unless the act or practice, as the case may be, is required or permitted under the PDPO. If we violate the PDPO, we may be subject
to fines and/or other penalties and may incur legal costs and experience negative media coverage, which could adversely affect our business,
results of operations and reputation.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Ordinary Shares </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our ordinary shares may be thinly traded
and you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate
your shares.</i></b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our ordinary shares may be &#8220;thinly-traded&#8221;,
meaning that the number of persons interested in purchasing our ordinary shares at or near bid prices at any given time may be relatively
small or non-existent. This situation may be attributable to a number of factors, including the fact that we are relatively unknown to
stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume,
and that even if we came to the attention of such persons, they tend to be risk-averse and might be reluctant to follow an unproven company
such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned.&#160;&#160;As a consequence,
there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned
issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect
on share price.&#160;A broad or active public trading market for our ordinary shares may not develop or be sustained.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The market price for our ordinary shares
may be volatile.</i></b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The market price for our ordinary shares may be
volatile and subject to wide fluctuations due to factors such as:&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the perception of U.S. investors and regulators of U.S. listed Chinese companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">actual or anticipated fluctuations in our operating results;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">general economic or political conditions in China and Hong Kong; and</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">health epidemics or pandemics, such as the outbreak of COVID-19 and government&#8217;s action to contain the spread of the pandemic.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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.&#160;These
market fluctuations may also materially and adversely affect the market price of our ordinary shares.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Volatility in our ordinary shares price
may subject us to securities litigation.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The market for our ordinary shares may have, when
compared to seasoned issuers, significant price volatility and we expect that our share price may continue to be more volatile than that
of a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against
a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation.
Securities litigation could result in substantial costs and liabilities and could divert management&#8217;s attention and resources.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>In order to raise sufficient funds to enhance
operations, we may have to issue additional securities at prices which may result in substantial dilution to our shareholders.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we raise additional funds through the sale
of equity or convertible debt, our current shareholders&#8217; percentage ownership will be reduced. In addition, these transactions may
dilute the value of ordinary shares outstanding. We may have to issue securities that may have rights, preferences and privileges senior
to our ordinary shares. We cannot provide assurance that we will be able to raise additional funds on terms acceptable to us, if at all.
If future financing is not available or is not available on acceptable terms, we may not be able to fund our future needs, which would
have a material adverse effect on our business plans, prospects, results of operations and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are not likely to pay cash dividends
in the foreseeable future.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We currently intend to retain any future earnings
for use in our operations and expansion of our business. Accordingly, we do not expect to pay any cash dividends in the foreseeable future,
but will review this policy as circumstances dictate. Should we determine to pay dividends in the future, our ability to do so will depend
upon the receipt of dividends or other payments from the WFOE. The WFOE may, from time to time, be subject to restrictions on its ability
to make distributions to us, including restrictions on the conversion of RMB into U.S. dollars or other hard currency and other regulatory
restrictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our board of directors has complete discretion
as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary
resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under Cayman Islands law,
a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend
be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if
our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on,
among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions,
if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our
board of directors. Accordingly, the return on your investment in our ordinary shares will likely depend entirely upon any future price
appreciation of our ordinary shares. There is no guarantee that our ordinary shares will appreciate in value or even maintain the price
at which you purchased the ordinary shares. You may not realize a return on your investment in our ordinary shares and you may even lose
your entire investment in our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>You may face difficulties in protecting
your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the United
States and it may be difficult for a shareholder of ours to effect service of process or to enforce judgements obtained in the United
States courts. </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our corporate affairs are governed by our current
memorandum and articles of association and by the Companies Act (As Revised) and common law of the Cayman Islands. The rights of shareholders
to take legal action against our directors and us, actions by minority shareholders and the fiduciary responsibilities 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 English common law. Decisions of
the Privy Council (which is the final court of appeal for British overseas territories such as the Cayman Islands) are binding on a court
in the Cayman Islands. Decisions of the English courts, and particularly the Supreme Court of the United Kingdom and the Court of Appeal
are generally of persuasive authority but are not binding on the courts of the Cayman Islands. The rights of our shareholders and the
fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or
judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws as compared to
the United States, and provide significantly less protection to investors. In addition, Cayman Islands companies may not have standing
to initiate a shareholder derivative action before the United States federal courts. The Cayman Islands courts are also unlikely to impose
liabilities against us in original actions brought in the Cayman Islands, based on certain civil liability provisions of United States
securities laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently, all of our operations are conducted
outside the United States, and substantially all of our assets are located outside the United States. All of our directors and officers
are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets 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.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of all of the above, our shareholders
may have more difficulty 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.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Our ordinary shares
may be delisted from the NASDAQ Stock Market (&#8220;NASDAQ&#8221;).</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 9, 2022, the Company received a letter
from the Nasdaq Stock Market (&#8220;Nasdaq&#8221;) notifying the Company that, because the closing&#160;bid price&#160;for the Company&#8217;s
ordinary shares listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer meets the minimum bid price&#160;requirement
for continued listing on Nasdaq under Nasdaq Marketplace Rule 5550(a)(2), which requires a minimum&#160;bid price&#160;of $1.00 per share
(the &#8220;Minimum&#160;Bid Price&#160;Requirement&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The notification has no immediate effect on the
listing of the Company&#8217;s ordinary shares. In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has a period of
180 calendar days from the date of notification, until May 8, 2023 (the &#8220;Compliance Period&#8221;), to regain compliance with the
Minimum&#160;Bid Price&#160;Requirement. If at any time before the expiration of the Compliance Period the&#160;bid price&#160;of the
Company&#8217;s ordinary shares closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide
written notification that the Company has achieved compliance with the Minimum&#160;Bid Price&#160;Requirement. If the Company does not
regain compliance by the end of the Compliance Period, the Company may be eligible for an additional 180 calendar day period to regain
compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares
and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need
to provide written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split,
if necessary. However, if it appears to Nasdaq that the Company will not be able to cure the deficiency, or if the Company is otherwise
not eligible, Nasdaq will provide notice that the Company&#8217;s securities will be subject to delisting.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are a foreign private issuer within the
meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public
companies.</i></b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a foreign private issuer within the meaning
of the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to United States domestic public companies.
For example:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any &#8220;short-swing&#8221; trading transaction.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are required to file an annual report on Form
20-F within four months of the end of each fiscal year. Press releases relating to financial results and material events will also be
furnished to the SEC on Form 6-K.&#160;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, you may not be afforded the
same protections or information that would be made available to you were you investing in a U.S. domestic issuer.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Because we are a foreign private issuer
and are exempt from certain NASDAQ corporate governance standards applicable to U.S. issuers, you may have less protection than you would
have if we were a domestic issuer.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Nasdaq Listing Rules require listed companies
to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to
follow home country practice in lieu of the above requirements. On March 1, 2023, the Company has notified Nasdaq that it will follow
its home country practice in lieu of the provisions under Rule 5620(a), Rule 5635(a)(1), Rule 5635(b), Rule 5635(c) and Rule 5635(d) of
the NASDAQ Stock Market Marketplace Rules (the &#8220;Rules&#8221;) by relying on the exemption provided for foreign private issuers under
Marketplace Rule 5615(a)(3). Rule 5620(a) requires that the Company to hold an annual meeting of shareholders no later than one year after
the end of the Company&#8217;s fiscal year-end; Rule 5635(a)(1) of the Rules requires shareholder approval for the issuance of securities in
connection with the acquisition of the stock or assets of another company; Rule 5635(b) of the Rules requires shareholder approval for
the issuance of securities when the issuance will result in a change of control of the company; Rule 5635(c) of the Rules requires shareholder
approval for share incentive plans; and Rule 5635(d) of the Rules requires shareholder approval for the issuance of securities, other
than in a public offering, equal to 20% or more of the voting power outstanding before the issuance for less than the greater of book
or market value of the stock. The corporate governance practice in our home country, the Cayman Islands, does not require the Company
to follow or comply with the requirements of Rule 5620(a), Rule 5635(a)(1), Rule 5635(b), Rule 5635(c) and Rule 5635(d). We will comply
with other corporate governance requirements of the Nasdaq Listing Rules. However, we may consider following home country practice in
lieu of additional requirements under the Nasdaq Listing Rules with respect to certain corporate governance standards in the future which
may afford less protection to investors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are an &#8220;emerging growth company&#8221;
within the meaning of the Securities Act, and  we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies, this could make it more difficult to compare our performance with other public companies</i>. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are an &#8220;emerging growth company&#8221;
within the meaning of the Securities Act, as modified by the JOBS Act. Section&#160;102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that
have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange
Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to
opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an
election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard
is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt
the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial
statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out
of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>As an &#8220;emerging growth company&#8221;
under applicable law, we will be subject to reduced disclosure requirements. Such reduced disclosure may make our ordinary shares&#160;less
attractive to investors.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For as long as we remain an &#8220;emerging growth
company&#8221;, as defined in the JOBS Act, we will elect to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not &#8220;emerging growth companies&#8221;, including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding
advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.&#160;&#160;Because
of these reduced regulatory requirements, our shareholders would be left without information or rights available to shareholders of more
mature companies. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for
our ordinary shares and our share price may be more volatile.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we are classified as a passive foreign
investment company, United States taxpayers who own our ordinary shares may have adverse United States federal income tax consequences.
</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We will be a &#8220;passive foreign investment
company,&#8221; or &#8220;PFIC,&#8221; if, in any particular taxable year, either (a)&#160;75% or more of our gross income for such year
consists of certain types of &#8220;passive&#8221; income or (b)&#160;50% or more of the average quarterly value of our assets (as determined
on the basis of fair market value) during such year produce or are held for the production of passive income (the &#8220;asset test&#8221;).
Although the law in this regard is unclear, we intend to treat the VIE (including its subsidiaries) as being owned by us for U.S. federal
income tax purposes, not only because we exercise effective control over the operation of such entity but also because we are entitled
to substantially all of its economic benefits, and, as a result, we consolidate its results of operations in our consolidated financial
statements. Assuming that we are the owner of the VIE (including its subsidiaries) for U.S. federal income tax purposes, and based upon
our current and expected income and assets, including goodwill, and the value of our ordinary shares, we do not believe that we were a
PFIC for the taxable year ended December&#160;31, 2022 and we do not expect to be a PFIC for the foreseeable future. However, there can
be no assurance that we will not be a PFIC for the current taxable year. In addition, there can be no assurance that we will not be a
PFIC for any future taxable year. PFIC status is a factual determination that must be tested each taxable year and will depend on the
composition of our assets and income in each such taxable year.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We will be classified as a PFIC for any taxable
year if either (i)&#160;at least 75% of our gross income for the taxable year is passive income or (ii)&#160;at least 50% of the value
of our assets (based on a quarterly value of the assets during the taxable year) is attributable to assets that produce or are held for
the production of passive income. In determining the average percentage value of our gross assets, the aggregate value of our assets will
generally be deemed to be equal to our market capitalization (determined by the sum of the aggregate value of our outstanding equity)
plus our liabilities. Accordingly, we could become a PFIC if our market capitalization were to decrease significantly while we hold substantial
cash, cash equivalents or other assets that produce or are held for the production of passive income. In addition, because there are uncertainties
in the application of the relevant PFIC rules, it is possible that the Internal Revenue Service, or IRS, may challenge our classification
of certain income and assets as non-passive or our valuation of our tangible and intangible assets, which could result in a determination
that we were a PFIC for the current or subsequent taxable years.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we were classified as a PFIC in any taxable
year in which a U.S. Holder (as defined in &#8220;Item 10. Additional Information&#8212;10.E. Taxation&#8212;United States Federal Income
Taxation&#8221;) holds the ordinary shares, the U.S. Holder would generally be subject to additional taxes and interest charges on certain
&#8220;excess&#8221; distributions we make and on the gain, if any, recognized on the disposition or deemed disposition of such U.S. Holder&#8217;s
ordinary shares, even if we are no longer a PFIC in the year of distribution or disposition. Moreover, such U.S. Holder would also be
subject to special U.S. tax reporting requirements. For more information on the U.S. tax consequences to U.S. Holders that would result
from our classification as a PFIC, see &#8220;<i>Item 10. Additional Information&#8212;10.E. Taxation&#8212;United States federal income
taxation&#8212;Passive foreign investment company</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our principal shareholders have, and will
have substantial influence over our Company and their interests may not be aligned with the interests of our other shareholders.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of April 27, 2023, Mun Wah Wan, chairman of
our board of directors, beneficially owns 6.6% of our outstanding ordinary shares through HKFAEx Group Limited, which is owned by The
Pride Group Holdings Limited, of which Mun Wah Wan is the sole shareholder, and each of Aimin Kong and Huajun Gao, beneficially owns
11.5% of our outstanding ordinary shares through Oriental Culture Investment Development LTD and Oriental Culture Investment Communication
LTD, respectively, and, collectively, such three individuals beneficially own approximately 30% of our total outstanding ordinary shares.
As a result of their significant shareholding, these shareholders have, and will continue to have, substantial influence over our business,
including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and
other significant corporate actions. They may take actions that are not in the best interests of us or our other shareholders. This concentration
of ownership may discourage, delay or prevent a change in control of our Company, which could deprive our shareholders of an opportunity
to receive a premium for their shares as part of a sale of our Company and might reduce the market price of our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 4. INFORMATION ON THE COMPANY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. History and Development of the Company</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are an online provider of collectible and artwork
e-commerce services, which allow collectors, artists, art dealers and owners to access a much bigger art and collectable trading market
where they can engage with a wider range of collectible or artwork investors than they could likely encounter without our platforms. We
currently facilitate trading by individual and institutional customers of all kinds of collectibles, artwork and certain commodities on
our leading online platforms owned by our subsidiaries in Hong Kong, namely the China International Assets and Equity of Artworks Exchange
Limited and HKDAEx Limited. We commenced our operations in March 2018 and our customer trading volume has been growing rapidly since then.
We also provide online and offline integrated marketing, storage and technical maintenance services to our customers in China. We, Oriental
Culture Holding LTD, are a holding company with operations conducted via our subsidiaries, variable interest entity and its subsidiaries.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We were incorporated under the laws of the Cayman
Islands as an offshore holding company on November 29, 2018, and we own 100% of the equity interest in Oriental Culture Development LTD
(&#8220;Oriental Culture BVI&#8221;), which was incorporated on December 6, 2018 under the laws of British Virgin Islands.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Through Oriental Culture BVI, we own 100% of the
equity interest in HK Oriental Culture Investment Development Limited (&#8220;Oriental Culture HK&#8221;), a company formed under the
laws of Hong Kong on January 3, 2019. Through Oriental Culture HK, we directly own 100% of the equity interest in Nanjing Rongke Business
Consulting Service Co., Ltd. (the &#8220;WFOE&#8221; or &#8220;Nanjing Rongke&#8221;), a wholly-owned PRC subsidiary of Oriental Culture
HK. The WFOE entered into a series of agreements with Jiangsu Yanggu Culture Development Co., Ltd. (&#8220;Jiangsu Yanggu&#8221;) and
Jiangsu Yanggu&#8217;s shareholders, through which we effectively control and derive all of the economic interest and benefits from Jiangsu
Yanggu.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 22, 2013, China International Assets
and Equity of Artworks Exchange Limited (the &#8220;International Exchange&#8221;) was incorporated under Hong Kong law. International
Exchange provides an online platform to facilitate collectible and artwork trading e-commerce and became our subsidiary as a result of
the reorganization of the common control of Oriental Culture and International Exchange.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Jiangsu Yanggu Culture Development Co., Ltd. (the
&#8220;VIE&#8221;) was incorporated on August 23, 2017, and is the holding company for all its wholly owned PRC subsidiaries. Nanjing
Yanqing Information Technology Co., Ltd., (&#8220;Nanjing Yanqing&#8221;) was incorporated on May 17, 2018&#160; and Nanjing Yanyu Information
Technology Co., Ltd. (&#8220;Nanjing Yanyu&#8221;) was incorporated on June 7, 2018 and commenced operations in July 2018. Their primary
business is to provide technical and other support for International Exchange and HKDAEx&#8217;s online collectible, art and commodities
e-commerce business, and to sell software applications and provide support services to our affiliates and third parties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Kashi Longrui Business Management Services Co.,
Ltd. (&#8220;Kashi Longrui&#8221;), a wholly-owned subsidiary of Nanjing Yanqing, was incorporated on July 19, 2018 and commenced operations
in August 2018. Its primary business is to provide online and offline marketing services for our e-commerce platform&#8217;s members and
other related services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Kashi Dongfang Cangpin Culture Development Co.,
Ltd. (&#8220;Kashi Dongfang&#8221;), a wholly-owned subsidiary of Nanjing Yanqing, was incorporated on August 29, 2018 and commenced operations
in September 2018. Its primary focus is to provide online and offline warehouse management services for our e-commerce platform&#8217;s
members.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Zhongcang Warehouse Co., Ltd. (&#8220;Zhongcang&#8221;)
was incorporated on July 19, 2018 and is a joint venture by Kashi Longrui with third parties, namely Zhonglianxin Industry Group (Hunan)
Co., Ltd., Nanjing Zhonghao Culture Media Limited, and Zhengjiang Culture Tourism International Cultural and Creative Industry Park Development
Co., Ltd. to provide warehouse services to our customers. Kashi Longrui owned 18% of Zhongcang.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 18, 2018, HKDAEx Limited (&#8220;HKDAEx&#8221;)
was incorporated under Hong Kong law. On May 9, 2019, we acquired all of the outstanding equity interests of HKDAEx from its original
shareholder-HKFAEX Group Limited (&#8220;HKFAEX&#8221;) for a consideration of 2,400,000 ordinary shares (pre forward share split) of
the Company. Effective from May 9, 2019, HKDAEx became our wholly-owned subsidiary. HKDAEx provides our customers with an online trading
platform for products and commodities other than collectible and artwork in Hong Kong.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 8, 2019, the shareholders of the Company
adopted the Second Amended and Restated Articles of Association to effect a 2 for 1 forward share split of the total authorized and issued
and outstanding shares of the Company. As a result of the 2 for 1 forward share split, the Company&#8217;s total authorized shares are
1,000,000,000 shares comprising of (i) 900,000,000 ordinary shares with a par value of $0.00005 each and (ii) 100,000,000 preferred shares
with a par value of $0.00005 each, and the Company&#8217;s issued and outstanding ordinary shares increased from 12,400,000 shares to
24,800,000 shares. In addition, all existing shareholders agreed to surrender to the Company as treasury shares, 12.5% of the then outstanding
ordinary shares (3,100,000 ordinary shares) for no consideration.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 28, 2020, all existing shareholders of
the Company agreed to surrender an additional 6,510,000 ordinary shares, or 30% of the Company&#8217;s then outstanding ordinary shares,
at no consideration to be reserved as treasury shares of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-align: justify; margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">On December 1, 2020, the Company completed its IPO of 5,065,000 ordinary
shares and 59,400 option shares at a public offering price of $4.00 per share, par value US$0.00005 per share, resulting in net proceeds
to the Company of approximately $17.3 million after deducting underwriting commission, offering costs and other expenses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March 2022, Jiangsu Yanggu signed a Capital
Increase Investment Agreement (&#8220;Agreement&#8221;) with Noble Family New Retail Co., Ltd. (&#8220;Noble Family&#8221;), Beijing Wen
Jiao Technology Co., Ltd. (&#8220;BJWJ&#8221;) and two investors to acquire shares and increase capital of Beijing Jiu Yu Ling Jing Technology
Co., Ltd. (&#8220;JYLJ&#8221;). Pursuant to the Agreement, Jiangsu Yanggu will acquire 11.875% equity interest of JYLJ through a cash
contribution of RMB 6 million (approximately $923,076) and providing certain internet development resources and technical support to JYLJ.
Noble Family and BJWJ, the existing shareholders of JYLJ and two new investors will also make contributions in cash for an aggregate of
RMB44 million (approximately $6.77 million) and certain initial work and business resources to JYJL. After this capital increase, Jiangsu
Yanggu has become the third largest shareholder of JYLJ. JYJL primarily engages in wine and alcohol product merchants and customers, as
well as product launch, brand showcase, marketing and promotion and it is currently in the process of developing a &#8220;Wine and Spirits&#8221;
metaverse, and the amount raised through increase of share capital will be mainly used for this development.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our principal executive offices are located at
Room 1402, Richmake Commercial Building, 198-200 Queen&#8217;s Road Central, Hong Kong. Our telephone number at this address is (852)
2110-3909. Our registered office in the Cayman Islands is located at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay
Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands. Investors should contact us for any inquiries through the address and telephone
number of our principal executive offices.</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The SEC maintains a web site at&#160;www.sec.gov&#160;that
contains reports and other information regarding issuers that file electronically with the SEC using its EDGAR system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See &#8220;Item 5. Operating and Financial Review
and Prospects &#8212; B. Liquidity and Capital Resources &#8212; Capital Expenditures&#8221; for a discussion of our capital expenditures.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>B. Business Overview</b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are an online provider of collectible and artwork
e-commerce services, which allow collectors, artists and art dealers and owners to access a much bigger art trading market where they
can engage with a wider range of collectibles and artwork investors than they could likely encounter without our platforms. We currently
facilitate trading by individual and institutional customers of all kinds of collectibles and artwork and certain commodities on our leading
online platforms owned by our subsidiaries in Hong Kong, namely the China International Assets and Equity of Artworks Exchange Limited
and HKDAEx Limited. We commenced our operations in March 2018 and our customer trading volume has been growing rapidly since then. We
also provide online and offline integrated marketing, storage and technical maintenance services to our customers in China.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the report of &#8220;E-commerce in
China 2021&#8221; released by Ministry of Commerce of People&#8217;s Republic of China on November 16, 2022, China&#8217;s e-commerce
continued to grow in 2021. Data of National Bureau of Statistics of China indicates that in 2021, the national e-commerce transaction
volume reached RMB 42.3 trillion (approximately $6.13 trillion, based on the central parity rate of March 15, 2023), an increase of 19.6%
year-on-year.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On many mainstream e-commerce platforms, cultural
products such as arts and crafts flourished and developed rapidly, and art and collectibles e-commerce are gradually growing. Online trading
has become a major trend of the global art and collectibles trade. As a comprehensive service provider with extensive cultural and art
collection and collectibles market operations and marketing experience, we seize current development opportunities to provide online and
offline services for the domestic and international art and collectibles trading business. We plan to build a complete art and collectibles
business e-commerce service chain to serve the industry.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide customers of our online platform with
comprehensive services, including account opening, art investment education, market information, research, real-time customer support,
and artwork and collectibles warehousing services. Most services are delivered online through our proprietary client software and call
center. Our client software provides not only market information and analysis, but also interactive functions including live discussion
boards and instant messaging with customer service representatives, which we believe enhances our customers&#8217; engagement. Internally,
we legally collect and analyze customer behavior and communications data from our client software, customer relationship management system
and the exchanges, which allow us to better understand, attract and serve our customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide industry solutions and related software
products, system development and technical support services for our e-commerce platform customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We strive to minimize conflicts of interest with
our customers, which we believe is essential for our long-term success. Under the trading rules of the two trading platforms we operate
on, we do not set, quote or influence the trading prices, and cannot access our customers&#8217; money.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Our Services </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide customers of our online platform with
comprehensive services, including&#160;the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investor Education</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that investor education is critical
in preparing potential customers for online collectibles and artwork trading. We have developed a set of educational programs designed
to target customers with a variety of experience levels and investment preferences. Our education programs include basic rules and processes
of online collectibles and artwork trading, fundamental analysis methods and technical analysis methods. Most of our educational resources
are easily accessible through PC and APP versions of our client software. Certain materials are also available on our websites.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->45<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Market Information </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide comprehensive market information to
our customers, including real-time price quotes, technical indicators, relevant market news and macroeconomic data and news. Market information
is accessible by our customers and potential customers through PC and APP versions of our client software and our website.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Customer Support</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are committed to providing high-quality customer
support. Most of our services, including investor education, market information and research support services, are accessible through
our client software, which we believe provides a positive experience for our customers due to its user-friendliness and easy access. Besides
our client software, we have a dedicated team of customer service personnel that handles real-time customer inquiries about our software,
market news and research reports, and other questions, via call, text message and online instant message.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We request that all our customer representatives
conduct customer communications via our communication system that is closely monitored by us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, we receive customer complaints from
time to time. To ensure that reasonable complaints made by each customer are adequately addressed and for risk management purposes, we
have established a customer complaint department at our customer service center. For a complaint received, our customer compliant officer
will first confirm details of the complaint with the customer and then verify the facts with the relevant department. Based on our verification
results and our internal policy, we seek to resolve complaints through discussions with the customer. The complaint and our response are
recorded in the CRM system, and feedback is also provided to relevant departments. We also report complaints to the compliance department,
which will check for noncompliance and advise the relevant department to take rectification measures, if necessary.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Technology Infrastructure</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The client software and the CRM system comprise
our core technology infrastructure and enable us to move each key phase of our business operation online.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Our Trading Platforms</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our proprietary platform is an all-electronic
trading system, consisting of host computers, client-side terminals and related communication system. Our trading system supports the
trading and payment/settlement of collectibles, artworks and commodities. It is an electronic platform developed by a third-party software
development company and customized for us, primarily consisting of a matching system, a transaction monitoring system, an account managing
system and a settlement system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Matching is a core function of our trading platforms.
Our system concludes transactions by matching all of the transactions submitted by the traders. The transaction monitoring system is responsible
for monitoring the daily transactions in real-time to ensure fairness and accuracy in our trading platforms. The settlement system verifies
and reconciles daily statistical data with the banks&#8217; transaction system, and completes the registration and settlement (or payment)
of collectibles or artwork units once the transaction data is verified.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Through our trading platform, we provide customers
with timely and comprehensive market information, investor education programs, simulated trading, research reports, quantitative analysis
tools and interactive customer support functions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our website www.ocgroup.hk is an essential part
of our trading platforms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The website is important as it is the gateway
to our trading platforms. It publishes our membership and trading rules, trading information disclosure, and product introductions, and
provides services to traders, such as account management. Traders may open, close and manage their accounts with us on our website. A
client-end terminal may be downloaded from our website. Through the terminal, traders may access their account with us and conduct transactions
in collectibles or artwork units, such as purchasing and selling and submitting inquiries. Data transmission between the traders and our
trading system is encrypted to prevent data leaks.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our trading system hardware platform, clearing
system hardware platform and disaster recovery system are hosted on Ali Cloud. The real-time data synchronization functionality which
we provide ensures the safety of transaction data.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide industry solutions and related software
products, system development and technical support services for our cooperation e-commerce platform customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Offering and trading of collectibles, artwork
and commodities on our platform</i>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Offering and trading of collectibles, artwork
and commodities on our platform involves a number of parties, namely, Original Owners, Offering Agents, and Traders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">An Original Owner is the original
owner of the collectible, artwork or commodity to be offered and traded on our platform. The Original Owner must have good and marketable
title to the collectible or artwork and have the right to dispose of the collectible or artwork.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">An Offering Agent is an entity
that is experienced with collectibles, artwork or commodity or their investment and has a good reputation. The Offering Agent is engaged
by the Original Owner to assist him or her with the offering and trading of collectibles, artwork or commodity, such as preparation of
listing applications and assigning an investment value, research, organizing promotions and marketing activities, communicating with
potential investors, and similar functions. In general, Kashi Longrui will carry out this business.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">A Trader is anyone who is 18
years or older or any entity that maintains a trading account with us through our electronic trading platform and participates in the
trading of collectibles, artwork or commodity. Once a Trader acquires one or more units of collectibles and artwork, the Trader becomes
the owner of that collectible and artwork.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additional parties such as insurer, appraisal
firm and custodian for collectibles or artwork may be retained in connection with the offering and trading of collectibles or artwork
on our system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Original Owner and the Offering Agent are
required to comply with our rules in connection with the offering of collectibles, artwork or commodity. If we discover any violation,
we will require that they take corrective actions. If the Offering Agent engages in fraudulent activities, such as putting out false or
misleading advertisements or disclosure on the collectible, artwork or commodity, it may be barred from participating in any offering
for up to two years, in addition to any legal liabilities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->47<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the main signer to apply for the listing, the process is as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;<img alt="" src="image_001.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For publicly list collectibles and artworks hosted
on our platforms:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;<img alt="" src="image_002.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->48<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We strive to minimize conflicts of interest with our customers, which
we believe is essential for our long-term success. Under the trading rules of the two exchanges on which we operate, we do not set, quote
or influence the trading prices, and cannot access our customers&#8217; money.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Main Trading Rules for Individual Customers</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Traders log in to their own account through the
customer platform for trading. The transaction application shall be deemed to be the transaction commission submitted by the dealer to
the online platform. Once the transaction is completed, the ownership of the corresponding physical object will belong to the purchaser
of the transaction. For the completion of physical delivery for the items, the physical holder can apply for delivery or voluntarily deposit
the collectibles, artwork or commodity in a cooperative third-party storage company. The applicant for the transaction must fulfill the
corresponding obligations and settle with the other party in accordance with the method determined by these rules.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We monitor and regulate the conduct of traders
on a daily basis through our real-time monitoring system. If there are irregular trading activities that may affect the trading price
and volume of collectible, artwork units or commodities, we will seek clarification from the trader(s) by sending inquiries and notices,
conducting interviews, and the like. If there is any violation of our trading rules, we may take the following action:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">issue oral or written warnings;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">request that the trader submit
a written commitment;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">issue a reprimand;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">impose a fine;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">suspend or limit trading activities;
or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">revoke the qualifications of
the trader.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The exchanges have not adopted any deposit-based
leveraged trading system. Customers can only use the funds as they are deposited.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Sales and Marketing</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our marketing activities include promoting our
brand to increase recognition, attracting new customers through targeted marketing and promoting our client software, which has a broader
reach of users who might become our potential customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are currently marketing our electronic trading platform through
participation in culture and art exhibitions and internet advertising, both through online and traditional marketing channels. Although
the in-person meetings and culture and art exhibitions were suspended in China during the outbreak of COVID-19 during the first half of
2020. In addition, <span>travel restrictions, quarantine requirements and/or temporary closure of office
buildings and facilities were imposed by local governments due to the outbreak of Omicron variant in Hong Kong and many cities in China,
including Shenzhen, Xi&#8217;an, Shanghai, Guangzhou, Nanjing, Nanchang and Taiyuan in 2022. </span>In early December 2022, Chinese government
eased the strict control measure for COVID-19, which has led to surge in increased infections and disruption in our business operations
in December 2022 and January 2023 and our marketing activities have been negatively impacted in the cities that governments have imposed
such restrictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our online marketing relies mainly on search engine
marketing and displaying advertisements on portal websites. We also actively promote our client software through mobile application stores.
In addition, we promote our brand and software through our corporate pages on popular interactive social media such as Weibo and WeChat.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We promote our brands through other traditional
media channels such as by placing advertisements in newspapers and magazines.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We focus on investing in cost-effective marketing
initiatives and continuously evaluate the effectiveness of various marketing channels to optimize the allocation of our marketing spending.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->49<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Interested persons who provide their contact information
to us become our potential customers. We also promote our client software through various websites and app stores. A guest version of
our software is free to download and use. Through simple online registration, people get free access to the user version of our client
software and become our potential customers. We do not conduct cold calls. Additionally, we encourage existing traders to introduce new
traders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our customer representatives interact with potential
customers regarding online collectibles, artwork and commodity trading, our client software and services through call, text message and
instant messaging function in our client software. Our representatives begin building relationships with our customers in anticipation
that they will open trading accounts with us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A potential customer who opens and activates a
trading account with us becomes our customer. We provide more services to customers compared to potential customers, including free usage
of the customer version of the client software which has richer features, as well as access to more comprehensive research reports and
technical analysis tools.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Our Customers</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
customers are the Traders and Original Owners. Because we have listed only 31 types </span><span style="font-size: 10pt">&#160;</span>&#160;<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">of
collectibles, artwork and commodities in 2022 and we are constantly marketing and increasing our customer base, it is difficult to ascertain
if the loss of a single customer, or a few customers, would have a material adverse effect on us. No one customer constitutes in the
aggregate 10% or more of our consolidated revenue.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Customers can open trading accounts through the
online account creation link on our official websites, International Exchange and HKDAEx. Before the customer can finish opening an account,
our websites provide Risks and Warnings, a Market Entry Agreement and Transaction Rules for the customer to review and confirm before
they are able to move to the next steps. Our transaction rules specifies the qualification requirements for the customer to open and activate
a trading account, as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A trader is a person who
opens a trading account with the exchange platform and participates in the trades of cultural and art collections.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Trader&#8217;s Qualification</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">(a) Natural person. A natural
person who trades cultural and art collections and commodities on the exchange platform must provide account opening information (a personal
information form, a copy of passport or ID card from mainland China, Hong Kong, Macao or Taiwan) and meet the following requirements:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Meet the legal age requirement
in the jurisdiction where he/she is located, and have the ability and capacity to take full civil responsibility and assume liability;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Have certain knowledge of the
cultural and art collection investment market, and have certain investment experience in the cultural and art collection market;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Have a deep understanding of
the trading model and investment risk of the cultural and art collections with the exchange&#8217;s trading platform, and have strong
risk identification ability and risk tolerance;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">4)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Have certain internet and computer
operation capabilities, abide by relevant laws and regulations, and engage in cultural and art collection trading activities according
to relevant laws and regulations; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify; text-indent: 4.5pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">5)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Other conditions as stipulated
by the exchange.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">(b) Institutions. Institutions
that conduct cultural and art collection and commodities trading must provide various supporting materials (original and photocopy of
corporate legal personhood certificate, business license, organization code certificate, tax registration certificate, etc.) and meet
the following requirements:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Must be an enterprise, legal
entity or other organization that lawfully operates under laws at home and abroad, and no law, regulatory requirement, or the rules of
this exchange platform may prohibit or restrict the investment of such entity;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Have a deep understanding of
the trading model and investment risk of the cultural and art collections with the exchange&#8217;s trading platform, and have strong
risk identification ability and risk tolerance; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Understand the risks of investing
in the cultural and art collections, and have completed the internal approval and authorization procedures stipulated by the statutes
and / or company charter/bylaws.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A potential customer is required to read these
rules, and click to confirm that he/she has read such rules before he/she can proceed to the next step of opening an account.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our customer service staff will review each application
and all materials submitted to ensure they are complete. Once an application is approved by the customer service manager, the customer
will receive notification and obtain a trading account number and initial login password, which are automatically generated by our system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">After completion of the account opening process,
a customer can link his or her personal bank account to his or her trading deposit account, which is an independent depository account
under his/her trading account. We cannot access our customers&#8217; money, but we can monitor their trading activities and account balances
in real time through the exchange&#8217;s information system. Customers can freely withdraw funds from their accounts so long as the minimum
deposit requirements for their trading positions are met. After a trading account is activated, it becomes a &#8220;tradable&#8221; account
and will remain tradable until the account is closed. We define &#8220;active&#8221; accounts as tradable accounts that have executed
at least one trade during a relevant period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that the growth of tradable accounts
and active accounts, combined with our strategy to focus on premier customers, has historically contributed to the significant growth
of our trading volume.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Competition </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
art e-commerce market is highly competitive and many traditional art galleries and auction houses may provide a platform for collectibles
or artwork owners to sell their collections. However, their trading model is substantially different from ours. As of December 31, 2022,
there were over 10 active art e-commerce platforms operating nationwide in China. The trading service providers compete with </span><span style="font-size: 10pt">&#160;</span>&#160;<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
other for customers and trading volume based on factors including brand, technology, research and customer services.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Intellectual Property </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We regard our trademarks, domain names, know-how,
proprietary technologies and similar intellectual property as critical to our success, and we rely on trademark law, trade secret law
and confidentiality and invention assignment agreements with our employees and others to protect our proprietary rights.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have one registered trademark in China that
we acquired from a third party. This trademark is a graphic trademark with registration No. 5120703. We submitted the transfer documents
to the Trademark Office of the State Administration for Industry and Commerce of the PRC on January 29, 2019, and the transfer of ownership
to us was completed on July 6, 2019.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have one software copyright registration and
own 6 domain names. The software copyright name is &#8220;Entrusted Warehouse Management System V1.0.&#8221; which has been upgraded in
2021. We also own the software for our app which has not been registered with Copyright Protection Center of China.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy or otherwise obtain and use our intellectual property. Monitoring unauthorized use of
our intellectual property is difficult and costly, and we cannot be certain that the steps we have taken will prevent misappropriation
of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which
could result in substantial costs and diversion of our resources.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, third parties may initiate litigation
against us alleging infringement of their proprietary rights or declaring their non-infringement of our intellectual property rights.
In the event of a successful claim of infringement and our failure or inability to develop non-infringing technology or license the infringed
or similar technology on a timely basis, our business could be harmed. Moreover, even if we are able to license the infringed or similar
technology, license fees could be substantial and may adversely affect our results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See &#8220;<i>Risk Factors&#8212;Risks Related
to Our Business&#8212;We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business
and competitive position</i>.&#8221; and <i>&#8220;&#8212;We may be subject to intellectual property infringement claims, which may be
expensive to defend and may disrupt our business and operations.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Regulations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This section sets forth a summary of the most
significant rules and regulations that affect our business activities in China and Hong Kong.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 10pt"><b><span style="text-decoration:underline">PRC Regulations</span></b></span>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>PRC Laws and Regulations relating to Foreign Investment</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>The PRC Foreign Investment Law</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March&#160;15, 2019, the National People&#8217;s
Congress approved the Foreign Investment Law, which has taken effect on January&#160;1, 2020 and replaced three existing laws on foreign
investments in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise
Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The&#160;Foreign
Investment Law&#160;embodies a regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international
practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic invested enterprises in China.
The&#160;Foreign Investment Law&#160;establishes the basic framework for the access to, and the promotion, protection and administration
of foreign investments in view of investment protection and fair competition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the&#160;Foreign Investment Law,
&#8220;foreign investment&#8221; refers to investment activities directly or indirectly conducted by one or more natural persons, business
entities, or otherwise organizations of a foreign country (collectively referred to as &#8220;foreign investor&#8221;) within China, and
the investment activities include the following situations: (i)&#160;a foreign investor, individually or collectively with other investors,
establishes a foreign-invested enterprise within China; (ii)&#160;a foreign investor acquires stock shares, equity shares, shares in assets,
or other like rights and interests of an enterprise within China; (iii)&#160;a foreign investor, individually or collectively with other
investors, invests in a new project within China; and (iv)&#160;investments in other means as provided by laws, administrative regulations,
or the State Council.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the&#160;Foreign Investment Law,
the State Council will publish or approve to publish a catalogue for special administrative measures, or the &#8220;Negative List.&#8221;
The&#160;Foreign Investment Law&#160;grants national treatment to foreign invested entities, except for those foreign invested entities
that operate in industries deemed to be either &#8220;restricted&#8221; or &#8220;prohibited&#8221; in the &#8220;Negative List&#8221;.
However, it is unclear whether any updated &#8220;Negative List&#8221; to be published by the State Council in the future will be different
from the current&#160;Special Administrative Measures for Market Access of Foreign Investment (Negative List) promulgated by the NDRC
and the MOFCOM on December 27, 2021. The&#160;Foreign Investment Law&#160;provides that foreign invested entities operating in foreign
restricted or prohibited industries will require market entry clearance and other approvals from relevant PRC governmental authorities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Furthermore, the&#160;Foreign Investment Law&#160;provides
that foreign invested enterprises established according to the existing laws regulating foreign investment may maintain their structure
and corporate governance within five years after the implementing of the&#160;Foreign Investment Law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">In addition, the&#160;Foreign Investment Law&#160;also
provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that
local governments shall abide by their commitments to the foreign investors; foreign-invested enterprises are allowed to issue stocks
and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation
shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; mandatory technology
transfer is prohibited; and the capital contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual
property rights, indemnity or compensation legally obtained, or proceeds received upon settlement by foreign investors within China, may
be freely remitted inward and outward in RMB or a foreign currency. Also, foreign investors or the foreign investment enterprise should
be imposed legal liabilities for failing to report investment information in accordance with the requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b style="font-style: normal; font-weight: normal"><i>Regulations on Overseas Listings</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 17, 2023, the CSRC released the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the &#8220;New Overseas Listing Rules&#8221;)
with five interpretive guidelines, which will take effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises
to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an
issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities
offering after having been listed on an overseas market; c) a domestic company seeking an overseas direct or indirect listing of its assets
through single or multiple acquisition(s), share swap, transfer of shares or other means. According to the Notice on Arrangements for
Overseas Securities Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already
completed overseas listing or (ii) has already obtained the approval for the offering or listing from overseas securities regulators or
exchanges but has not completed such offering or listing before effective date of the new rules and completes such offering or listing
before September 30, 2023 will be considered as an existing listed company and is not required to make any filing until it conducts a
new offering in the future. Furthermore, upon the occurrence of any of the material events specified below after an issuer has completed
its offering and listed its securities on an overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working
days after the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas
securities regulatory agencies or other competent authorities; (iii) change of listing status or transfer of listing segment; or (iv)
voluntary or mandatory delisting.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Negative List Relating to Foreign Investment </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Investment activities in the PRC by foreign investors
are principally governed by the Guidance Catalog of Industries for Foreign Investment promulgated and as amended from time to time by
MOFCOM and National Development and Reform Commission (the &#8220;NDRC&#8221;) and MOFCOM. The NDRC and the MOFCOM promulgated the Special
Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition) (the &#8220;2021 National Negative List&#8221;) and
the Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2021 Edition) (the &#8220;2021
FTZ Negative List&#8221;) (collectively the &#8220;2021 Negative Lists&#8221;) on December 27, 2021, which took effect on January 1, 2022.
Industries listed in the 2021 Negative Lists are divided into two categories: restricted and prohibited. Industries not listed in the
2021 Negative Lists are generally deemed as constituting a third &#8220;permitted&#8221; category.&#160; Establishment of wholly foreign-owned
enterprises is generally allowed in permitted industries. Some restricted industries are limited to equity or contractual joint ventures,
while in some cases Chinese partners are required to hold the majority interests in such joint ventures. In addition, restricted category
projects are subject to higher-level government approvals. Foreign investors are not allowed to invest in industries in the prohibited
category. Industries not listed in the Negative List are generally open to foreign investment unless specifically restricted by other
PRC regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Though the business we conduct through the variable
interest entity is not within the category in which foreign investment is currently restricted or prohibited under the Negative List or
other PRC Laws, we expect that in the future Jiangsu Yanggu will engage in marketing survey services for online marketplaces. Marketing
survey services are within the category in which foreign investment is restricted pursuant to the Negative List. In addition, we intend
to centralize our management and operation in the PRC to avoid being restricted from conducting certain business activities which are
important for our current or future business but are currently restricted or might be restricted in the future. As such, we believe the
VIE agreements between the WFOE and the variable interest entity are necessary and essential for our business operations without the equity
ownership of VIE. These contractual arrangements with the variable interest entity and its shareholders enable us to exercise effective
control over the variable interest entity and hence consolidate their financial results as the VIE without being deemed as a foreign invested
company.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>PRC Laws and Regulations relating to Wholly Foreign-owned Enterprises</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The establishment, operation and management of
corporate entities in China are governed by the PRC Company Law, which was promulgated by the Standing Committee of the National People&#8217;s
Congress on December 29, 1993 and became effective on July 1, 1994. It was last amended on October 26, 2018 and the amendments became
effective on the same day. Under the PRC Company Law, companies are generally classified into two categories, namely, limited liability
companies and joint stock limited companies. The PRC Company Law also applies to limited liability companies and joint stock limited companies
with foreign investors. Where there are otherwise different provisions in any law on foreign investment, such provisions shall prevail.
The Law of the PRC on Wholly Foreign-invested Enterprises was promulgated and became effective on April 12, 1986, and was last amended
and became effective on October 1, 2016. The Implementing Regulations of the PRC Law on Foreign-invested Enterprises were promulgated
by the State Council on October 28, 1990. They were last amended on February 19, 2014 and the amendments became effective on March 1,
2014. The Provisional Measures on Administration of Filing for Establishment and Change of Foreign Investment Enterprises were promulgated
by MOFCOM and became effective on October 8, 2016, and were last amended on July 20, 2017 with immediate effect. The above-mentioned laws
formed the legal framework for the PRC Government to regulate the WFOEs. These laws and regulations governed the establishment, modification,
including changes to registered capital, shareholders, corporate form, merger and split, dissolution and termination of the WFOEs before
January 1, 2020. On January 1, 2020, the Law of the PRC on Wholly Foreign-invested Enterprises and the Implementing Regulations of the
PRC Law on Foreign-invested Enterprises were abolished by the Foreign Investment Law and its implementing rules, the Provisional Measures
on Administration of Filing for Establishment and Change of Foreign Investment Enterprises was replaced by the Measures of Foreign Investment
Information Report promulgated by MOFCOM on December 30, 2019 (effective as of January 1, 2020).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the above regulations, a WFOE should
get approval by or filed with MOFCOM before its establishment and operation. Nanjing Rongke Business Consulting Service Co., Ltd. is a
WFOE since established, and has filed with the local administration of MOFCOM. Its establishment and operation are in compliance with
the above-mentioned laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>PRC Laws and Regulations Related to Art Trading and Related Service
Industry</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>PRC Law relating to Property Rights</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Civil Code of the People&#8217;s Republic
of China (&#8220;Civil Code&#8221;) was released on May 28, 2020 and became effective on January 1, 2021, which has replaced Property
Right Law of China. According to The Civil Code, the creation and transfer of property rights in movable property shall be effective upon
delivery. But if the parties have agreed that the transferor may continue to take possession of the property, the property right shall
be effective when the agreement takes effect. According to our Trading Rules, the owner of collectibles or artworks shall entrust our
cooperative warehousing company to hold and transport the collectibles or artworks sold on our platform. In practice, the winning bidder
will receive delivery of the order on our platform after bid closing, and can collect the collectibles or artwork at the cooperative warehousing
company by showing the delivery order. The delivery order is treated as the agreement between the owner of the collectibles or artwork
and the bid winner to transfer the property rights in the collectibles or artwork. Accordingly, upon the winning bidder&#8217;s receipt
of the delivery order, the winning bidder owns the property rights of the collectibles or artworks purchased on our platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>PRC Laws and Regulations relating to Trading
Exchange</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to &#8220;Decision Of The State Council
On Cleaning Up And Rectifying Various Trading Places And Taking Effective Precautions Against Financial Risks&#8221; (&#8220;Decision
No. 38&#8221;) promulgated by the State Council of the PRC on November 11, 2011 and effective on the same day, and &#8220;Opinions Of
The General Office Of The State Council On The Implementation Of The Clean-Up And Rectification Of Various Trading Venues&#8221; (&#8220;Opinion
No. 37&#8221;) promulgated by the General Office of the State Council of the PRC on July 12, 2012 and effective on the same day, any trading
places and their branches that violate any of the following provisions shall be cleaned up and rectified. Such parties must not</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Divide any equity into equal
shares for public offering. An &#8220;equal share public offering&#8221; is when a trading place uses its services and facilities to
divide its equity into equal shares and sell them to investors. The relevant provisions of the company law and the securities law shall
apply to the public issuance of shares by a joint stock company.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Adopt centralized trading. The
&#8220;centralized trading methods&#8221; referred to in this opinion include collective bidding, continuous bidding, electronic matching,
anonymous trading, market makers and other trading methods, except for agreement transfers and legal auctions.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Continuously list and trade
the rights and interests in accordance with standardized trading units. The &#8220;standardized trading unit&#8221; referred to in this
opinion refers to the minimum trading unit set for other equities other than equity, and trading at the minimum trading unit or integer
multiples thereof. &#8220;Continuous listing transaction&#8221; refers to listing and selling the same trading variety within 5 trading
days after buying or listing, and buying the same trading variety within 5 trading days after selling.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(4)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Have a cumulative number of
equity holders exceeding 200. Except as otherwise provided for by laws and administrative regulations, the cumulative number of actual
holders of any equity shall not exceed 200 during the term of the company&#8217;s existence, no matter by the way of issuance or transfer.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(5)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Carry out standardized contract
trading by centralized trading. The &#8220;standardized contract&#8221; referred to in this opinion includes two situations: one is a
unified contract established by the trading place with fixed terms other than price, which stipulates the delivery of a certain amount
of the subject matter at a certain time and place in the future. The other is a contract made by the exchange that gives the buyer the
right to buy or sell the agreed subject matter at a specified price at a certain time in the future.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(6)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Without the approval of the
relevant financial administrative department of the state council, establish either trading places for the trading of financial products
such as insurance, credit and gold, or use any other existing trading places for the trading of financial products such as insurance,
credit and gold.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, according to &#8220;Notice Concerning
The Issuance Of Minutes Of The Special Session On The Clean-Up And Rectification Of Stamp And Commemorative Coins Trading Places&#8221;
promulgated by the Office of the Joint Meeting on August 2, 2017, any stamps, coins and magcards using a stock issuance-like model to
trading places mainly trading stamps by a concentrated bidding and &#8220;T+0&#8221; transaction method should cease to operate. The stamps,
coins and magcards being illegally traded must be made off-line in time. Trading places which have ceased operations shall not re-start
operating unless they obtain approval from the provincial government and complete the required filing with the Joint Meeting. Provincial
governments should re-evaluate the necessity of transactions of stamps, coins and magcards, considering the development and interests
of the economic society, as well as risks, efficiencies and costs. Provided that a provincial government does considers it necessary to
maintain transactions of stamps, coins and magcards, the provincial government may appoint a stamps, coins and magcards exchange to organize
stamps, coins and magcards transactions by way of transfer of property through agreements. Such exchange must have obtained permission
from the provincial government, passed the examination and acceptance check of the provincial government and completed filings at relevant
joint meetings. In addition, such exchange must be in strict compliance with Decision No.38 and Opinion No.37, shall not adopt or allow
concentrated bidding or other types of centralized trading, and the interval between sale and purchase of a same commodity shall not be
less than 5 trading days.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Measures Of Jiangsu Province on The Supervision
and Administration of Trading Exchanges (&#8220;Jiangsu Trading Exchange Measures&#8221;) were issued by the Jiangsu Financial Supervision
Bureau on March 1, 2023. According to Jiangsu Trading Exchange Measures, trading exchanges that are established in the administrative
region of the Jiangsu province with its name contains the words &#8220;exchange&#8221; or &#8220;trading center&#8221; engaging in equity
or commodity trading, excluding vehicles and real estate trading places and trading exchanges of financial products approved by the financial
management department of the State Council are subject to this Jiangsu Trading Exchange Measures and shall obtain prior approval. The
branch offices of the trading exchanges from other provinces are subject to these measures as well. The subsidiaries of the VIE in China
do not use any name of trading center or trading exchange and they only provide maintenance, supporting and warehouse services to the
trading platforms in Hong Kong.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, there is a Notice On Further Strengthening
The Supervision Of All Kinds Of Trading Places In The Province, released by Jiangsu Financial Office on July 25, 2016, according to which,
the &#8220;accredited investor&#8221; in any trading place should meet the following criteria and provide assets proof when opening an
account:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">The investor&#8217;s available
fund balance at the time of opening an escrow account shall not be less than RMB 500,000 (approximately $70,000); and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.65in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">The market value of the investor&#8217;s
assets shall not be less than RMB 2 million (approximately $290,000).</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Also, all of the trading places in Jiangsu must
use Jiangsu Exchange Depository and Clearing Co., Ltd. (&#8220;JS Clearing&#8221;) to register investors and investment information and
settle investors&#8217; funds.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Regulations on Intellectual Property Rights</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PRC has adopted comprehensive legislation
governing intellectual property rights, including copyrights, patents, trademarks and domain names.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Copyrights. </b>The Copyright Law was adopted
in 1990 and amended in 2001, 2010 and 2020. The amended version in 2020 came into effect on June 1, 2021. The amended Copyright Law extends
copyright protection to internet activities, products disseminated over the internet and software products. In addition, there is a voluntary
registration system administered by the China Copyright Protection Center. The amended Copyright Law also requires registration of a copyright
pledge. According to the Copyright Law, an infringer will be subject to various civil liabilities, which include stopping the infringement,
eliminating the damages, apologizing to the copyright owners and compensating the losses of copyright owners. The Copyright Law further
provides that the infringer must compensate the actual loss suffered by the copyright owner. If the actual loss of the copyright owner
is difficult to calculate, the illegal income received by the infringer as a result of the infringement will be deemed as the actual loss
or if such illegal income is also difficult to calculate, the court can decide the amount of the actual loss up to RMB5,000,000. Under
the Copyright Law, the term of protection for copyrighted software of legal persons is 50 years and ends on December 31 of the 50<sup>th
</sup>year from the date of first publishing of the software.<b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Patents. </b>The Patent Law of the PRC promulgated
in December 2008, which became effective in October 2009 and was recently amended by the Standing Committee of the National People&#8217;s
Congress of China on October 17, 2020 and became effective on June 1, 2021, provides for patentable inventions, utility models and designs.
An invention or utility model for which patents may be granted shall have novelty, creativity and practical applicability. The State Intellectual
Property Office under the State Council is responsible for examining and approving patent applications. The protection period is 20 years
for inventions and 10 years for utility models and designs, all of which commence from the date of application of patent rights. The protection
period has been slightly amended in recent amendment which became effective on June 1, 2021. The terms of protection for invention and
utility patents will still be 20 years and 10 years, respectively, in general. The term of protection for a design patent will be extended
from 10 years to 15 years. In addition, for invention patents, in situations where a patent is only granted after 4 years or more from
its filing date or 3 years or more after a request for substantive examination date, the applicant can request for an extension of protection
term for any unreasonable delay.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Trademarks</b>. The Trademark Law of the PRC
promulgated in August 2013 which took effect in May 2014 (the &#8220;Trademark Law&#8221;) and was last amended on April 23, 2019 which
became effective on November 11, 2019. Its implementation rules protect registered trademarks. The Trademark Office of National Intellectual
Property Administration, PRC, formerly the PRC Trademark Office of the State Administration of Market Regulation is responsible for the
registration and administration of trademarks throughout the PRC. The Trademark Law has adopted a &#8220;first-to-file&#8221; principle
with respect to trademark registration. The validity period of registered trademarks is 10 years from the date of approval of trademark
application, and may be renewed for another 10 years provided relevant application procedures have been completed within 12 months before
the end of the validity period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Domain Names</b>. Domain names are protected
under the Administrative Measures for the Internet Domain Names of the PRC promulgated by the Ministry of Industry and Information Technology
of the PRC effective on December 20, 2004 and the Administrative Measures for Internet Domain Names promulgated by MIIT, effective on
November 1, 2017 (the &#8220;Domain Name Measures&#8221;). MIIT is the major regulatory body responsible for the administration of the
PRC internet domain names. The Domain Names Measures has adopted a &#8220;first-to-file&#8221; principle with respect to the registration
of domain names.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>PRC Laws and Regulations Relating to Mergers and Acquisitions</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Regulations on Mergers and Acquisitions of
Domestic Companies by Foreign Investors, or the M&amp;A Rules, adopted by six PRC regulatory agencies in August 2006 and amended in 2009,
requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled
by PRC companies or individuals to obtain the approval of the China Securities Regulatory Commission, or the CSRC, prior to the listing
and trading of such special purpose vehicle&#8217;s securities on an overseas stock exchange. In September 2006, the CSRC published a
notice on its official website specifying documents and materials required to be submitted to it by a special purpose vehicle seeking
CSRC approval of its overseas listings. The application of the M&amp;A Rules remains unclear. Our PRC counsel has advised us based on
their understanding of the current PRC laws, rules and regulations that the CSRC&#8217;s approval should not be required for the listing
and trading of our ordinary shares on NASDAQ, given that: (i) we established our PRC subsidiary, the WFOE, by means of direct investment
rather than by merger with or acquisition of PRC domestic companies; and (ii) no explicit provision in the M&amp;A Rules classifies the
respective contractual arrangements between the WFOE, Jiangsu Yanggu and its shareholders as a type of acquisition transaction falling
under the M&amp;A Rules.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>PRC Laws and Regulations Relating to Foreign Exchange</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>General administration of foreign exchange</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The principal regulation governing foreign currency
exchange in the PRC is the <i>Administrative Regulations of the PRC on Foreign Exchange </i>(the &#8220;Foreign Exchange Regulations&#8221;),
which were promulgated on January 29, 1996, became effective on April 1, 1996 and were last amended on August 5, 2008. Under these rules,
Renminbi is generally freely convertible for payments of current account items, such as trade- and service-related foreign exchange transactions
and dividend payments, but not freely convertible for capital account items, such as capital transfer, direct investment, investment in
securities, derivative products or loans unless prior approval by competent authorities for the administration of foreign exchange is
obtained. Under the Foreign Exchange Regulations, foreign-invested enterprises in the PRC may purchase foreign exchange without the approval
of SAFE to pay dividends by providing certain evidentiary documents, including board resolutions, tax certificates, or for trade- and
services-related foreign exchange transactions, by providing commercial documents evidencing such transactions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Circular No. 75, Circular No. 37 and Circular
No. 13</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circular 37 was released by SAFE on July 4, 2014
and abolished Circular 75 which had been in effect since November 1, 2005. Pursuant to Circular 37, a PRC resident should apply to SAFE
for foreign exchange registration of overseas investments before it makes any capital contribution to a special purpose vehicle, or SPV,
using his or her legitimate domestic or offshore assets or interests. SPVs are offshore enterprises directly established or indirectly
controlled by domestic residents for the purpose of investment and financing by utilizing domestic or offshore assets or interests they
legally hold. Following any significant change in a registered offshore SPV, such as capital increase, reduction, equity transfer or swap,
consolidation or division involving domestic resident individuals, the domestic individuals shall amend the registration with SAFE. Where
an SPV intends to repatriate funds raised after completion of offshore financing to the PRC, it shall comply with relevant PRC regulations
on foreign investment and foreign debt management. A foreign-invested enterprise established through return investment shall complete
relevant foreign exchange registration formalities in accordance with the prevailing foreign exchange administration regulations on foreign
direct investment and truthfully disclose information on the actual controller of its shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If any shareholder who is a PRC resident (as determined
by the Circular No. 37) holds any interest in an offshore SPV and fails to fulfil the required foreign exchange registration with the
local SAFE branches, the PRC subsidiaries of that offshore SPV may be prohibited from distributing their profits and dividends to their
offshore parent company or from carrying out other subsequent cross-border foreign exchange activities. The offshore SPV may also be restricted
in its ability to contribute additional capital to its PRC subsidiaries. Where a domestic resident fails to complete relevant foreign
exchange registration as required, fails to truthfully disclose information on the actual controller of the enterprise involved in the
return investment or otherwise makes false statements, the foreign exchange control authority may order them to take remedial actions,
issue a warning, and impose a fine of less than RMB 300,000 (approximately $43,000) on an institution or less than RMB 50,000 (approximately
$7,000) on an individual.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circular 13 was issued by SAFE on February 13,
2015, and became effective on June 1, 2015. Pursuant to Circular 13, a domestic resident who makes a capital contribution to an SPV using
his or her legitimate domestic or offshore assets or interests is no longer required to apply to SAFE for foreign exchange registration
of his or her overseas investments. Instead, he or she shall register with a bank in the place where the assets or interests of the domestic
enterprise in which he or she has interests are located if the domestic resident individually seeks to make a capital contribution to
the SPV using his or her legitimate domestic assets or interests; or he or she shall register with a local bank at his or her permanent
residence if the domestic resident individually seeks to make a capital contribution to the SPV using his or her legitimate offshore assets
or interests.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of this report, the individual
shareholders of Jiangsu Yanggu known as Chinese citizens, who also owned our shares, have completed registrations in accordance with Circular
37.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Circular 19 and Circular 16</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circular 19 was promulgated by SAFE on March 30,
2015, and became effective on June 1, 2015. According to Circular 19, foreign exchange capital of foreign-invested enterprises shall be
granted the benefits of Discretional Foreign Exchange Settlement (&#8220;Discretional Foreign Exchange Settlement&#8221;). With Discretional
Foreign Exchange Settlement, foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and
interests of monetary contribution has been confirmed by the local foreign exchange bureau, or for which book entry registration of monetary
contribution has been completed by the bank, can be settled at the bank based on the actual operational needs of the foreign-invested
enterprise. The allowed Discretional Foreign Exchange Settlement percentage of the foreign exchange capital of a foreign-invested enterprise
has been temporarily set to be 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated account and
if a foreign-invested enterprise needs to make any further payment from such account, it will still need to provide supporting documents
and to complete the review process with its bank. Furthermore, Circular 19 stipulates that foreign-invested enterprises shall make bona
fide use of their capital for their own needs within their business scopes. The capital of a foreign-invested enterprise and the Renminbi
if obtained from foreign exchange settlement shall not be used for the following purposes:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">directly or indirectly used
for expenses beyond its business scope or prohibited by relevant laws or regulations;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">directly or indirectly used
for investment in securities unless otherwise provided by relevant laws or regulations;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">directly or indirectly used
for entrusted loan in Renminbi (unless within its permitted scope of business), repayment of inter-company loans (including advances
by a third party) or repayment of bank loans in Renminbi that have been sub-lent to a third party; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">directly or indirectly used
for expenses related to the purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises).</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circular 16 was issued by SAFE on June 9, 2016.
Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to Renminbi on a
self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange capital items (including but
not limited to foreign currency capital and foreign debts) on a self-discretionary basis applicable to all enterprises registered in the
PRC. Circular 16 reiterates the principle that an enterprise&#8217;s Renminbi converted from foreign currency denominated capital may
not be directly or indirectly used for purposes beyond its business scope or purposes prohibited by PRC laws or regulations, and such
converted Renminbi shall not be provided as loans to nonaffiliated entities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Circulars 16 and 19 address foreign direct investments
into the PRC, and stipulate the procedures applicable to foreign exchange settlement. If and when proceeds in foreign currency raised
in any offering are settled to RMB, our WFOE would be subject to Circular 19 or Circular 16.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Dividend distribution</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Foreign Investment Law, promulgated in March
15, 2019 and became effective on January 1, 2020, and the Implementation Regulations for the Foreign Investment Law, promulgated in December
26, 2019 and became effective on January 1, 2020, are the key regulations governing distribution of dividends of foreign-invested enterprises.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to these regulations, a wholly foreign-owned
enterprise in China, or a WFOE, may pay dividends only out of its accumulated profits, if any, determined in accordance with PRC accounting
standards and regulations. In addition, a WFOE is required to allocate at least 10% of its accumulated after-tax profits each year, if
any, to statutory reserve funds unless its reserves have reached 50% of the registered capital of the enterprises. These reserves are
not distributable as cash dividends. The proportional ratio for withdrawal of rewards and welfare funds for employees shall be determined
at the discretion of the WFOE. Profits of a WFOE shall not be distributed before the losses thereof before the previous accounting years
have been made up. Any undistributed profit for the previous accounting years may be distributed together with the distributable profit
for the current accounting year.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event that a PRC shareholder holding interests
in a special purpose vehicle fails to fulfill the required SAFE registration pursuant to Circular 37 and Circular 13, the PRC subsidiaries
of that special purpose vehicle may be prohibited from making distributions of profit to the offshore parent and from carrying out subsequent
cross-border foreign exchange activities and the special purpose vehicle may be restricted in their ability to contribute additional capital
into its PRC subsidiary. And, failure to comply with the various SAFE registration requirements described above could result in liability
under PRC law for foreign exchange evasion, including (i)&#160;up to 30% of the total amount of foreign exchange remitted overseas and
deemed to have been evasive and (ii)&#160;in circumstances involving serious violations, a fine of no less than 30% of and up to the total
amount of remitted foreign exchange deemed evasive. Furthermore, the persons-in-charge and other persons at our PRC subsidiaries who are
held directly liable for the violations may be subject to criminal sanctions. These regulations apply to our direct and indirect shareholders
who are PRC residents and may apply to any offshore acquisitions and share transfer that we make in the future if our shares are issued
to PRC residents. See &#8220;<i>Risk Factors&#8212;Risks Related to Doing Business in China&#8212;PRC regulations relating to offshore
investment activities by PRC residents may limit our PRC subsidiary&#8217;s ability to increase its registered capital or distribute profits
to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>PRC Laws and Regulations relating to Taxation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Enterprise Income Tax</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The <i>Enterprise Income Tax Law of the People&#8217;s
Republic of China </i>(the &#8220;EIT Law&#8221;) was promulgated by the Standing Committee of the National People&#8217;s Congress on
March 16, 2007 and became effective on January 1, 2008, and was most recently amended on December 29, 2018 (also the effective date).
The <i>Implementation Rules of the EIT Law </i>(the &#8220;Implementation Rules&#8221;) were promulgated by the State Council on December
6, 2007 and became effective on January 1, 2008. According to the EIT Law and the Implementation Rules, enterprises are divided into resident
enterprises and non-resident enterprises. Resident enterprises shall pay enterprise income tax on their incomes obtained in and outside
the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC shall pay enterprise income tax on the incomes
obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises with no institutions in the PRC, and
non-resident enterprises whose incomes having no substantial connection with their institutions in the PRC, shall pay enterprise income
tax on their incomes obtained in the PRC at a reduced rate of 10%.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The <i>Arrangement between China Mainland and
Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes
on Income </i>(the &#8220;Arrangement&#8221;) was promulgated by the State Administration of Taxation (&#8220;SAT&#8221;) on August 21,
2006 and came into effect on December 8, 2006. According to the Arrangement, a company incorporated in Hong Kong will be subject to withholding
tax at the lower rate of 5% on dividends it receives from a company incorporated in the PRC if it holds a 25% interest or more in the
PRC company. The <i>Notice on the Understanding and Identification of the Beneficial Owners in the Tax Treaty </i>(the &#8220;Notice&#8221;)
was promulgated by SAT and became effective on October 27, 2009. According to the Notice, a beneficial ownership analysis will be used
based on a substance-over-form principle to determine whether or not to grant tax treaty benefits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The WFOE, Jiangsu Yanggu and its subsidiaries
are resident enterprises and pay EIT tax at the rate of 25% in PRC. It is more likely than not that the Company and its offshore subsidiary
would be treated as a non-resident enterprise for PRC tax purposes. Please see Section of &#8220;<i>Taxation - People&#8217;s Republic
of China Enterprise Taxation</i>&#8221;.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Value-added Tax and Business Tax</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The <i>Provisional Regulations on Value-Added
Tax of the PRC </i>(the &#8220;VAT Regulations&#8221;) were promulgated by the State Council on December 13, 1993 and took effect on January
1, 1994, which were last amended on November 19, 2017. The <i>Rules for the Implementation of the Provisional Regulations on Value Added
Tax of the PRC </i>(the &#8220;Rules&#8221;) were promulgated by the Ministry of Finance (&#8220;MOF&#8221;) on December 25, 1993 and
were last amended on October 28, 2011. Pursuant to the VAT Regulations and the Rules, entities or individuals in the PRC engaged in the
sale of goods, the provision of processing, repairs and replacement services and the importation of goods are required to pay VAT, on
the value added during the course of the sale of goods or provision of services. Unless otherwise specified, the applicable VAT rate for
the sale or importation of goods and provision of processing, repair and replacing services is 17%. On April&#160;4, 2018, the Ministry
of Finance and the State Administration of Taxation issued the Notice on Adjustment of VAT Rates, which came into effect on May&#160;1,
2018. According to the abovementioned notice, the taxable goods previously subject to VAT rates of 17% and 11%, respectively, become subject
to lower VAT rates of 16% and 10%, respectively, starting from May&#160;1, 2018. Furthermore, according to the Announcement on Relevant
Policies for Deepening Value-added Tax Reform jointly promulgated by the Ministry of Finance, the State Administration of Taxation and
the General Administration of Customs, which became effective on April&#160;1, 2019, the taxable goods previously subject to VAT rates
of 16% and 10%, respectively, become subject to lower VAT rates of 13% and 9%, respectively, starting from April&#160;1, 2019.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->59<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The SAT and the MOF jointly promulgated the <i>Circular
on Comprehensively Promoting the Pilot Program of the Collection of Valued-added Tax in lieu of Business Tax </i>on March 23, 2016, which
became effective on 1 May 2016. Pursuant to the pilot plan and relevant notices, VAT is generally imposed in lieu of business tax in certain
service industries, including technology services and advertising services, on a nationwide basis. VAT of a rate of 6% applies to revenue
derived from the provision of certain services. Certain small taxpayers under PRC law are subject to reduced value-added tax at a rate
of 3%. Unlike business tax, a taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output VAT chargeable
on the services provided.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the above-regulations, our PRC subsidiary
and consolidated affiliated entities are generally subject to a 6% VAT rate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Dividend Withholding Tax</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Enterprise Income Tax Law provides that since
January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not
have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is
not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the
PRC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to an <i>Arrangement Between the Mainland
of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Incomes </i>(&#8220;Double Tax Avoidance Arrangement&#8221;) and other applicable PRC laws, if a Hong Kong resident
enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double
Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives
from a PRC resident enterprise may be reduced to 5%. However, based on the <i>Circular on Certain Issues with Respect to the Enforcement
of Dividend Provisions in Tax Treaties </i>(the &#8220;SAT Circular 81&#8221;) issued on February 20, 2009 by SAT, if the relevant PRC
tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement
that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the <i>Circular on Several Questions
regarding the &#8220;Beneficial Owner&#8221; in Tax Treaties</i>, which was issued on February 3, 2018 by the SAT and took effect on April
1, 2018, when determining the applicant&#8217;s status of the &#8220;beneficial owner&#8221; regarding tax treatments in connection with
dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated
to pay more than 50% of his or her income in twelve months to residents in third country or region, whether the business operated by the
applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy
any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed
according to the actual circumstances of the specific cases. This circular further provides that applicants who intend to prove his or
her status of the &#8220;beneficial owner&#8221; shall submit the relevant documents to the relevant tax bureau according to the <i>Announcement
on Issuing the Measures for the Administration of Non-Resident Taxpayers&#8217; Enjoyment of the Treatment under Tax Agreements.</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>PRC Laws and Regulations relating to Employment and Social Welfare</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Labor Law of the PRC</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Labor Law of the PRC, which was
promulgated by the Standing Committee of the NPC on July 5, 1994 with an effective date of January 1, 1995 and was last amended on December
29, 2018 and the Labor Contract Law of the PRC, which was promulgated on June 29, 2007, became effective on January 1, 2008 and was last
amended on December 28, 2012, with the amendments coming into effect on July 1, 2013, enterprises and institutions shall ensure the safety
and hygiene of a workplace, strictly comply with applicable rules and standards on workplace safety and hygiene in China, and educate
employees on such rules and standards.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Furthermore, employers and employees shall enter
into written employment contracts to establish their employment relationships. Employers are required to inform their employees about
their job responsibilities, working conditions, occupational hazards, remuneration and other matters with which the employees may be concerned.
Employers shall pay remuneration to employees on time and in full accordance with the commitments set forth in their employment contracts
and with the relevant PRC laws and regulations. Jiangsu Yanggu and its subsidiaries have entered into written employment contracts with
all of the employees and performed its obligations required under the relevant PRC laws and regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Social Insurance and Housing Fund</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the <i>Social Insurance Law of the
PRC</i>, which was promulgated by the Standing Committee of the NPC on October 28, 2010 and became effective on July 1, 2011, and was
last amended on December 29, 2018, with the amendments coming into effect on the same day, employers in the PRC shall provide their employees
with welfare schemes covering basic pension insurance, basic medical insurance, unemployment insurance, maternity insurance, and occupational
injury insurance. Without force majeure reasons, employers must not suspend or reduce their payment of social insurance for employees,
otherwise, competent governmental authorities will have the power to enforce employers to pay up social insurance within a prescribed
time limit, and a fine of 0.05% of the unpaid social insurance will be charged on the part of the employers per day commencing from the
first day of default. Provided that the employers still fail to make the payment within the prescribed time limit, a fine of over one
time and up to three times of the unpaid sum of social insurance will be charged.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with the <i>Regulations on Management
of Housing Provident Fund</i>, which were promulgated by the State Council on April 3, 1999 and last amended on March 24, 2019, employers
must register at the designated administrative centers and open bank accounts for depositing employees&#8217; housing funds. Employer
and employee are also required to pay and deposit housing funds, with an amount no less than 5% of the monthly average salary of the employee
in the preceding year in full and on time. Employers must not suspend or reduce the payment of house provident funds for their employees.
Under the circumstances where financial difficulties do exist due to which an employer is unable to pay or pay up house provident funds,
permission of labor union of the employer and approval of the local house provident funds commission must first be obtained before the
employer can suspend or reduce their payment of house provident funds. Where an employer does not open accounts of house provident funds
for its employees, the relevant authorities will have the power to demand such employer to do so within a prescribed period, failure of
which can result in a fine of over RMB 10,000 (approximately $1,500) and up to RMB 50,000 (approximately $7,000) charged on the employer.
Moreover, under the cases where competent authorities have given notice to the employer for paying up house provident funds but the employer
still fails to do so, an application for enforcement can be filed to the court in this regard.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>PRC Laws and Regulations Related to internet information security
and privacy protection</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>The PRC Civil Code</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 28, 2020, the National People&#8217;s Congress
of the PRC issued the PRC Civil Code, which became effective on January 1, 2021. The PRC Civil Code stipulates that the personal information
of a natural person shall be protected by the law. Any organization or individual shall legally obtain the personal information of others
when necessary and ensure the safety of such personal information, and shall not illegally collect, use, process or transmit the personal
information of others, or illegally buy or sell, provide or make public the personal information of others.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Cybersecurity Law of the PRC</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 7, 2016, the Standing Committee of
the National People&#8217;s Congress of the PRC (the &#8220;SCNPC&#8221;) promulgated the Cybersecurity Law of the PRC (&#8220;Cybersecurity
Law&#8221;) which became effective on June 1, 2017. Under this law, network operators must provide cybersecurity protection and protect
the integrity, confidentiality and availability of network data. The Cybersecurity Law also standardizes the collection and usage of personal
information and requires network operators to protect users&#8217; privacy security. If a network operator violates the Cybersecurity
Law, it can face various penalties, including but not limited to warning, confiscation of illegal earnings, suspension of related business
for rectification, shutting down its websites, and revocation of its business license or relevant permits, all of which may be imposed
by the relevant authority, along with fines of up to RMB 1 million (approximately $146,000) depending on the severity of the circumstances.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 15, 2022, Cybersecurity Review Measures
published by Cyberspace Administration of China or the CAC, National Development and Reform Commission, Ministry of Industry and Information
Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People&#8217;s Bank of
China, State Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and State Cryptography
Administration became effective, which provides that, Critical Information Infrastructure Operators (&#8220;CIIOs&#8221;) that intend
to purchase internet products and services and Online Platform Operators engaging in data processing activities that affect or may affect
national security shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published
the Administration Measures for Cyber Data Security (Draft for Public Comments), or the &#8220;Cyber Data Security Measure (Draft)&#8221;,
which requires cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity
review with the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and
Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic
company that seeks to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations,
enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives
administration system, and take necessary measures to fulfill confidentiality and archives administration obligations.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Measures for the Security Assessment of Data
Cross-border Transfer</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 7, 2022, CAC promulgated the Measures
for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply
for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers
important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information
of over 1 million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas
and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people
to overseas since January 1st&#160;of the previous year and ; and (iv) other circumstances under which the data cross-border transfer
security assessment is required as prescribed by the CAC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Personal Information Protection Law of the PRC</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 20, 2021, the SCNPC promulgated the
Personal Information Protection Law of the People&#8217;s Republic of China (the &#8220;Personal Information Protection Law&#8221;), effective
from November 1, 2021. The Personal Information Protection Law requires, among others, that (i) the processing of personal information
should have a clear and reasonable purpose which should be directly related to the processing purpose, in a method that has the least
impact on personal rights and interests, and (ii) the collection of personal information should be limited to the minimum scope necessary
to achieve the processing purpose to avoid the excessive collection of personal information. Different types of personal information and
personal information processing will be subject to various rules on consent, transfer, and security. Entities handling personal information
bear responsibilities for their personal information handling activities, and shall adopt necessary measures to safeguard the security
of the personal information they handle. Otherwise, the entities handling personal information could be ordered to correct, or suspend
or terminate the provision of services, and face confiscation of illegal income, fines or other penalties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><span style="text-decoration:underline">Hong Kong Regulations</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As we provide a trading service business in Hong
Kong, our business operations are subject to various regulations and rules promulgated by the Hong Kong government. The following is a
brief summary of the Hong Kong laws and regulations that currently and materially affect our business. This section does not purport to
be a comprehensive summary of all present and proposed regulations and legislation relating to the industries in which we operate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Hong Kong Laws and Regulations relating to Protection of Personal
Data</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Personal Data (Privacy) Ordinance</i> (Chapter
486 of the Laws of Hong Kong) (&#8220;PDPO&#8221;), which came into full effect in Hong Kong in 1996 aims to protect the privacy of individuals
of their personal data. The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles
(the &#8220;Data Protection Principles&#8221;) contained in Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an
act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice, as the case may be, is required
or permitted under the PDPO. The six Data Protection Principles are:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Principle 1 &#8212; purpose
and manner of collection of personal data;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Principle 2 &#8212; accuracy
and duration of retention of personal data;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Principle 3 &#8212; use of personal
data;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Principle 4 &#8212; security
of personal data;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Principle 5 &#8212; information
to be generally available; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Principle 6 &#8212; access to
personal data.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Non-compliance&#160;with a Data Protection Principle
may lead to a complaint to the Privacy Commissioner for Personal Data (the &#8220;Privacy Commissioner&#8221;). The Privacy Commissioner
may serve an enforcement notice to direct the data user to remedy the contravention. A data user who contravenes an enforcement notice
commits an offence which may lead to a fine and imprisonment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PDPO also gives data subjects certain rights,&#160;inter
alia:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the right to be informed by
a data user whether the data user holds personal data of which the individual is the data subject;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">if the data user holds such
data, to be supplied with a copy of such data; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the right to request correction
of any data they consider to be inaccurate.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PDPO criminalizes, including but not limited
to, the misuse or inappropriate use of personal data in direct marketing activities,&#160;non-compliance&#160;with a data access request
and the unauthorized disclosure of personal data obtained without the relevant data user&#8217;s consent.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Hong Kong Laws and Regulations relating to Trade Description</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Trade Descriptions Ordinance</i> (Chapter 362
of the Laws of Hong Kong) (&#8220;TDO&#8221;), which came into full effect in Hong Kong on April 1, 1981 aims to prohibit false or misleading
trade descriptions and statements to goods and services provided to the customers during or after a commercial transaction. Pursuant to
the TDO, any person in the course of any trade or business applies a false trade description to any goods or supply or offers to supply
them commits an offence and a person also commits the same offence if he/she is in possession for sale or for any purpose of trade or
manufacture of any goods with a false description. The TDO also provides that traders may commit an offence if they engage in a commercial
practice that has a misleading omission of material information of the goods, an aggressive commercial practice, involves bait advertising,
bait and switch or wrong acceptance of payment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Hong Kong Laws and Regulations relating to
Sales of Goods</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to <i>Sale of Goods Ordinance </i>(Chapter
26 of the Laws of Hong Kong) (&#8220;SOGO&#8221;), which came into full effect in Hong Kong on August 1, 1896, in every contract of sale,
there is an implied warranty&#160;that the goods&#160;are free, and will remain free until the time when the property&#160;is to pass,
from any charge or encumbrance not disclosed or known to the buyer before the contract is made and that the buyer&#160;will enjoy quiet
possession of the goods&#160;except so far as it may be disturbed by the owner or other person entitled to the benefit of any charge or
encumbrance so disclosed or known. The SOGO provides that there is an implied condition that the goods&#160;shall correspond with the
description where there is a contract for the sale&#160;of goods&#160;by description, and there is any implied condition or warranty&#160;as
to the quality or fitness for any particular purpose of goods&#160;supplied under a contract of sale.&#160;Where the seller&#160;sells
goods&#160;in the course of a business, there is an implied condition that the goods&#160;supplied under the contract are of merchantable
quality.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Hong Kong Laws and Regulations relating to
Supply of Services</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to <i>Supply of Services (Implied Terms)
Ordinance </i>(Chapter 457 of the Laws of Hong Kong) (&#8220;SSITO&#8221;), which came into full effect in Hong Kong on October 21, 1994,
in a contact for the supply of a service&#160;where the supplier is acting in the course of a business, there is an implied term that
the supplier will carry out the service with reasonable care and skill. The SSITO provides that where, under a contract for the supply
of a service&#160;by a supplier acting in the course of a business, the time for the service to be carried out is not fixed by the contract,
is not left to be fixed in a manner agreed by the contract or is not determined by the course of dealing between the parties, there is
an implied term that the supplier will carry out the service within a reasonable time.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Hong Kong Laws and Regulations relating to
Exemption Clauses in a Contract</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Control of Exemption Clauses Ordinance</i>
(Chapter 71 of the Laws of Hong Kong) (&#8220;CECO&#8221;), which came into full effect in Hong Kong on December 1, 1990 aims to limit
the scope where the seller may limit its liability via the terms of the contracts. The CECO provides that unless the concerned terms satisfy
the test of reasonableness, a person dealing as consumer cannot by reference to any contract term be made to indemnify another person
(whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence&#160;or breach of contract.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Hong Kong Laws and Regulations relating to
Obscene and Indecent Article</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to <i>Control of Obscene and Indecent
Articles Ordinance </i>(Chapter 390 of the Laws of Hong Kong) (&#8220;COIAO&#8221;), which came into full effect in Hong Kong on September
1, 1987, any person who publishes, possesses for the purpose of publication or imports for the purpose of the publication, any obscene
article, whether or not he knows that it is an obscene article, may commit an offence and may be liable for a fine and imprisonment. The
COIAO provides that it may be an offence to publish any indecent article without sealing such articles in wrappers and displaying a notice
as prescribed by the COIAO. It may also be an offence to publish any indecent article to a person under 18, whether or not it is known
that it is an indecent article or that such person is under 18.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Hong Kong Laws and Regulations relating to
Copyright</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Copyright Ordinance </i>(Chapter 528 of the
Laws of Hong Kong) (&#8220;Copyright Ordinance&#8221;), which came into full effect in Hong Kong on July 13, 2001 provides comprehensive
protection for recognized categories of work including artistic work. The Copyright Ordinance restricts certain acts such as copying and/or
issuing or making available copies to the public of a copyright work without the authorization from the copyright owner as it may constitute
primary infringement. The Copyright Ordinance provides that a person may also incur liability for secondary infringement if that person
possesses, sells, distributes or deals with a copy of a work which is, and which he knows or has reason to believe to be, an infringing
copy of work for the purposes of or in the course of any trade or business without the consent of the copyright owner.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Hong Kong Laws and Regulations relating to
Competition</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Competition Ordinance</i> (Chapter 619 of the
Laws of Hong Kong) (&#8220;Competition Ordinance&#8221;), which came into full effect in Hong Kong on December 14, 2015 prohibits and
deters undertakings in all sectors from adopting anti-competitive conduct which has the object or effect of preventing, restricting or
distorting competition in Hong Kong. The key prohibitions include (i)&#160;prohibition of agreements between businesses which have the
object or effect of preventing, restricting or distorting competition in Hong Kong; and (ii)&#160;prohibiting companies with a substantial
degree of market power from abusing their power by engaging in conduct that has the object or effect of preventing, restricting or distorting
competition in Hong Kong. The penalties for breaches of the Competition Ordinance include, but are not limited to, financial penalties
of up to 10% of the total gross revenues obtained in Hong Kong for each year of infringement, up to a maximum of three years in which
the contravention occurs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Hong Kong Laws and Regulations relating to
Employment</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to <i>Employment Ordinance </i>(Chapter
57 of the Laws of Hong Kong) (&#8220;EO&#8221;), which came into full effect in Hong Kong on September 27, 1968, all employees covered
by the EO are entitled to basic protection under the EO including but not limited to payment of wages, restrictions on wages deductions
and the granting of statutory holidays.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to <i>Mandatory Provident Fund Schemes
Ordinance</i> (Chapter 485 of the Laws of Hong Kong) (&#8220;MPFSO&#8221;), which came into full effect in Hong Kong on December 1, 2000,
every employer must take all practicable steps to ensure that the employee becomes a member of a Mandatory Provident Fund (MPF) scheme.
An employer who fails to comply with such a requirement may face a fine and imprisonment. The MPFSO provides that an employer&#160;who
is employing a relevant employee&#160;must, for each contribution period, from the employer&#8217;s own funds, contribute to the relevant
MPF scheme&#160;the amount determined in accordance with the MPFSO.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to <i>Employees&#8217; Compensation Ordinance</i>
(Chapter 282 of the Laws of Hong Kong) (&#8220;ECO&#8221;), which came into full effect in Hong Kong on December 1, 1953, all employers
are required to take out insurance policies to cover their liabilities under the ECO and at common law for injuries at work in respect
of all of their employees. An employer failing to do so may be liable to a fine and imprisonment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><!-- Field: Page; Sequence: 69; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>C. Organizational structure</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Below is the Company&#8217;s corporate structure chart as of the date
of this report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b><img alt="" src="image_003.jpg"/>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Variable Interest Entity Arrangements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In establishing our business, we have used a variable
interest entity, or VIE, structure. In the PRC, investment activities by foreign investors are principally governed by the NDRC and the
MOFCOM which promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition) (the &#8220;2021
National Negative List&#8221;) and the Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade
Zones (2021 Edition) (the &#8220;2021 FTZ Negative List&#8221;) (collectively the &#8220;2021 Negative Lists&#8221;) on December 27, 2021,
which took effect on January 1, 2022. Industries listed in the 2021 Negative Lists are divided into two categories: restricted and prohibited.
Industries not listed in the 2021 Negative Lists are generally deemed as constituting a third &#8220;permitted&#8221; category.&#160;.
Our Company and the WFOE are considered as foreign investors or foreign invested enterprises under PRC law.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->65<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Though the business we conduct through the variable
interest entity is not within the category in which foreign investment is currently restricted or prohibited under the Negative List or
other PRC Laws, we expect that in the future Jiangsu Yanggu will engage in marketing survey services for online marketplaces. Marketing
survey services are within the category in which foreign investment is restricted pursuant to the Negative List. In addition, we intend
to centralize our management and operation in the PRC to avoid being restricted in conducting certain business activities which are important
for our current or future business but are currently restricted or might be restricted in the future. As such, we believe the agreements
between the WFOE and the variable interest entity are necessary and essential for our business operation without the equity ownership
of the VIE. These contractual arrangements with the variable interest entity and its shareholders enable us to exercise effective control
over the variable interest entity and hence consolidate the financial results of the VIE and its wholly owned subsidiaries without being
deemed as a foreign invested company.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In our case, the WFOE effectively assumed management
of the business activities of the variable interest entity through a series of agreements which are referred to as the VIE Agreements.
The VIE Agreements are comprised of a series of agreements, including a Technical Consultation and Service Agreement, an Equity Pledge
Agreement, an Equity Option Agreement, and a Voting Rights Proxy and Financial Supporting Agreement. Through the VIE Agreements, the WFOE
has the right to advise, consult, manage and operate the variable interest entity for an annual consulting service fee in the amount of
100% of the variable interest entity&#8217;s net profit as determined under PRC accounting standards. The shareholders of the variable
interest entity have pledged all of their rights, title and equity interest in the variable interest entity as security for the WFOE to
collect consulting services fees provided to the variable interest entity through the Equity Pledge Agreement. In order to further reinforce
the WFOE&#8217;s right to control and operate the variable interest entity, the variable interest entity&#8217;s shareholders have granted
the WFOE an exclusive right and option to acquire all of their equity interests in the variable interest entity through the Equity Option
Agreement.&#160;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The material terms of the VIE Agreements with
Jiangsu Yanggu and its shareholders are as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Technical Consultation and Service Agreement.</span>&#8195;Pursuant
to the Technical Consultation and Service Agreement between the WFOE and Jiangsu Yanggu dated May 8, 2019, the WFOE has the exclusive
right to provide consultation and services to Jiangsu Yanggu in the areas of management, human resources, technology and intellectual
property rights. For such services, Jiangsu Yanggu agrees to pay service fees in the amount of 100% of its net income and the WFOE has
the obligation to absorb 100% of Jiangsu Yanggu&#8217;s losses. The WFOE exclusively owns any intellectual property rights arising from
the performance of this Technical Consultation and Service Agreement. The amount of service fees and the payment term can be amended by
the WFOE with consultation with Jiangsu Yanggu for implementation. The term of the Technical Consultation and Service Agreement is 20
years. The WFOE may terminate this agreement at any time by giving 30 days&#8217; written notice to Jiangsu Yanggu.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Equity Pledge Agreement</span>.&#8195;Pursuant
to the Equity Pledge Agreement among the WFOE, Jiangsu Yanggu and Jiangsu Yanggu&#8217;s shareholders dated May 8, 2019, amended on January
28, 2021 (collectively, the &#8220;Pledge&#8221;), each of Jiangsu Yanggu&#8217;s shareholders pledged all of their equity interests in
Jiangsu Yanggu to the WFOE to guarantee Jiangsu Yanggu&#8217;s performance of relevant obligations and indebtedness under the Technical
Consultation and Service Agreement and other control agreements (collectively, the &#8220;Control Agreement&#8221;). If Jiangsu Yanggu
breaches its obligations under the Control Agreement, the WFOE, as pledgee, will be entitled to certain rights, including the right to
dispose of the pledged equity interests in order to recover the damages associated with such breaches. The Pledge shall be continuously
valid until all of Jiangsu Yanggu&#8217;s shareholders are no longer shareholders of Jiangsu Yanggu, or until the satisfaction of all
Jiangsu Yanggu&#8217;s obligations under the Control Agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Equity Option Agreement.</span>&#8195;Pursuant
to the Equity Option Agreement among the WFOE, Jiangsu Yanggu and Jiangsu Yanggu&#8217;s shareholders dated May 8, 2019, amended on January
28, 2021, WFOE has the exclusive right to require that Jiangsu Yanggu&#8217;s shareholders fulfill and complete all approval and registration
procedures required under PRC laws for the WFOE to purchase, or designate one or more persons to purchase, such shareholders&#8217; equity
interests in Jiangsu Yanggu, in one or multiple transactions, at any time or from time to time, at the WFOE&#8217;s sole and absolute
discretion. The purchase price shall be the lowest price allowed by PRC laws. The Equity Option Agreements shall remain effective until
all of the equity interests owned by Jiangsu Yanggu&#8217;s shareholders have been legally transferred to the WFOE or its designee(s).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Voting Rights Proxy and Financial Supporting
Agreements.</span>&#8195;Pursuant to the Voting Rights Proxy and Financial Supporting Agreement among the WFOE, Jiangsu Yanggu and Jiangsu
Yanggu&#8217;s shareholders dated May 8, 2019, amended on January 28, 2021, Jiangsu Yanggu&#8217;s shareholders irrevocably appointed
the WFOE or the WFOE&#8217;s designee to exercise all of his or her rights as a shareholder of Jiangsu Yanggu under the Articles of Association
of Jiangsu Yanggu, including but not limited to the power to exercise all such shareholder&#8217;s voting rights with respect to all matters
to be discussed and voted in Jiangsu Yanggu shareholder meetings. The term of the Voting Rights Proxy and Financial Supporting Agreements
is 20 years.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>D. Property, Plants and Equipment</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
principal executive offices are located in Hong Kong where we lease approximately 51 square meters of office space. We also lease approximately
2,500 square meters of office space in China. Our leased premises are leased from unrelated third parties and related parties who either
have valid title to the relevant properties or proper authorization from the title holder to sublease the property. On November 4, 2021,
Kashi Dongfang and Kashi Longrui, the wholly owned subsidiaries of Jiangsu Yanggu, jointly entered into an agreement acquired an office
building from Nanjing Z-COM Wireless Communication Technology Co., Ltd. for a total amount of RMB60 million (approximately $9.2 million).
The office building is located at Building 30, #699-22, Xuanwu Avenue, Xuanwu District, Nanjing City, Jiangsu Province, which is approximately
6,840 square meters. The land use rights for the land occupied by the building was acquired by means of purchase and remains valid until
December 20, 2056. The Company is decorating the building and expects to complete by the end of August 2023, which will be used as our
office space in China</span><span style="font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif">.</span></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that we will have adequate facilities
to accommodate our future expansion plans. Currently, we lease the following properties to conduct our business:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid; padding-left: 0.125in; text-indent: -0.125in; white-space: nowrap; width: 44%"><span style="font-size: 10pt"><b>Property</b></span></td>
    <td style="white-space: nowrap; width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 11%; text-align: center"><span style="font-size: 10pt"><b>Lessee</b></span></td>
    <td style="white-space: nowrap; width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 19%; text-align: center"><span style="font-size: 10pt"><b>Annual Rent</b></span></td>
    <td style="white-space: nowrap; width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 11%; text-align: center"><span style="font-size: 10pt"><b>Termination<br/>
 Date</b></span></td>
    <td style="white-space: nowrap; width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 11%; text-align: center"><span style="font-size: 10pt"><b>Purposes/Use</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: justify"><span style="font-size: 10pt">No. 2, Youzishan Road, Dongba Street, Gaochun District</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">Jiangsu Yanggu</span></td>
    <td style="text-align: center">&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">Rent free due to preferential treatment by local government for registered enterprises</span></td>
    <td style="text-align: center">&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">November 1, 2029</span></td>
    <td style="text-align: center">&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">Office</span></td></tr>
  <tr>
    <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: bottom; text-align: justify"><span style="font-size: 10pt">Room 501, 14<sup>th</sup> Floor, Shannxi Building, Kashi Avenue, Kashi, Xinjiang, China</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">Kashi Longrui</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">RMB 25,000 (approximately $3,572)</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">June 30, 2023</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">Office</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: bottom; text-align: justify"><span style="font-size: 10pt">4th Floor, Block F4, Zi Dong International Creative Park, No 1 Zidong Road, Qixia District, Nanjing, Jiangsu, China</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">Kashi Longrui</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">RMB 1,080,000 (approximately $154,285)</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">December 31, 2023</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">Office</span></td></tr>
  <tr>
    <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: bottom; text-align: justify"><span style="font-size: 10pt">Room 1402, Richmake Commercial Building, 198-200 Queen&#8217;s Road Central, Hong Kong</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">International Exchange</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">HK$211,920 (approximately $27,344)</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">July 15, 2024</span></td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">Office</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><div><a id="a_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 4A. UNRESOLVED STAFF COMMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -70pt"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><div><a id="a_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;<i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i>You should read the
following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial
statements and the related notes included elsewhere in this annual report on Form&#160;20-F.&#160;This discussion may contain forward-looking
statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those set forth under &#8220;Item 3. Key Information&#8212;D.
Risk Factors&#8221; or in other parts of this annual report on Form&#160;20-F.</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>5A. Operating Results</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Overview </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are an online provider of collectibles and
artwork e-commerce services, which allow collectors, artists and art dealers and owners to access a much bigger collectable and art trading
market where they can engage with a wider range of collectibles and artwork investors than they could likely encounter without our platforms.
We currently facilitate trading by individual and institutional customers of all kinds of collectibles and artwork and certain commodities
on our leading online platforms owned by our subsidiaries in Hong Kong, namely the China International Assets and Equity of Artworks Exchange
Limited and HKDAEx Limited. We commenced our operations in March 2018 and our customer trading volume has been growing rapidly since then.
We also provide online and offline integrated marketing, storage and technical maintenance services to our customers in China.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the report of &#8220;E-commerce in
China 2021&#8221; released by Ministry of Commerce of People&#8217;s Republic of China on November 16, 2022, China&#8217;s e-commerce
continued to grow in 2021. Data of National Bureau of Statistics of China indicates that in 2021, the national e-commerce transaction
volume reached RMB 42.3 trillion (approximately $6.13 trillion), an increase of 19.6% year-on-year.&#160;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On many mainstream e-commerce platforms, sales
of cultural products such as arts and crafts have flourished and developed rapidly, and art and collectibles related e-commerce business
is gradually growing. Online trading has become a major trend of the global art and collectibles trade. As a comprehensive service provider
with rich cultural and art collection and collectibles market operations and marketing experience, we seize current development opportunities
and provide online and offline supporting services for domestic and international art and collectibles e-commerce business. We plan to
build a complete art and collectibles business e-commerce service chain to serve the industry.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide customers of our online platform with
comprehensive services, including account opening, art investment education, market information, research, real-time customer support,
and artwork and collectibles warehousing services. Most services are delivered online through our proprietary client software and call
center. Our client software provides not only market information and analysis, but also interactive functions including live discussion
boards and instant messaging with customer service representatives, which we believe enhances our customers&#8217; engagement. Internally,
we legally collect and analyze customer behavior and communications data from our client software, customer relationship management system
and the exchanges, which allow us to better understand, attract and serve our customers.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide industry solutions and related software
products, system development and technical support services for our cooperation with e-commerce platform customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We strive to minimize conflicts of interest with
our customers, which we believe is essential for our long-term success. Under the trading rules of the two exchange platforms we operate
on, we do not set, quote or influence the trading prices, and cannot access our customers&#8217; money.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Impact of COVID-19</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Beginning in late 2019, there was an outbreak
of COVID-19 (coronavirus) which spread quickly across many parts of China, the U.S. and worldwide. In March 2020, the World Health Organization
declared the COVID-19 as a pandemic. Although the COVID-19 has mostly under control worldwide, the outbreak of the <span>Omicron
variant</span> has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in many parts
of China for in 2022. Our business and results of operations have been affected due to office closures and disruption in logistics in
various parts of China.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">China started easing the strict lockdown procedures
in early December 2022, which has led to surge in COVID infections and disrupt our business operations in December 2022 and January 2023.
Any future impact of COVID-19 on our operation results will depend on, to a large extent, future developments and new information that
may emerge regarding the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain COVID-19
or treat its impact, almost all of which are beyond our control.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Impact of investigation from our related party</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 1, 2022, Mr. Huajun Gao and Mr. Aiming
Kong, each an 11.5% shareholder of Oriental Culture Holding LTD (the &#8220;Company&#8221;), were detained by Nan County Public Safety
Bureau of Yiyang City, Hunan Province, China. On July 26, 2022, Nan County People&#8217;s Procuratorate approved the arrest of Mr. Gao
and Mr. Kong with charge of illegal business operation of Nanjing Jinwang Art Purchase E-commerce Co., Ltd., a company controlled by Mr.
Gao and Mr. Kong (&#8220;Nanjing Jinwang&#8221;). On July 1, 2022, the bank accounts of Nanjing Jinwang were frozen by Nan County Public
Safety Bureau, including a trust account into which the customers of the Company deposit their security deposits in order to trade on
the Company&#8217;s two online trading platforms which the Company has entrusted Nanjing Jinwang for escrow.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Also, on July 1, 2022, Nan County Public Safety
Bureau froze certain bank accounts of Kashi Longrui Business Management Services Co., Ltd. (&#8220;Kashi Longrui&#8221;), Kashi Dongfang
Cangpin Culture Development Co., Ltd. (&#8220;Kashi Dongfang&#8221;) and Nanjing Yanyu Information Technology Co., Ltd. (&#8220;Nanjing
Yanyu&#8221;), all subsidiaries of Jiangsu Yanggu Culture Development Co., Ltd., the variable interest entity of the Company in China
because they, each had business relationship with Nanjing Jinwang.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Neither the Company nor its VIE or subsidiaries of its VIE has received
any notification for enforcement charges from Nan County Public Safety Bureau, other than cash and short term investment in the frozen
bank accounts with balances totaling approximately $16.5 million and due from Nangjng Jinwang of approximately $3.4 million relating to
the Nanjing Jinwang investigation as described above as of December 31, 2022. Currently the customers can freely transfer their deposits
and make their withdrawals based on their actual needs. Mr. Gao and Mr. Kong are not officers, directors or employees of the Company,
its VIE or subsidiaries of the VIE.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Due to the investigation of Nanjing Jinwang and
frozen bank accounts, the business operations of the Company have been materially and negatively impacted as its customers experienced
difficulties withdrawing their security deposits through online banking and have concerns regarding their deposited funds. The Company
has taken remedial measures to assist its customers in withdrawing security deposits, such as through manual and in person application
with the bank to transfer funds, so that they will have confidence in the Company and continue to list and trade art and collectible products
on the online platforms of the Company. However, there can be no assurance that these measures will restore customer confidence in using
the Company&#8217;s services efficiently or at all.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">The investigation of Mr. Gao, Mr. Kong and Nanjing Jinwang is
ongoing. The Company&#160;has and will continue&#160;to communicate with Nan County Public Safety Bureau and other government authorities
to obtain more information regarding the investigation and to attempt to unfreeze the bank accounts for the subsidiaries of the VIE. The
Company will monitor the development of the investigation and will provide additional information concerning its impact on the Company&#8217;s
business in due course.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This investigation from our related party as well
as the outbreak of Omicron variant in China had negative impact on our revenue and net income for the year ended December 31, 2022. Our
revenue decreased approximately $19.8 million from approximately $37.6 million for the year ended December 31, 2021 to approximately $17.8
million for the same period of 2022 and our net income decreased approximately $8.2 million from approximately $11.4 million for the year
ended December 31, 2021 to approximately $3.2 million for the same period of 2022.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Key Factors Affecting Our Results</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe the key factors affecting our financial
condition and results of operations include the following:&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Number of Active Traders</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our results of operations are dependent on the
number of active traders using our platform. Active traders is defined as the total number of individuals who placed trades and traded
collectibles, artwork and commodities on our platforms during the relevant period. We had approximately 142,000, 159,000 and 77,000 traders
that participated in trading collectibles, artwork and commodities on our platforms for the years ended December 31, 2022, 2021 and 2020,
respectively. The number of traders in 2020 was affected by outbreak of COVID-19 while in 2021 the number of traders increased by 106%
as most of COVID-19 in PRC were under control in 2021. In 2022, due to outbreak of Omicron variant and impact of frozen bank accounts
caused by the investigation of our related party, number of traders decreased by 11%.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Number of Transactions</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the years ended December 31, 2022, 2021
and 2020, our platforms facilitated and completed approximately 96 million, 135 million and 48 million transactions, respectively. The
change in the number of transactions was due to the change in the number of active traders and trading activities due to reason mentioned
above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Transaction Value</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Transaction value is defined as the dollar amount
of the purchase and sale of the ownership units of the collectibles, artwork and commodities after they are listed on our platforms.
During the years ended December 31, 2022, 2021 and 2020, total transaction value amounted to approximately $8.6 billion, $15.6 billion
and $4.6 billion, respectively. The change in total transaction value was due to the change in number of products listed and number of
transactions for the year ended December 31, 2022, 2021 and 2020. The numbers of new collectibles/artwork and commodities that were successfully
listed on our platforms decreased from 199 for the year ended December 31, 2021 to 31 for the year ended December 31, 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Average Transaction Value Per Trader</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Average
transaction value per trader is calculated by dividing the total number of active traders from total transaction value during the relevant
period. During the years ended December 31, 2022, 2021 and 2020, our average transaction value per client was approximately $0.06 million,
$0.1 million and $0.06 million, respectively. The decrease of average transaction value is due to decrease in transaction value as stated
above.</span>&#160;&#160;<span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Results of Operations </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The tables in the following discussion summarize
our consolidated statements of income and comprehensive income for the periods indicated. This information should be read together with
our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period
are not necessarily of the results that may be expected for any future period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Years Ended December 31, 2022 vs. December 31, 2021</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; white-space: nowrap; text-align: center">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">For the Years Ended<br/> December 31,</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Variance</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(19,716,489</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">(52.8</td><td style="width: 1%; text-align: left">)%</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Revenues:</span></i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth the principal components
of our net revenues by amounts and percentages of our net revenues for the periods indicated:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,813,139</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">100.0</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">37,596,460</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">100.0</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(19,783,321</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">(52.6</td><td style="padding-bottom: 4pt; text-align: left">)%</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">Including $166,325 and $233,157
from related parties for the years ended December 31, 2022 and 2021, respectively.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(1)</i></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Listing
service fees</i>: Our performance obligation is to provide listings on our platform. Listing service fees are calculated based on a percentage
of the listing value of collectibles, artwork and commodities. Listing value is the total offering price of the collectible, artwork
and commodities when the ownership of the units are initially listed on our trading platforms. We utilize an appraised value as a basis
to determine the appropriate listing value for each collectible, artwork or commodities, or portfolio of collectibles, artwork or commodities.
We recognize the related revenue upon our completion of our performance obligation to the customer and its item is successfully listed
for trading on our platforms. Our standard listing fees for artwork and collectibles range from 3% to 8% and 2.3% to 10.0% for each of
the years ended December 31, 2022 and 2021 and standard listing fees for commodities was 3% to 8% and 1% to 6% of the initial listing
value for each of 2022 and 2021. The rate is dependent on the type of listings and is negotiated on a case by case basis. In 2022, we
also had listing for silver coins, which the listing price is charged on per coin basis instead of a percentage of listing value. The
average listing period is approximately three months.</span></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total listing service fees decreased by approximately
$5.7 million or 82.0% from approximately $6.9 million for the year ended December 31, 2021 to approximately $1.2 million for the same
period in 2022. Our listing service fees are calculated based on a percentage of the listing value of collectibles, artwork and commodities
of new products. During the years ended December 31, 2022 and 2021, total listing value of listed artwork, collectibles and commodities
amounted to approximately $0.4 billion and $1.0 billion, respectively. In addition, there were less listing values generated by new products
listings with approximately $44.9 million and $58.3 million for 2022 and 2021, respectively. The numbers of new collectibles/artwork
and commodities that were successfully listed on our platforms decreased from 199 for the year ended December 31, 2021 to 31 for the
year ended December 31, 2022. The decrease in our listings was mainly due to impact from outbreak of COVID Omicron variant in 2022 and
the freeze of bank accounts caused by the investigation of our related party in second half of 2022 which reduced overall customers listing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>(2) Transaction fee revenue</i>: Transaction
fee revenue is generally calculated based on the transaction value of collectibles, artwork or commodities per transaction for our services
to facilitate the trading transactions. Transaction value is the dollar amount of the purchase and sale of the collectibles, artwork or
commodities after it is listed on our platform. We typically charge from 0.15% to 0.3% of the transaction value per transaction from both
the purchase and sale side of the transaction resulting in an aggregate of 0.3% to 0.6% of total transaction value. Sometimes, we charge
a predetermined transaction rate, which is negotiated on a case by case basis, for selected traders with specific large transactions.
Transaction fee revenue also includes predetermined monthly transaction fees, which are negotiated on a case by case basis for selected
traders with high trading volume, and is recognized and earned over the specified service period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2018, the Company started a customer reward
points program, pursuant to which reward points were issued for opening a new account or referring customers to open accounts with us
during our promotion period. In that regard, customers are required to redeem certain reward points for new listings in addition to the
regular listing services fees. If a customer does not own any reward points, he/she can purchase them from other customers on our platform.
We do not record revenue when customers redeem any points as it is considered as a prerequisite for a new listing in addition to the regular
services fees. The points are traded by and among our customers on the platform and we charge a transaction fee from such points trading.
Transaction fee revenue from the trading of points amounted to approximately $1.1 million and $3.4 million for the years ended December
31, 2022 and 2021, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total transaction fee revenue decreased by approximately
$10.9 million or 44.2% from approximately $24.5 million for the year ended December 31, 2021 to approximately $13.6 million for the same
period in 2022. The decrease was due to the decrease in total transaction value. Transaction fee revenue is calculated based on a certain
percentage of the transaction value per transaction. Our total transaction value decreased from approximately US$15.6 billion the year
ended December 31, 2021 to approximately $8.6 billion for the same period in 2022. The decrease in our transaction was mainly due to impact
from resurgence of COVID variant in the first half of 2022 and freeze of bank accounts caused by the investigation of our related party
in second half of 2022 which reduced overall customers transactions.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>(3) Marketing service fees</i>: Marketing service
fees is what we charge for promoting and marketing our customers&#8217; collectible or artwork. The services include assisting our customers
in connection with his/her listing and trading of his/her collectible/artwork on our platform, which mainly includes consulting and supporting
services of the marketability for the collectible/artwork; assessing its market value and market acceptance for the collectible/artwork;
and assisting in the application and legal protection required for the customer&#8217;s collectible/artwork to be approved for listing
on our platform. For marketing service contracts in which the related performance obligations can be completed within a short period of
time, the Company recognizes the related revenue upon the completion of its performance obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Marketing service agreements also include providing
promotion services for customers&#8217; items as where to place ads on well-known cultural or art exchange websites in China, to provide
online and offline marketing services including cooperation with auction houses and participate in industry-related exhibitions and fairs.
The marketing service fees are charged on a negotiated fixed fee basis, which is based on the type of the listing session that the customer
applies for and whether the customer has listed and sold its collectibles on other platforms before, and they were not based on &#160;&#160;the
value of the underlying collectible, artwork and commodities. Marketing service contracts and fees are recognized upon the completion
of all performance obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>


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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Marketing service fees decreased by approximately
$3.0 million or 52.2% from approximately $5.8 million for the year ended December 31, 2021 to approximately $2.8 million for the same
period in 2022. The decrease was due to decreasing of type of artwork we promote. During the year ended December 31, 2021 and 2022, 199
and 31 types of collectibles/artwork were successfully listed on our platforms, of which we promoted 64 and 31 types of newly listed collectibles
and artwork for our customers, respectively.&#160;The overall decrease was due to decrease in listing and transactions for reasons stated
above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>(4) Other revenues</i>: Other revenues primarily
includes services fees for IT technical support and agency recommendation fees. IT technical support fees are negotiated on a case by
case basis and is recognized when the related services have been performed based on the specific terms of the contract. Agency recommendation
fees are mainly revenue generated from providing consulting and training services to certain traders/agents. Upon completion of the training
and consulting, these qualified traders/agents may introduce our platform and services to potential customers to list their collectibles
and artwork with us for a fee or promote their own products on our platform. Total other revenues decreased by $306,431 or 63.6% from
$482,137, which included $233,157 from providing technological services to our related parties for the same period in 2021 to $175,706,
which included $166,325 from providing technological services to our related parties for the same period in 2022. The decrease was primarily
because we provided less consulting and training services to traders for the year ended December 31, 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Cost of Revenues</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cost of revenues decreased by approximately $1.4
million or 58.9% from approximately $2.4 million including approximately $0.7 million from a related party for the year ended December
31, 2021 to approximately $1.0 million including approximately $0.3 million from a related party for the same period in 2022. The decrease
in cost of revenues was primarily due to the decrease in warehouse storage fees of approximately $0.4 million, decrease in verification
related fees of approximately $0.7 million. The warehouse storage fees were charged based on certain percentage of listing value of commodities,
decrease in warehouse storage fee was due to overall decrease in overall listing value of products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Gross Profit</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gross profit decreased by approximately $18.4
million or 52.2% from approximately $35.2 million for the year ended December 31, 2021 to approximately $16.8 million for the year ended
December 31, 2022. Gross margin for the years ended December 31, 2022 and 2021 were approximately 94% and approximately 94%, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Selling and Marketing Expenses </span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Selling expenses decreased by approximately $8.2
million, or 51.7%, from approximately $16.0 million including approximately $0.4 million to a related party for the year ended December
31, 2021 to approximately $7.7 million including approximately $44,000 to a related party for the same period in 2022. The decrease was
primarily due to the decrease in marketing expenses of approximately $8.4 million as we paid less commissions due to less new listings
and traders introduced by third parties. The Company has two types of reward program, one is to rebate directly to customers while the
other is to reward third party sales agents. Rebates to customers are considered as a reduction in sales price, so the rebate is instantaneous
while rebates to third party sales agents is usually paid in one to three months in arrears.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">General and Administrative
Expenses</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Our
general and administrative expenses decreased by approximately $1.8 million, or 21.8% from approximately $8.3 million including approximately
$0.2 million to a related party for the year ended December 31, 2021 to approximately $6.5 million including approximately $0.2 million
to a related party for the same period in 2022. The decrease in our general and administrative expenses was primarily due to decreased
professional fees of approximately $0.6 million, decreased consulting expenses for business development of approximately
$1.0 million, decreased travel and meeting related fees of approximately $0.3 million and decreased
office and management expenses of approximately $0.2 million, because of the controlling measures and travel restrictions taken by Chinese
government due to outbreak of COVID-19 in 2022, offset by increased depreciation and amortization expenses of approximately $0.3 million
due to new furniture and vehicle purchased </span>&#160;&#160;<span style="font-family: Times New Roman, Times, Serif">during the year
ended December 31, 2022.</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->73<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">Other Income</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total other income increased by approximately
$0.1 million, or 16.5%, from approximately $0.6 million for the year ended December 31, 2021 to approximately $0.7 million for the same
period in 2022. The increase was mainly due to the increase of approximately $0.1 million in rental income that we subleased part of our
office space to the third party. Other income also included government subsidies of approximately $240,000 to promote local business development
and a VAT refund of $61,000. As part of VAT reform in 2019, a taxpayer in certain service industries was allowed to reclaim an additional
10% of input VAT credit against the amount of VAT payable from April 1, 2019 to December 31, 2022.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">Provision for Income
Taxes</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our provision for income taxes amounted to $4,812
and nil for the year ended December 31, 2022 and 2021, respectively. We generated most of our income from the subsidiaries of our VIE
that had preferential tax treatment which are formed and registered in Kashi in Xinjiang Provence, China. We also have provided 100% allowance
on net operating losses from our VIE which incurred losses.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">Net Income</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our net income decreased by approximately $8.2
million, or 71.7%, from $11.4 million for the year ended December 31, 2021 to approximately $3.2 million for the same period in 2022.
Such change was the result of the combination of the changes as discussed above.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i><span style="text-decoration:underline">Foreign Currency Translation Adjustment</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Changes in foreign currency translation adjustment are mainly due to
the fluctuation of foreign exchange rates between RMB/HKD (the functional currency of our operating entities) and the USD dollar (reporting
currency).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>Results of Operations </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The tables in the following discussion summarize
our consolidated statements of income and comprehensive income for the periods indicated. This information should be read together with
our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period
are not necessarily of the results that may be expected for any future period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Years Ended December 31, 2021 vs. December 31, 2020</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Years Ended<br/> December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">20,484,272</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 79; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->74<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Revenues:</span></i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth the principal components
of our net revenues by amounts and percentages of our net revenues for the periods indicated:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">320</td><td style="text-align: left">%</td></tr>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">37,596,460</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">100.0</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">Including $233,157 and $213,172
from related parties for the years ended December 31, 2021 and 2020, respectively.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>(1) Listing service fees</i>: Our performance
obligation is to provide listings on our platform. Listing service fees are calculated based on a percentage of the listing value of collectibles,
artwork and commodities. Listing value is the total offering price of the collectible, artwork and commodities when the ownership units
are initially listed on our trading platform. We utilize an appraised value as a basis to determine the appropriate listing value for
each collectible , artwork or commodities, or portfolio of collectibles, artwork or commodities. We recognize the related revenue upon
our completion of our performance obligation to the customer and its item is successfully listed for trading on our platform. Our standard
listing fees for artwork and collectibles range from 2.3% to 10.0% for each of the years ended December 31, 2021 and 2020 and standard
listing fees for commodities was 1% to 6% of the initial listing value for both years. The rate is dependent on the type of listings and
is negotiated on a case by case basis. In 2021, we also had listing for silver coins, which the listing price is charged on per coin basis
instead of a percentage of listing value. The average listing period is around three months.&#160;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total listing service fees decreased by approximately
$1.5 million or 18.0% from $8,405,211 for the year ended December 31, 2020 to $6,900,561 for the same period in 2021. Our listing service
fees are calculated based on a percentage of the listing value of collectibles, artwork and commodities of new products. During the years
ended December 31, 2021 and 2020, total listing value of listed artwork, collectibles and commodities amounted to approximately $1.0 billion
and $0.8 billion, respectively, however, there were less listing value generated by new products listings with approximately $58.3 million
and $88.4 million for new products listed in 2021 and 2020, respectively. The number in new collectibles/artwork and commodities were
successfully listed on our platforms increased from 188 for the year ended December 31, 2020 to 199 for the year ended December 31, 2021.
The total number of collectibles/artwork and commodities that were listed on our platforms increased from 303 for the year ended December
31, 2020 to 494 for the year ended December 31, 2021.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>(2) Transaction fee revenue</i>: Transaction
fee revenue is generally calculated based on the transaction value of collectibles, artwork or commodities per transaction for our services
to facilitate the trading transactions. Transaction value is the dollar amount of the purchase and sale of the collectibles, artwork or
commodities after it is listed on our platform. We typically charge from 0.15% to 0.3% of the transaction value per transaction from both
the purchase and sale side of the transaction resulting in an aggregate of 0.3% to 0.6% of total transaction value. Sometimes, we charge
a predetermined transaction rate, which is negotiated on a case by case basis, for selected traders with specific large transactions.
Transaction fee revenue also includes predetermined monthly transaction fees, which are negotiated on a case by case basis for selected
traders with high trading volume, and is recognized and earned over the specified service period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2018, the Company started a customer reward
points program, pursuant to which reward points were issued for opening a new account or referring customers to open accounts with us
during our promotion period. In that regard, customers are required to redeem certain reward points for new listings in addition to the
regular listing services fees. If a customer does not own any reward points, he/she can purchase them from other customers on our platform.
We do not record revenue when customers redeem any points as it is considered as a prerequisite for a new listing in addition to the regular
services fees. The points are traded by and among our customers on the platform and we charge a transaction fee from such points trading.
Transaction fee revenue from the trading of points amounted to approximately $3.4 million and $2.6 million for the years ended December
31, 2021 and 2020, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total transaction fee revenue increased by approximately
$17.4 million or 246.0% from approximately $7.08 million for the year ended December 31, 2020 to approximately $24.5 million for the same
period in 2021. The increase was due to the increase in total transaction value. Transaction fee revenue is calculated based on a certain
percentage of the transaction value per transaction. Our total transaction value increased from approximately $4.6 billion the year ended
December 31, 2020 to approximately $15.6 billion for the same period in 2021. We have focused our effort in promoting existing products
traded on the platform by increasing our marketing expenses/activities in 2021 which resulted in increased transactions and transaction
value of our existing customers and products.<i>&#160;</i></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>(3) Marketing service fees</i>: Marketing service
fees is what we charge for promoting and marketing our customers&#8217; collectible or artwork. The services include assisting our customers
in connection with his/her listing and trading of his/her collectible/artwork on our platform, which mainly includes consulting and supporting
services of the marketability for the collectible/artwork; assessing its market value and market acceptance for the collectible/artwork;
and assisting in the application and legal protection required for the customer&#8217;s collectible/artwork to be approved for listing
on our platform. For marketing service contracts in which the related performance obligations can be completed within a short period of
time, the Company recognizes the related revenue upon the completion of its performance obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Marketing service agreements also include providing
promotion services for customers&#8217; items as where to place ads on well-known cultural or art exchange websites in China, to provide
online and offline marketing services including cooperation with auction houses and participate in industry-related exhibitions and fairs.
The marketing service fees are charged on a negotiated fixed fee basis, which is based on the type of the listing session that the customer
applies for and whether the customer has listed and sold its collectibles on other platforms before, and they were not based on &#160;&#160;the
value of the underlying collectible, artwork and commodities. Marketing service contracts and fees are recognized upon the completion
of all performance obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Marketing service fees increased by approximately
$4.4 million or 319.7% from $1,370,164 for the year ended December 31, 2020 to $5,750,901 for the same period in 2021. The increase was
due to promoting additional types of artwork. During the year ended December 31, 2020 and 2021, 188 and 199 types of collectibles/artwork
were successfully listed on our platforms, of which we promoted 24 and 64 types of newly listed collectibles and artwork for our customers,
respectively.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>(4) Other revenues</i>: Other revenues primarily
includes services fees for IT technical support and agency recommendation fees. IT technical support fees are negotiated on a case by
case basis and is recognized when the related services have been performed based on the specific terms of the contract. Agency recommendation
fees are mainly revenue generated from providing consulting and training services to certain traders/agents. Upon completion of the training
and consulting, these qualified traders/agents may introduce our platform and services to potential customers to list their collectibles
and artwork with us for a fee or promote their own products on our platform. Total other revenues decreased by approximately $106,000
or 18.0% from $588,144, which included of $213,172 from providing technological services to our related parties for the same period in
2020 to $482,137, which included of $233,157 from providing technological services to our related parties for the same period in 2021.
The decrease was primarily because we provided less consulting and training services to traders for the year ended December 31, 2021.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->76<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Cost of Revenues</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cost of revenues decreased by approximately $0.2
million or 8.2% from $2,642,163 including $1,734,761 from a related party for the year ended December 31, 2020 to $2,425,420 including
$730,007 from a related party for the same period in 2021. The decrease in cost of revenues was primarily due to the decrease in warehouse
storage fees of approximately $1.0 million offset by increase in appraisal fees and related services of approximately $0.7 million. The
warehouse storage fees were charged based on certain percentage of listing value of commodities, decrease in warehouse storage fee was
due to overall decrease in overall listing value of products, and certain new customers were transferred from other trading sites which
they were already paid their own warehouse fees before, therefore the Company did not need to pay for warehouse fees for those new traders.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Gross Profit</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gross profit increased by approximately $20.4
million or 137.7% from $14,796,639 for the year ended December 31, 2020 to $35,171,040 for the year ended December 31, 2021. Gross margin
for the years ended December 31, 2021 and 2020 were approximately 94% and approximately 85%, respectively. The increase in gross margin
was due mainly to the increased revenue and the decrease in costs in 2021 as a result of recovering from COVID-19.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Selling and Marketing Expenses </span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Selling expenses increased by approximately $9.9
million, or 165.8%, from 6,004,883 including $1,762,652 to a related party for the year ended December 31, 2020 to $15,958,450 including
$359,968 to a related party for the same period in 2021. The increase was primarily due to the increase in commission expenses of approximately
$10.2 million as our transaction fee revenue increased where we paid a percentage of transaction fees for third-party referrals of new
traders. The Company has two types of reward program, one is to rebate directly to customers while the other type is to reward the sales
agents. Rebates to customers are considered a reduction in sales price, so the rebate is instantaneous, while rebate to sales agents are
usually paid in one to three months in arrears. Our selling expenses to related party decreased by 79.6% as we reduced our advertising
activities on our related party&#8217;s website where we focus our advertising efforts on other venues. Our total other marketing expenses
were at comparable levels in 2021 compared to 2020.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">General and Administrative
Expenses</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our general and administrative expenses increased
by approximately $1.2 million, or 16.7% from $7,145,668 including $201,865 to a related party for the year ended December 31, 2020 to
$8,327,124 including $223,284 to a related party for the same period in 2021. The increase in our general and administrative expenses
was primarily due to increased compensation costs including salaries, bonuses of approximately $0.6 million, increased office, travel,
IT, training and meeting expenses of approximately $1.3 million as our business recovered from the pandemic and incurred more business
activities, offset by a decrease of approximately $0.8 million for the costs related to going public in 2020.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">Other Income</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total other income increased by approximately
$0.2 million, or 39.0%, from $402,019 for the same period in 2020 to $558,807 for the same period in 2021. The increase in other income
was primarily due to the increase in interest income and gain from short term investment of approximately $0.1 million. Other income also
included government subsidies of approximately $115,000 to promote local business development and a VAT refund of $78,000. As part of
VAT reform in 2019, a taxpayer in certain service industries was allowed to reclaim an additional 10% of input VAT credit against the
amount of VAT payable from April 1, 2019 to December 31, 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">Provision for Income
Taxes</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our provision for income taxes amounted to nil
for both years ended December 31, 2021 and 2020. We generated most of our income from the subsidiaries of our VIE that had preferential
tax treatment which are formed and registered in Kashi in Xinjiang Provence, China. We also have provided 100% allowance on net operating
losses from our VIE which incurred losses.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">Net Income</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our net income increased by approximately $9.4
million, or 458.8%, from $2.0 million for the year ended December 31, 2020 to approximately $11.4 million for the same period in 2021.
Such change was the result of the combination of the changes as discussed above.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i><span style="text-decoration:underline">Foreign Currency Translation Adjustment</span></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Changes in foreign currency translation
adjustment are mainly due to the fluctuation of foreign exchange rates between RMB/HKD (the functional currency of our operating
entities) and the USD dollar (reporting currency).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>5B. Liquidity and Capital Resources&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Liquidity and Capital Resources </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We had approximately $33.7 million of cash and
cash equivalents and short term investments, including approximately $16.5 million restricted cash and cash equivalents and short term
investments. We had approximately $38.4 million of working capital as of December 31, 2022. In assessing our liquidity, we monitor and
analyze our cash on-hand and our operating and capital expenditure commitments. To date, we have financed our operations primarily through
cash flows from operations, short-term investment, private placement and public offering.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 7, 2021, we entered into Securities
Purchase Agreements (&#8220;Agreements&#8221;) with two investors (&#8220;Investors&#8221;), pursuant to which we agreed to sell to the
Investors in private placements, 600,000 ordinary shares at a purchase price of $5.00 per share for an aggregate offering price of $3,000,000.
We received proceed of approximately $2.0 million as of December 31, 2021 for 400,000 shares and received remaining $1.0 million for the
200,000 shares in January 2022. We believe that our current working capital is sufficient to support our operations for the next twelve
months. We may, however, need additional cash resources in the future if we experience changes in business conditions or other developments,
or if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions. If we determine that
our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt
securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All of our revenue is denominated in RMB.
Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest
payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval
as long as certain routine procedural requirements are fulfilled. Therefore, our PRC subsidiary is allowed to pay dividends in
foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, current PRC
regulations permit our PRC subsidiary to pay dividends to us only out of their accumulated profits, if any, determined in accordance
with PRC accounting standards and regulations. Our PRC subsidiary are required to set aside at least 10% of their after-tax profits
after making up previous years&#8217; accumulated losses each year, if any, to fund certain reserve funds until the total amount set
aside reaches 50% of their registered capital. These reserves are not distributable as cash dividends. Furthermore, capital account
transactions, which include foreign direct investment and loans, must be approved by and/or registered with SAFE and its local
branches. See &#8220;<i>Risk Factors -Risks Relating to Doing Business in China</i>.&#8221; We rely on dividends and other
distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have, and any limitation on
the ability of our PRC subsidiary to make payments to us could have a material adverse effect on our ability to conduct our
business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Cash Flows</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, we had cash and cash
equivalents of approximately $29.0 million. The table below sets forth a summary of our cash flows for the periods indicated:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Year<br/> Ended<br/> December&#160;31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Year<br/> Ended<br/> December&#160;31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-left: 0.5pt">Net cash provided by (used in) operating activities</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(1,211,385</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,024,887</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.5pt">Net cash provided by (used in) investing activities</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">608,471</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(2,809,418</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 0.5pt">Net cash provided by financing activities</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">1,000,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">2,000,000</td><td style="text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Operating Activities</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in operating activities was approximately
$1.2 million for the year ended December 31, 2022 which was attributable primarily to increase in other receivable from related parties
of approximately $2.7 million which are funds deposited in trust account of our related party Nanjing Jinwang Art Purchase E-commerce
Co., Ltd. (&#8220;Nanjing Jinwang&#8221;) that our customers can withdraw anytime and increase in other receivables and prepaid expenses
of approximately $3.2 million primarily due to $2.7 million advance to third parties, which was short term, non-interest bearing, due
on demand and has been collected by March 22, 2023. Our cash inflow was mainly from net income of approximately $3.2 million and increase
of approximately $1.5 million in accounts payable affected by restricted cash.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash provided by operating activities was
approximately $9.0 million for the year ended December 31, 2021 which was attributable primarily to the net income of approximately $11.4
million. Our cash outflow was mainly from decrease in other receivable from related parties of approximately $1.8 million which are funds
deposited in trust account of our related party Nanjing Jinwang that our customers can withdraw anytime as well as the decrease in accounts
payable of approximately $4.5 million where we paid off more vendors using our funds from operations.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash provided by operating activities was
approximately $6.6 million for the year ended December 31, 2020 which was attributable primarily to the net income of approximately $2.0
million, the increase in depreciation and amortization of approximately $0.3 million, the collection of accounts receivable approximately
$0.8 million, the increase in other receivable from related parties of approximately $1.4 million, and the increase in accounts payable
of approximately $5.3 million as we incurred more cost of revenues and consulting expenses on business development. The cash inflow partially
offset by the increase in other receivables and prepaid expenses of approximately $0.8 million.<i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investing Activities</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash provided by investing activities was
approximately $0.6 million for the year ended December 31, 2022, which was primarily attributable to the proceed from sale of short term
investment approximately of $24.0 million offset by the purchase of short-terms investment approximately of $22.2 million. We paid approximately
$0.7 million for fixed and intangible assets and invested $0.5 million in Beijing Jiu Yu Ling Jing Technology Co., Ltd. (&#8220;JYLJ&#8221;),
in whom we acquired 11.875% equity interest.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in investing activities was approximately
$2.8 million for the year ended December 31, 2021, which was primarily attributable to the purchase of a short-term investment approximately
of $45.0 million which offset with the proceed from sale of short term investment approximately of $42.5 million, and purchase of certificate
of deposit of approximately $3.1 million. In 2020, we made a deposit of approximately $12.6 million on a proposed real estate purchase,
such deposit was subsequently refunded to us in full amount in April 2021 as we decided to purchase another building. We paid approximately
$9.6 million for an office building in Nangjing city having 6,840 square meters of space. We also purchased approximately $0.8 million
of software.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in investing activities was approximately
$11.8 million for the year ended December 31, 2020, which was primarily attributable to the deposit of approximately $12.6 million as
we paid a deposit on a proposed real estate purchase, such deposit was subsequently refunded to us in full amount in April 2021 due to
the termination of real estate purchase memorandum of understanding, purchases of a short-term investment of approximately $24.4 million
and purchases of office equipment and intangible assets of approximately $19,000 due to expansion of our operations and partially offset
by the proceed from the sale of such investment of approximately $25.3 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Financing Activities</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash provided by financing activities was
approximately $1.0 million for the year ended December 31, 2022, which was primarily attributable to the proceeds from a private placement
in 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash provided by financing activities was
approximately $2.0 million for the year ended December 31, 2021, which was primarily attributable to the proceeds from a private placement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash provided by financing activities was
approximately $18.1 million for the year ended December 31, 2020, which was primarily attributable to the proceeds from initial public
offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>5C. Research and Development, Patents and Licenses, etc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">See &#8220;Item 4. Information on the Company&#8212;B. Business Overview&#8212;Intellectual
Property.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>D. Trend Information</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 55.1pt; "><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Other than as disclosed
elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January&#160;1,
2022 to December&#160;31, 2022 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity
or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results
or financial conditions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 55.1pt; "><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>E. Critical Accounting Policies and Estimates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our management&#8217;s discussion and analysis
of our financial condition and results of operations are based on our consolidated financial statements that have been prepared in accordance
with accounting principles generally accepted in the United States (&#8220;U.S. GAAP&#8221;). The preparation of financial statements
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods.
On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors
that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value
of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">While our significant accounting policies are
described in Note 2 to our consolidated financial statements included elsewhere in this annual report, we believe that the following accounting
policies are the most critical to aid you in fully understanding and evaluating our management&#8217;s discussion and analysis:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Principles of consolidation</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The consolidated financial statements include
the accounts of the Company, its subsidiaries, the VIE and its wholly owned subsidiaries. All intercompany transactions and balances are
eliminated upon consolidation.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Revenue recognition</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The core principle underlying the revenue recognition
standard is that we will recognize revenue to represent the transfer of services to customers in an amount that reflects the consideration
to which we expect to be entitled in such exchange. This will require us to identify contractual performance obligations and determine
whether revenue should be recognized at a point in time or over time, based on when control of services transfers to a customer. Under
the guidance of FASB ASC 606, we are required to (a) identify the contract(s) with a customer, (b) identify the performance obligations
in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract
and (e) recognize revenue when (or as) we satisfy our performance obligation. Revenues are recorded, net of sales related taxes and surcharges.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We continue to derive our revenues from service
contracts with our customers with revenues being recognized upon performance of services. Persuasive evidence of an arrangement is demonstrated
via service contract and invoice; and the consideration to the customer is fixed upon acceptance of the sales contract.&#160;At times,
we offer incentives and rebates to our customers directly and we account for these incentives payable to customers as a reduction of contract
price. We have set up a customer point system where the points can be used for services on the trading platform, mainly listing services
fees. The points can also be traded amongst traders on the platform or to settle payments on the platform amongst traders. We assessed
if a material right exists when we issue these points and if the points represent separate performance obligation. In general, if the
points were given to traders based on existing accounts or promotions without the customers having to acquire services from us, therefore
there is no material right and no separate performance obligation exists.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our revenues are recognized at a point in time
or over time after all performance obligations are satisfied. In addition, we took the practical expedient to recognize the incremental
costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have
recognized is one year or less. Our commission expenses to our sales agents are expensed when incurred.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are an online provider of collectibles and
artwork e-commerce services, which allows artists and art dealers and owners to access the art trading market with a wider range of artwork
investors through our platforms. We currently facilitate trading by individual and institutional customers of collectibles and artwork
and commodities (mainly teas) on our online platforms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We generate revenue from our services in connection
with the trading of collectable, artwork and commodities on our platforms, primarily consisting of listing service fees, transaction fees,
marketing services fees and other revenues collected from traders (our customers) and/or owners.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Started in July 2019, we had signed cooperative
agreements with third parties who are experts and possess new ideas and resources for the collectibles/commodities business to co-develop
certain niche markets (such as vintage coins and teas) to be traded on our online platforms. These parties are required to place a security
deposit with us until termination of the cooperative agreements and the deposit amounts increase as the trading volume increases. Revenue
generated from these niche markets will be shared between us and these parties based on pre-agreed rates and trading volume. We accounted
for the portion of revenue that is earned by the third parties as a reduction of total contract revenue to be received from customers.
Approximately $119,000 and nil of revenue generated from these contracts had been recorded as a reduction of revenue and as payables to
these parties for the years ended December 31, 2021 and 2022, respectively.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Listing service fees</i>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">One-time nonrefundable listing service fees are
collected from traders for listing their products on the platform. Our only performance obligation is to provide the listing on our platform.
We recognize the related revenue upon the completion of our performance obligation which is when the customers&#8217; products are successfully
listed on our platforms. The fees are determined by contracts with the customers as a fixed percentage of the listing price. For some
products, we may negotiate a flat rate instead of a percentage of the listing price. For listing service contracts in which the related
performance obligations can be completed within a short period of time, we recognize the related revenue upon the completion of our performance
obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Transaction fee revenue</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Transaction fee revenue is generally calculated
based on the transaction value of collectibles, artwork and commodities per transaction. Transaction value is the dollar amount
of the purchase and sale of the collectibles, artwork and commodities after they are listed on our platform. Our performance obligation
is to facilitate the trading transactions. Transaction fee revenue is recognized and collected at the time when the transaction is completed.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Transaction fee revenue also includes predetermined
monthly transaction fees for select traders with large transactions and are negotiated on a case by case basis. Predetermined transaction
fees are recognized and earned over the specified service period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Predetermined transaction fees received in advance
of the specified service period are recorded as deferred revenue.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2018, the Company started a customer reward
points program, pursuant to which reward points were issued for opening a new account or referring customers to open accounts with us
during our promotion period. In that regard, customers are required to redeem certain reward points for new listings along with the regular
listing services fees. If a customer does not own any reward points, he/she can purchase them from other customers on our platform. We
do not record revenue when customers redeem any points as it is considered as a prerequisite for a new listing in addition to the regular
services fees. The points are traded by and among our customers on the platform and we charge a transaction fee from such points trading.
We assessed if a material right existed when we initially issued the reward points and if the reward points represent a separate performance
obligation. In general, the points were given to customers based on existing accounts or promotions without the customers having to acquire
services from the Company, therefore there was no material right and no separate performance obligation exists. Transaction fee revenue
from the trading of points amounted to approximately $3.4 million and $1.1 million for the years ended December 31, 2021 and 2022, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Marketing service fees</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Marketing service fees are usually collected after
we complete our services and includes the following type of services:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">(1)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">For certain marketing service agreements, we assist our customers in connection with his/her listing and trading of his/her collectible/artwork or commodities on our platform, which mainly includes consultation and supporting services of the marketability for the collectible/artwork or commodities; assessing its market value and market acceptance for the collectible/artwork or commodities; and assisting in the application and legal protection required for the customer&#8217;s collectible/artwork or commodities to be approved for listing on our platforms. For marketing service contracts in which the related performance obligations can be completed within a short period of time, we recognize the related revenue upon the completion of our performance obligations.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">(2)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Marketing service agreements also includes providing promotional services for customers&#8217; items as where to place ads on well-known cultural or art exchange websites in China, to provide online and offline marketing services including cooperation with auction houses and participate in industry-related exhibitions and fairs.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The marketing service fees are charged on a fixed
fee basis, which are based on the type of listing session that the customer applies for and whether the customer has listed and sold its
collectible on other platforms before, and they were not tied to the type or value of the underlying collectible, artwork or commodities.
Marketing service contracts and fees are recognized upon the completion of all performance obligations.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 87; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->82<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Other revenues</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other revenues (including $166,325 and $233,157
from related parties for the years ended December 31, 2022 and 2021, respectively) primarily includes other service fees for IT technical
support to customers and revenues from agency recommendation fees. IT technical support fees are negotiated on a case by case basis and
are recognized when the related services have been performed based on the specific terms of the contract. Agency recommendation fees are
mainly training and consulting services provided to certain traders/agents for them to become qualified. Upon completion of the training
and consultation, these qualified traders/agents may introduce our platform and services to potential customers to list their collectibles
and artwork with us for a fee or promote their own products on our platforms. Our performance obligation is completed and revenue is recognized
upon completion of training and related consulting services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Leases</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We adopted FASB ASU 2016-02, &#8220;Leases&#8221;
(Topic 842) for the year ended December&#160;31, 2021, and elected the practical expedients that does not require us to reassess: (1)
whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3)
initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting
policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to
treat the lease and non-lease&#160;components of a lease as a single lease component. Upon adoption, the Company recognized a $34,608
right of use (&#8220;ROU&#8221;) assets and same amount of lease liabilities based on the present value of the future minimum rental payments
of leases, using an incremental borrowing rate of 4.75% based on the duration of lease terms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating lease ROU assets and lease liabilities
are recognized at the adoption date or the commencement date, whichever is earlier, based on the present value of lease payments over
the lease term. Since the implicit rate for our leases are not readily determinable, we used our incremental borrowing rate based on the
information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the
rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a
similar economic environment and over a similar term.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>6.A. Directors and Executive Officers&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth information regarding our executive
officers and directors as of the date of this report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid; width: 34%"><span style="font-size: 10pt"><b>Directors and Executive Officers</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 8%; text-align: center"><span style="font-size: 10pt"><b>Age</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 56%; text-align: center"><span style="font-size: 10pt"><b>Position/Title</b></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Mun Wah Wan</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">50</span></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top"><span style="font-size: 10pt">Chairman of the Board of Directors</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Xi Li</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">35</span></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top"><span style="font-size: 10pt">Chief Financial Officer </span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Yi Shao</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">34</span></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top"><span style="font-size: 10pt">Chief Executive Officer and Director</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Nelson (Nam Sum) Wong <sup>(1)(2)(3)</sup></span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">60</span></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top"><span style="font-size: 10pt">Independent Director&#160;</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-size: 10pt">Xiaobing Liu<sup>(1)(2)(3)</sup></span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">60</span></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top"><span style="font-size: 10pt">Independent Director </span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">Jinren Chen <sup>(1)(2)(3)</sup></span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-size: 10pt">52</span></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top"><span style="font-size: 10pt">Independent Director </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Member of audit committee.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Member of compensation committee.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Member of corporate governance
and nominating committee.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 88; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->83<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Biography&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Mun Wah (Lewis) Wan</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Wan was appointed as a member of our board
of directors on April 18, 2019 and chairman of our board of directors on May 10, 2019. Since February 2007, Mr. Wan has served as chairman
of the board of directors of HKFAEx Group Limited, one of our principal shareholders, a Hong Kong corporation and securities dealer which
is licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activities of dealing in securities, advising
on securities and asset management, and Mr. Wan is also the sole shareholder of The Pride Group Holdings Limited, which owns 100% equity
interest of HKFAEx Group Limited. Since February 2013, Mr. Wan has served as committee member of Hong Kong Securities and Investment Institute.
Since 2008, Mr. Wan has serviced as the vice president and chairman of China Investment Committee of the China Hong Kong International
Economic Trading Association. From December 2012 to December 2022, Mr. Wan was the visiting professor of Beijing University of International
Business &amp; Economics. From August 2004 to February 2007, Mr. Wan was the director and chief investment officer of Marco Polo Investments
Group Limited. From September 1997 to August 2004, Mr. Wan worked at the Financial Services Division of PricewaterhouseCoopers.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Wan received his Bachelor Degree of Business
Administration, majoring in Finance, from the Hong Kong University of Science and Technology in November 1997. Mr. Wan is a senior fellow
of the Hong Kong Securities and Investment Institute, a fellow of the Hong Kong Institute of Certified Public Accountants and a fellow
of the Association of Chartered Certified Accountants. We believe that Mr. Wan&#8217;s extensive experience and leadership in the investment,
business and corporate management will benefit the Company&#8217;s operations and qualifies him to serve as the chairman of our board
of directors.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Yi Shao</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Shao was appointed as a member of our board
of directors on April 18, 2019 and as our chief executive officer on May 10, 2019. From October 2018 to March 2019, Mr. Shao served as
the general manager of Jiangsu Yanggu Culture Development Co., Ltd. From October 2017 to September 2018, Mr. Shao served as the deputy
general manager of Jiangsu Dahe Live Network Technology Co., Ltd. From October 2015 to October 2017, Mr. Shao worked as a project manager
at Nanjing Cultural and Artwork Property Exchange Co., Ltd. From June 2013 to October 2015, Mr. Shao worked as a software developer at
Marvell Electronic Technology Co., Ltd. Mr. Shao received his Bachelor Degree of electronic information science and technology from Nanjing
University in 2010 and his Master Degree of biomedical engineering from Nanjing University in 2013. We believe that Mr. Shao&#8217;s extensive
experience in art industry, market development and corporate management will benefit the company&#8217;s operations and management and
make him an important member of the board of directors and its committees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Xi Li</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Ms. Li was appointed as our Chief Financial Officer
on November 29, 2022. From September 27, 2022 to November 28, 2022, Ms. Li served as the financial manager of the Company. From October
2016 to Jun 2022, Ms. Li served as the financial manager of Golden Wheel Tiandi Holdings Company Limited. From September 2013 to February
2016, Ms. Li was a senior audit associate of KPMG Singapore office and an assistant audit manager of KPMG Shanghai Office. From June 2011
to July 2013, Ms. Li served as an audit associate of Adept Public Accounting Corporation in Singapore. Ms. Li obtained her Bachelor<span style="font-family: Times New Roman, Times, Serif">&#8217;</span>s
Degree of Science in Applied Accounting from Oxford Brookes University (UK) in 2011 and she is a fellow member of Chartered Association
of Certified Public Accountants (ACCA).&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Nelson (Nam Sum) Wong</i><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Since 2008, Mr.&#160;Wong has served as an Independent
Director and Audit Committee Chair of Recon Technology Ltd. (Nasdaq: RCON). He is Chairman and Managing Director of ACN Worldwide, a business
and investment consultancy established in Hong Kong since 1995. Prior to that, he was Vice Chairman and Chief Executive of Vigers, a Hong
Kong based real estate and investment consultancy, which he first joined in 1990 as a negotiator and later in 1993 acquired together with
his partners. Mr.&#160;Wong received his bachelor&#8217;s degree in English language and literature from the PLA Institute of International
Relations in Nanjing in 1983 and was a college teacher before moving to Hong Kong in 1986 to pursue his career in business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that Mr. Wong&#8217;s leadership skills
and extensive management experience as well as his insight in global politics will benefit the Company and make him an important member
of the board of directors and its committees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 89; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->84<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Jinren Chen</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Since January 2020, Mr. Chen has served as Chairman
and President of Nanjing Shuoming Investment Management Co., Ltd., a private equity fund management company. From February 2019 to December
2019, Mr. Chen was the fund manager for Shanghai Rongru Assets Management Co., Ltd. From May 2014 to February 2019, Mr. Chen served as
an industry analyst and then deputy general manager of market making department of Debang Securities Co., Ltd. From May 2001 to April
2014, Mr. Chen served as a researcher and then a senior researcher for Huatai Securities Co, Ltd. Mr. Chen received his bachelor&#8217;s
degree in International Trade from Nanjing University in 1997. Mr. Chen received his master degree of Engineering Management from Business
School of Hohai University in Nanjing in 2000 and his Ph.D degree in Economics from Business School of Nanjing University in 2009. Mr.
Chen has passed securities practitioner and fund practitioner qualification tests in China. We believe Mr. Chen&#8217;s extensive experience
in capital market will benefit the Company and make him an important member of the board of directors and its committees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Xiaobing Liu</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Liu was appointed as a member of our board of directors on May
10, 2019.&#160; Since April 2006, Mr. Liu has been a professor at Nanjing Tech University School of Law. Since June 2022, Mr. Liu has
served as an independent director of the board of Nanjing Yigao Medical Technology Co., Ltd. Since March 2022, Mr. Liu has served as the Dean of the Legislative
Research Institute at Jinling University of Science and Technology. From May 2016 to May 2022, Mr. Liu served
as an independent director of the board of GPRO Titanium Industry Co., Ltd. From September 2012 to September 2018, Mr. Liu served as an
independent director of the board of Nanjing Baotai Special Materials Co., Ltd. From January 2014 to July 2017, Mr. Liu served as the
Dean of Nanjing Tech University School of Law. Mr. Liu received his Bachelor of Law degree from East China University of Political Science
and Law (&#8220;ECUPL&#8221;) in 1983 and his Master&#8217;s Degree of Legal History from ECUPL in 1986. Mr. Liu received his Doctor&#8217;s
Degree of Constitution and Administrative Laws from Wuhan University in 2007. Mr. Liu holds a public company independent director qualification
certificate from Shanghai Stock Exchange since November 2011. We believe that Mr. Liu&#8217;s legal expertise and knowledge will benefit
the Company&#8217;s business and operations and make him a valuable member of the board of directors and its committees.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.B. Compensation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">During
the fiscal year ended December 31, 2022, we paid an aggregate of approximately RMB0.6 million (US$82,727) in cash to our executive officers,
and paid RMB0.4 million (US$53,640) to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement
or other similar benefits to our executive officers and directors. Our Hong Kong subsidiaries are required by law to make contributions
equal to certain percentages of each employee&#8217;s salary for his or her mandatory provident fund. Our PRC subsidiary and the variable
interest entity are required by law to make contributions equal to certain percentages of each employee&#8217;s salary for his or her
pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Employment Agreements, Director Agreements and Indemnification Agreements
</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have entered into employment agreements with
each of our executive officers. Under these agreements, each of our executive officers is employed for an initial term of one year and
is renewable upon mutual agreement of the Company and the executive officer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The executive officers are entitled to a fixed
salary and to participate in our equity incentive plan and other company benefits, each as determined by the board of directors from time
to time.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may terminate the executive officer&#8217;s
employment for cause, at any time, without notice or remuneration, for certain acts, such as conviction or plea of guilty to a felony
or grossly negligent or dishonest acts to our detriment, or material breach of any term of any employment or other services, confidentiality,
intellectual property or non-competition agreements with the Company. In such case, the executive officer will solely be entitled to accrued
and unpaid salary through the effective date of such termination, and his/her right to all other benefits will terminate, except as required
by any applicable law. The executive officer is not entitled to severance payments upon any termination.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The executive officer may voluntarily terminate
his/her employment for any reason and such termination shall take effect 30 days after the receipt by Company of the notice of termination.
Upon the effective date of such termination, the executive officer shall be entitled to (a) accrued and unpaid salary and vacation through
such termination date; and (b) all other compensation and benefits that were vested through such termination date.&#160;&#160;In the event
the executive officer is terminated without notice, it shall be deemed a termination by the Company for cause.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each of our executive officers has agreed not
to use for his/her personal purposes nor divulge, furnish, or make accessible to anyone or use in any way (other than in the ordinary
course of the business of the Company) any confidential or secret information or knowledge of the Company, whether developed by him/herself
or by others.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, each executive officer has agreed
to be bound by non-competition restrictions during the term of his or her employment and for six months following the last date of employment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each executive officer also has agreed not to
(i)&#160;solicit or induce, on his/her own behalf or on behalf of any other person or entity, any employee of the Company or any of its
affiliates to leave the employ of the Company or any of its affiliates; or (ii)&#160;solicit or induce, on his/her own behalf or on behalf
of any other person or entity, any customer or prospective customer of the Company or any of their respective affiliates to reduce its
business with the Company or any of its affiliates.</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have also entered into director agreements
with each of our independent directors which agreements set forth the terms and provisions of their engagement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, we have entered into indemnification
agreements with each of our directors and executive officers that provide such persons with additional indemnification beyond that provided
in our current memorandum and articles of association.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Share Incentive Plans</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors of the Company approved
and adopted Oriental Culture Holding LTD 2021 Omnibus Equity Plan (the &#8220;Equity Plan&#8221;) on November 8, 2021, which was approved
at the stockholders&#8217; meeting on December 16, 2021. The total aggregate ordinary shares of the Company authorized for issuance during
the term of the Equity Plan is limited to 4,000,000 shares and none has been granted as of the date of this report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following paragraphs summarize the terms of
the Equity Plan:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Administration</i></b>. The Equity Plan
requires that a committee of non-employee directors to administer the Equity Plan. Currently, our Compensation Committee, which we refer
to hereto as the Committee, administers the Equity Plan.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Shares Subject to the Equity Plan</i></b>.
The shares issuable under the Equity Plan are our ordinary shares that are authorized but unissued or reacquired ordinary shares, including
shares repurchased by the Company as treasury shares. The total aggregate ordinary shares of the Company authorized for issuance during
the term of the Equity Plan is limited to 4,000,000 shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Types of Awards and Eligibility</i></b>.
The Equity Plan provides for five types of awards and they are: Stock Options, Stock Appreciation Rights (&#8220;SAR&#8221;), Unrestricted
Stock, Restricted Stock and Restricted Stock Units. The Eligible Persons under the Equity Plan include Employees, Outside Directors, Consultants
and New Hires of the Company or its subsidiaries,&#160;as selected by our Board or the designated committee thereof.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Vesting and Forfeiture</i></b><i>.</i>&#160;The
Committee determines the time and conditions under which the award will vest or the period of time after which the restriction shall lapse
as part of making an award. Vesting or the lapse of the period of restriction may, in the Committee&#8217;s discretion, be based solely
upon continued employment or service for a specified period of time, or may be based upon the achievement of specific performance goals
(individual, corporation or other basis), or both. Unless otherwise provided by the Committee, when a participant terminates employment
or service with us, all unexercised or unvested awards are forfeited, and if the termination is without cause, all outstanding vested
options and SARs will continue to be exercisable until the earlier of the expiration term or the date that is three months after such
termination date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Prohibition on Repricing</i></b>. Except
as required or permitted pursuant to a corporate transaction (including, without limitation, any recapitalization or reorganization),
in no event will an option or SAR be amended to reduce the exercise or base price or be canceled in exchange for cash, other awards or
options or SARs with an exercise price or base price less than the exercise price of the original option or base price of the original
SAR without shareholder approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Limits on Transfers of Awards/Beneficiary
Designation</i></b>. All awards are exercisable only by the participant during the participant&#8217;s lifetime, and are transferable
only by will or by the laws of descent and distribution; provided, however, that the Committee may permit a transfer of an award, other
than an incentive stock option, to a family member of an individual, subject to such restrictions as the Committee may provide.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Term.</i></b>&#160;The Equity Plan is effective
immediately upon the adoption by our Board of Directors, subject to shareholder approval, and will terminate on the earliest to occur
of (i) the 10th&#160;anniversary of the Equity Plan&#8217;s effective date, or (ii) the date on which all shares available for issuance
under the Equity Plan shall have been issued as fully-vested shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->86<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.C. Board Practices</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Terms of Directors and Officers</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our officers are elected by and serve at the discretion
of the Board. Our directors may be elected by an ordinary resolution of our shareholders. Alternatively, our board of directors may, by
the affirmative vote of a simple majority of the directors present and voting at a board meeting appoint any person as a director to fill
a casual vacancy on our board. Our directors are not subject to a set term of office and hold office until the next general meeting called
for the election of directors and until their successor is duly elected or such time as they die, resign or are removed from office by
a shareholders&#8217; ordinary resolution or the unanimous written resolution of all shareholders. A director will be removed from office
automatically if, among other things, the director becomes bankrupt or makes any arrangement or composition with his creditors generally
or is found to be or becomes of unsound mind.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Board Diversity Matrix</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -1.5pt">The
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td colspan="5" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"><b>Board
                                            Diversity Matrix (As of April 26, 2023)</b></p></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Country of Principal Executive Offices:</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Disclosure Prohibited Under Home Country Law:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: left"><span style="font-size: 10pt">No</span></td><td style="text-align: left">&#160;</td></tr>
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    <td style="width: 86%; text-align: left">Total Number of Directors</td><td style="width: 1%">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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 Disclose<br/>
 Gender</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td colspan="17" style="font-weight: bold">Part I: Gender Identity</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">0</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">0</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->87<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -1.5pt">Our board of directors currently
consists of 5 directors. We have established an audit committee, a compensation committee and a corporate governance and nominating committee.
Each of the committees of the board of directors has the composition and responsibilities described below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Audit Committee</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Nelson Wong<b>, </b>Xiaobing Liu and Jinren Chen
are the members of our audit committee, and Nelson Wong serves as the chairman. All members of our audit committee satisfy the independence
standards promulgated by the SEC and by NASDAQ as such standards apply specifically to members of audit committees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>&#160;&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have adopted and approved a charter for the
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: justify; width: 0.5in"></td><td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">approves the plan and fees for
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</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top; text-align: justify">
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the results of the annual audit and reviews of our interim financial statements;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top; text-align: justify">
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in connection with legal, ethical and risk management compliance programs established by management and the board of directors, including
Sarbanes-Oxley Act implementation, and makes recommendations to the board of directors regarding corporate governance issues and policy
decisions.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our board of directors has determined that Nelson
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Compensation Committee</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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are qualified as independent under the current definition promulgated by NASDAQ. We have adopted a charter for the compensation committee.&#160;In
accordance with the compensation committee&#8217;s charter, the compensation committee is responsible for overseeing and making recommendations
to the board of directors regarding the salaries and other compensation of our executive officers and general employees and providing
assistance and recommendations with respect to our&#160;compensation policies and practices.&#160;The compensation committee is responsible
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Corporate Governance and Nominating Committee </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Nelson Wong<b>, </b>Xiaobing Liu and Jinren Chen
are the members of our corporate governance and nominating committee and Xiaobing Liu serves as the chairman.&#160;&#160;All members of
our corporate governance and nominating committee are qualified as independent under the current definition promulgated by NASDAQ. We
have adopted a charter for the corporate governance and nominating committee.&#160;In accordance with its charter, the corporate governance
and nominating committee is responsible for identifying and proposing new potential director nominees to the board of directors for consideration
and reviewing our corporate governance policies. The corporate governance and nominating committee is responsible for, among other things:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Director Independence</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our board of directors reviewed the materiality
of any relationship that each of our proposed directors has with us, either directly or indirectly. Based on this review, it is determined
that Nelson Wong<b>, </b>Xiaobing Liu and Jinren Chen are the&#160;&#8220;independent directors&#8221;&#160;as defined by NASDAQ.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.D. Employees</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, December 31, 2021 and
December 31, 2020, we had a total of 57, 51 and 47 full time employees, respectively. The following table sets forth the breakdown of
our employees&#8217; functions as of December 31, 2022:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">excluding the employees of Zhongcang
Warehouse Co., Ltd., an 18% indirect subsidiary of Jiangsu Yanggu, the VIE.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, 54 of our employees were
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We understand that our success depends on our
ability to attract, train and retain our employees.&#160;Therefore, as part of our human resources strategy, we offer employees competitive
salaries, performance-based cash bonuses and promotions, engagement activities, various welfare as well as other incentives. We design
and provide training to our employees regularly in order to enhance their professional skills and foster their career development. We
also recognize the importance of keeping our employees safe. In response to the COVID-19 pandemic, we implemented changes that we determined
were in the best interest of our employees and have followed local government orders to prevent the spread of COVID-19.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->89<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As required by PRC regulations, we participate
in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical
insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident
fund. We are required under PRC law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses
and certain allowances of our employees, up to a maximum amount specified by the local government from time to time. As of the date of
this report, we have made adequate employee benefit payments. However, if we were found by the relevant authorities that we failed to
make adequate payment, we may be required to make up the contributions for these plans as well as to pay late fees and fines. See <i>&#8220;Risk
Factors&#8212;Risks Related to Doing Business in China&#8212;Failure to make adequate contributions to various employee benefit plans
as required by PRC regulations may subject us to penalties.&#8221;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As required by Hong Kong laws and regulations,
we contribute to the Mandatory Provident Fund and take out insurance policies for our Hong Kong-based employees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We enter into standard labor and confidentiality
agreements with our employees. We believe that we maintain a good working relationship with our employees, and we have not experienced
any major labor disputes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.E. Share Ownership</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>The following table sets forth information
with respect to the beneficial ownership of our ordinary shares as of April 26, 2023 for:</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">each beneficial owner of 5% or more of our outstanding ordinary shares;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">each of our directors and executive officers; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Beneficial ownership is determined in accordance
with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting
power or investment power with respect to those securities and include ordinary shares issuable upon the exercise of options that are
immediately exercisable or exercisable within 60&#160;days of the date hereof.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Except as otherwise indicated, all of the shares
reflected in the table are ordinary shares and all persons listed below have sole voting and investment power with respect to the shares
beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial
ownership for any other purpose.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The calculations in the table below are based
on 21,226,992 ordinary shares issued and outstanding as of the date of April 26, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Except as otherwise indicated in the table below,
addresses of our directors, executive officers and named beneficial owners are in care of Oriental Culture Holding LTD, Room 1402, Richmake
Commercial Building, 198-200 Queen&#8217;s Road Central, Hong Kong. Our telephone number at this address is (852) 2110-3909.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Jinren Chen</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">5% or Greater Shareholders:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">HKFAEx Group Limited<sup>(1)</sup></span></td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oriental Culture Investment Development LTD<sup>(3)</sup></span></td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">11.5</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oriental Culture Investment Communication LTD<sup>(4)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,450,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">11.5</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">All directors and executive officers as a group (six individuals)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,794,982</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">8.5</td><td style="text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Mun Wah Wan, chairman of our board
of directors, is the sole shareholder of The Pride Group Holdings Limited, a British Virgin Islands company, which owns 100% equity interest
of HKFAEx Group Limited. Mr. Wan is also the chairman of the board of directors of HKFAEx Group Limited, a Hong Kong corporation and
securities dealer which is licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activities of dealing
in securities, advising on securities and asset management, and holds the voting and dispositive power over the ordinary shares held
by it. The registered address of HKFAEx Group Limited is Unit 909, Level 9, Cyberport 2, Hong Kong. The registered address of The Pride
Group Holdings Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town Tortola, VG1110, British Virgin Islands.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 95; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->90<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-size: 10pt">(2)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Yi Shao, our chief executive officer and a member of our board of directors, is the shareholder and director of Oriental Culture Investment Diffusion LTD, a British Virgin Islands company, and holds the voting and dispositive power over the ordinary shares held by it. The registered address of Oriental Culture Investment Diffusion LTD is situated at offices of Sertus Incorporations (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(3)</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(4)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Huajun Gao is the sole shareholder and director of Oriental Culture Investment Communication LTD, a British Virgin Islands company, and holds the voting and dispositive power over the ordinary shares held by it. The registered address of Oriental Culture Investment Communication LTD is situated at offices of Sertus Incorporations (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><div><a id="a_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>ITEM&#160;7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>7.A. Major Shareholders</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See Item 6.E., &#8220;Share Ownership,&#8221;
for a description of our major shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>7.B. Related Party Transactions</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Variable Interest Entity Arrangements&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">See &#8220;<i>Item 4. Information on the Company&#8212;C.
Organizational Structure</i>.&#8221;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Employment Agreements, Director Agreements and Indemnification Agreements&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See &#8220;<i>Item 6. Directors, Senior Management
and Employees&#8212;B. Compensation of Directors and Executive Officers&#8212;Employment Agreements, Director Agreements and Indemnification
Agreements.</i>&#8221;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 96; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->91<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">a. Accounts receivable &#8211; related parties consist of the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center; padding-left: 0.125in">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Relationship</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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2022</td><td style="white-space: nowrap; text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="white-space: nowrap; text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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2021</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 0.125in; text-indent: -0.125in; padding-bottom: 4pt; vertical-align: top">Total</td><td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td>
    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td>
    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">b. Accounts payable &#8211; related parties consist of the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">c. Other payables &#8211; related
parties consist of the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other payables &#8211; related parties are those
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">d. Net revenues &#8211; related parties consist
of the following:</p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: left; vertical-align: top">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left; vertical-align: top">&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; width: 22%; text-align: left; text-indent: -9pt; padding-left: 9pt">Nanjing Culture</td><td style="text-align: left; width: 1%; vertical-align: top">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">41,571</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="vertical-align: top; text-align: left">Technological service fee revenue </td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">21,542</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">22,519</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">21,042</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="vertical-align: top; text-align: left">Technological service fee revenue </td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">21,821</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">17,813</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Kashi Jinwang Art Purchase E-commerce Co., Ltd. </td><td style="text-align: left; padding-bottom: 1.5pt; vertical-align: top">&#160;</td>
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    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt">Technological service fee revenue </td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">97,758</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td>
    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

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</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">f. Selling and marketing expenses &#8211; related
party consists of the following:</p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; width: 30%; text-align: left; text-indent: -10pt; padding-left: 10pt">Kashi Jinwang Art Purchase E-commerce Co., Ltd.</td><td style="text-align: left; width: 1%; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; width: 22%; text-align: left">100% owned by Nanjing Jinwang.</td><td style="text-align: left; width: 1%; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; width: 22%; text-align: left">Online advertising expenses</td><td style="width: 1%">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2019, the Company entered into advertising
contract with Kashi Jinwang Art Purchase E-commerce Co., Ltd. pursuant to which the Company would use advertising space on Kashi Jinwang&#8217;s
website from January 1, 2019 to December 31, 2022. The Company was charged a yearly advertising fee of approximately $0.18 million per
year adjustable by actual usage, which was approximately 1.7% of the Company&#8217;s initial listing value of collectible or artwork at
the time when the contract was entered. On May 1, 2020, the contract between the Company and Kashi Jinwang Art Purchase E-commerce Co.,
Ltd. was amended and the monthly advertising fee was fixed at 1.5% of the initial listing value of collectible or artwork from May 1,
2020 to December 31, 2022. The contract was further amended on June 25, 2020, pursuant to which the fee will be 2.25% of the initial listing
value of collectibles or artwork from July 1, 2020 to December 31, 2020, then return back to 1.5% from January 1, 2021 to December 31,
2022.</p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">g. During the year ended December 31, 2022 and
2021, HKDAEx paid approximately $51,000 and $65,000, respectively, to HKFAEx, a company owned by our Chairman for accounting and business
administration services.</p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">h. The Company entered into a non-cancellable
Office Premises Use Contract with&#160;Nanjing Culture&#160;for an office space from January 1, 2020 to December 31, 2020 with a monthly
rental of approximately $14,000 including VAT taxes. The Company renewed the lease under the same terms from January 1, 2021 to December
31, 2021 and then renewed again to December 31, 2022. Total rental expense for the years ended December 31, 2022 and 2021 amounted to
approximately $151,000 and $158,000, respectively.</p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">i. Other receivables &#8211; related party consist
of funds which are held in trading platform trust account entrusted with Nanjing Jinwang. The funds are unrestricted as to immediate
withdrawal and use after the Company&#8217;s customers completed the necessary administrative procedures from the platform. The Company
normally make withdraw monthly. As of March 22, 2023, approximately RMB 6.0 million (US$ 0.9 million) was returned to the Company.</p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>7.C. Interests of Experts and Counsel</b></p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.<b>&#160;</b></p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->93<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="a_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>ITEM 8. FINANCIAL INFORMATION</b></p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Consolidated Statements and Other Financial Information</p><div>

</div><p style="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The financial statements required by this item
may be found at the end of this Annual Report on 20-F, beginning on page F-1.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Legal Proceedings</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are currently not involved in any material
legal or administrative proceedings. From time to time, we may be subject to various legal or administrative claims and proceedings arising
in the ordinary course of business. Such legal or administrative claims and proceedings, even if without merit, could result in the expenditure
of financial and management resources and potentially result in civil liability for damages.&#160;&#160;</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Dividends</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have not previously declared or paid cash dividends
and we have no plan to declare or pay any dividends in the near future on our ordinary shares. We currently intend to retain most, if
not all, of our available funds and any future earnings to operate and expand our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a holding company incorporated in the Cayman
Islands. We rely principally on dividends from our PRC and Hong Kong subsidiaries for our cash requirements, including any payment of
dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See &#8220;<i>PRC
Laws and Regulations Relating to Foreign Exchange&#8212;Dividend Distribution.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our board of directors has discretion as to whether
to distribute dividends, subject to applicable laws. Even if our board of directors decides to pay dividends, the form, frequency and
amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual
restrictions and other factors that the board of directors may deem relevant. Cash dividends on our ordinary shares, if any, will be paid
in U.S. dollars.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>No Significant Changes</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Except as disclosed elsewhere in this annual report,&#160;no
other significant changes to our financial condition have occurred since the date of the annual financial statements contained herein.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;&#160;&#160;</b></p><div>

</div><div><a id="a_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>ITEM 9. THE OFFER AND LISTING</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>9.A. Offer and Listing Details</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our ordinary shares are listed for trading on
the NASDAQ Capital Market under the symbol &#8220;OCG.&#8221; The shares began trading on December 15, 2020 on the NASDAQ Capital Market.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.25in"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>9.B. Plan of Distribution</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>9.C. Markets</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our ordinary shares have been listed on the Nasdaq
Capital Market since December 15, 2020 under the symbol &#8220;OCG&#8221;.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>9.D. Selling Shareholders</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>9.E. Dilution</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>9.F. Expenses of the Issuer</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="a_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 10. ADDITIONAL INFORMATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>10.A. Share Capital</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->94<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>10.B. Memorandum and Articles of Association</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a Cayman Islands exempted company limited
by shares and our affairs are governed by our current memorandum and articles of association and the Companies Act (As Revised) of the
Cayman Islands, which we refer to as the &#8220;Companies Act&#8221; below, and the common law of the Cayman Islands.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our authorized share capital is $50,000.00 divided
into 1,000,000,000 shares comprising of (i) 900,000,000 ordinary shares of a nominal or par value of $0.00005 each; and (ii) 100,000,000
preferred shares of a nominal or par value of $0.00005 each.&#160;&#160;As of April 27, 2023, 21,226,992 ordinary shares are outstanding
and no preferred share is issued or outstanding.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our shareholders adopted our current amended and
restated memorandum and articles of association by way of a special resolution on November 8, 2019.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our registered office in the Cayman Islands is
located at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to clause 3 of our current amended and
restated memorandum of association, the objects for which the Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by The Companies Act (As Amended) or as the same may be amended from time to
time, or any other law of the Cayman Islands.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following are summaries of material provisions
of our current memorandum and articles of association, insofar as they relate to the material terms of our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Board of Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See &#8220;<i>Item 6. Directors, Senior Management
and Employees</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Ordinary Shares</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Dividends.</i>&#160;&#160;Subject to any rights
and restrictions of any other class or series of shares, our board of directors may, from time to time, declare dividends on the shares
issued and authorize payment of the dividends out of our lawfully available funds. No dividends shall be declared by the board out of
our company except the following:&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">profits; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#8220;share premium account,&#8221; which represents the excess of the price paid to our company on issue of its shares over the par or &#8220;nominal&#8221; value of those shares, which is similar to the U.S. concept of additional paid in capital.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">However, no dividend shall bear interest against
the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Voting Rights.</i>&#160;&#160;The holders of
our ordinary shares are entitled to one vote per share, including the election of directors. Voting at any meeting of shareholders is
by show of hands unless a poll is demanded. On a show of hands every shareholder present in person or by proxy shall have one vote. &#160;On
a poll every shareholder entitled to vote (in person or by proxy) shall have one vote for each share for which he/she is the holder. A
poll may be demanded by the chairman or one or more shareholders present in person or by proxy holding not less than 10 percent of the
paid up share capital of the Company entitled to vote. A quorum required for a meeting of shareholders consists of shareholders who hold
at least one-third of our issued and outstanding shares entitled to vote at the meeting present in person or by proxy and that any holder
of shares of the class present in person or by proxy may demand a poll. While not required by our articles of association, a proxy form
will accompany any notice of general meeting convened by the directors to facilitate the ability of shareholders to vote by proxy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->95<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Any ordinary resolution to be made by the shareholders
requires the affirmative vote of a simple majority of the votes of the issued and outstanding ordinary shares cast in a general meeting,
while a special resolution requires the affirmative vote of no fewer than two-thirds of the votes of the issued and outstanding ordinary
shares cast. Under Cayman Islands law, some matters, such as amending the memorandum and articles, changing the name or resolving to be
registered by way of continuation in a jurisdiction outside the Cayman Islands, require approval of shareholders by a special resolution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no limitations on non-residents or foreign
shareholders in the current memorandum and articles to hold or exercise voting rights on the ordinary shares imposed by foreign law or
by the charter or other constituent document of our company. However, no person will be entitled to vote at any general meeting or at
any separate meeting of the holders of the ordinary shares unless the person is registered as of the record date for such meeting and
unless all calls or other sums presently payable by the person in respect of ordinary shares in the Company have been paid.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Winding Up; Liquidation.</i>&#160;&#160;Upon
the winding up of our company, after the full amount that holders of any issued shares ranking senior to the ordinary shares as to distribution
on liquidation or winding up are entitled to receive has been paid or set aside for payment, the holders of our ordinary shares are entitled
to receive any remaining assets of the Company available for distribution as determined by the liquidator. The assets received by the
holders of our ordinary shares in a liquidation may consist in whole or in part of property, which is not required to be of the same kind
for all shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Calls on Ordinary Shares and Forfeiture of
Ordinary Shares.</i>&#160;&#160;Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their
ordinary shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. Any ordinary
shares that have been called upon and remain unpaid are subject to forfeiture.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Redemption of Ordinary Shares.</i>&#160;&#160;We
may issue shares that are, or at its option or at the option of the holders are, subject to redemption on such terms and in such manner
as it may, before the issue of the shares, determine. Under the Companies Act, shares of a Cayman Islands exempted company may be redeemed
or repurchased out of profits or share premium of the company, provided the current memorandum and articles authorize this and it has
the ability to pay its debts as they come due in the ordinary course of business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>No Preemptive Rights.</i>&#160;&#160;Holders
of ordinary shares will have no preemptive or preferential right to purchase any securities of our company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Variation of Rights Attaching to Shares.</i>&#160;&#160;If
at any time the share capital is divided into different classes of shares, the rights attaching to any class (unless otherwise provided
by the terms of issue of the shares of that class) may, subject to the current memorandum and articles, be varied or abrogated with the
consent in writing of the holders of all of the issued shares of that class or with the sanction of an ordinary resolution passed at a
general meeting of the holders of the shares of that class.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Anti-Takeover Provisions.</i> Some provisions
of our current memorandum and articles of association may discourage, delay or prevent a change of control of our company or management
that shareholders may consider favorable, including provisions that authorize our board of directors to issue preferred shares in one
or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further
vote or action by our shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">However, under Cayman Islands law, our directors
may only exercise the rights and powers granted to them under our current memorandum and articles of association for a proper purpose
and for what they believe in good faith to be in the best interests of our company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Transfer of Shares. </i>Subject to certain
restriction in the articles of association as may be applicable, any shareholder may transfer all or any of its shares by an instrument
in writing in any usual or common form or any other form which the Board of Directors may approve or on behalf of the transferor and if
in respect of a nil or partly paid up share or if so required by the Board of Directors shall also be executed on behalf of the transferee
and shall be accompanied by the certificate of the shares to which it relates and such other evidence as the Board of Directors may reasonably
require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain a holder of the share until
the name of the transferee is entered in the Register of Members/Shareholders in respect thereof.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 101; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->96<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors may in their absolute discretion
to decline to register any transfer of any share, whether or not it is a fully paid share, without assigning any reason for so doing.
If the Board of Directors refuse to register a transfer, they shall within 2 months of the date on which the transfer was lodged with
the Company send to the transferor and transferee notice of the refusal.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All instruments of transfer which shall be registered
shall be retained by the Company, but any instrument of transfer which the Board of Directors may decline to register shall (except in
any case of fraud) be returned to the person depositing the same.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The registration of transfers may be suspended
at such times and for such periods as the Board of Directors may from time to time determine, provided always that such registration shall
not be suspended for more than 45 days in any year.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Inspection of Books and Records</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Holders of our shares have no general right under
Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records (other than our memorandum and articles
of association and any special resolutions passed by our shareholders, and the register of mortgages and charges of our company).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>General Meeting of Shareholders.</i> Shareholders&#8217;
meetings may be convened by our board of directors. Advance notice of at least seven (7)&#160;calendar days is required for the convening
of our annual general shareholders&#8217; meeting and any other general meeting of our shareholders. No business shall be transacted at
any general meeting unless a quorum of shareholders is present at the time when the meeting proceeds to business. Save as otherwise provided
by the articles of association, a quorum shall consist of one or more shareholders present in person or by proxy holding at least one-third
(1/3) of the paid up voting share capital of the Company. &#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Exempted Company.</i> We are an exempted company
with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies.
Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered
as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted
company:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">is not required to open its register of members for inspection;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">does not have to hold an annual general meeting;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">may issue shares with no par value;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">may register as a limited duration company; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">may register as a segregated portfolio company.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#8220;Limited liability&#8221; means that the
liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances,
such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which
a court may be prepared to pierce or lift the corporate veil).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 102; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->97<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Preferred Shares</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Directors may authorise the division of shares into any number of Classes and the different Classes shall be authorised, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Directors or by an Ordinary Resolution. The Directors may issue shares with such preferred or other rights, all or any of which may be greater than the rights of Ordinary Shares, at such time and on such terms as they may think appropriate. The Directors may issue from time to time, out of the authorised share capital of the Company (other than the authorised but unissued Ordinary Shares), series of preferred shares in their absolute discretion and without approval of the shareholders; provided, however, before any preferred shares of any such series are issued, the Directors shall by resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including:.</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different
from the par value thereof;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms
of such voting rights, which may be general or limited;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions
and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends
payable on any shares of any other class or any other series of shares;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions
of such redemption;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the Members
upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference
shall bear to the entitlements of the holders of shares of any other class or any other series of shares;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for
retirement or other corporate purposes and the terms and provisions relative to the operation thereof;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of
preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method,
if any, of adjusting the same, and any other terms and conditions of conversion or exchange;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(h)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends
or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing shares
or shares of any other class of shares or any other series of preferred shares;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares, including
additional shares of such series or of any other class of shares or any other series of preferred shares; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(j)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions
thereof;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">and, for such purposes, the Directors
may reserve an appropriate number of shares for the time being unissued.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>10.C. Material Contracts</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have not entered into any material contracts
other than in the ordinary course of business and other than those described in this annual report.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>10.D. Exchange Controls</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Cayman Islands</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently there is no exchange control regulations
in the Cayman Islands applicable to us and shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Hong Kong</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no foreign exchange controls in Hong
Kong and there is a free flow of capital into and out of Hong Kong. There are no restrictions on remittances of H.K. dollar or any other
currency from Hong Kong to persons not resident in Hong Kong for the purpose of paying dividends or otherwise.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>PRC</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See &#8220;<i>Item 4. Information on the Company&#8212;B.
Business Overview&#8212;Regulation&#8212;PRC Laws and Regulations Relating to Foreign Exchange</i>&#8221; for exchange controls in China.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>10.E. Taxation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following summary of the material Cayman Islands,
PRC, Hong Kong and U.S. tax consequences of an investment in our ordinary shares is based upon laws and relevant interpretations thereof
in effect as of the date hereof, all of which are subject to change, possibly with retroactive effect. This summary is not intended to
be, nor should it be construed as, legal or tax advice and is not exhaustive of all possible tax considerations. This summary also does
not deal with all possible tax consequences relating to an investment in our ordinary shares, such as the tax consequences under state,
local, or under the tax laws of jurisdictions other than the Cayman Islands, PRC, Hong Kong and the United States. Investors should consult
their own tax advisors with respect to the tax consequences of the acquisition, ownership and disposition of our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Cayman Islands Taxation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Cayman Islands currently levies no taxes on
individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax
or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties
which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not
party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations
or currency restrictions in the Cayman Islands.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Payments of dividends and capital in respect of
the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital
to any holder of the shares, nor will gains derived from the disposal of the shares be subject to Cayman Islands income or corporation
tax.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No stamp duty is payable in respect of the issue
of the shares or on an instrument of transfer in respect of a share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>People&#8217;s Republic of China Taxation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the EIT Law, an enterprise established outside
the PRC with a &#8220;de facto management body&#8221; within the PRC is considered a PRC resident enterprise for PRC enterprise income
tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income as well as tax reporting obligations.
Under the Implementation Rules, a &#8220;de facto management body&#8221; is defined as a body that has material and overall management
and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise. In
addition, SAT Circular 82 issued in April 2009 specifies that certain offshore-incorporated enterprises controlled by PRC enterprises
or PRC enterprise groups will be classified as PRC resident enterprises if all of the following conditions are met: (a)&#160;senior management
personnel and core management departments in charge of the daily operations of the enterprises have their presence mainly in the PRC;
(b)&#160;their financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c)&#160;major
assets, accounting books and company seals of the enterprises, and minutes and files of their board&#8217;s and shareholders&#8217; meetings
are located or kept in the PRC; and (d)&#160;half or more of the enterprises&#8217; directors or senior management personnel with voting
rights habitually reside in the PRC. Further to SAT Circular 82, the SAT issued SAT Bulletin 45, which took effect in September 2011,
to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details
of determination on PRC resident enterprise status and administration on post-determination matters. If the PRC tax authorities determine
that the Company is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could
follow. For example, Jiangsu Yanggu may be subject to enterprise income tax at a rate of 25% with respect to its worldwide taxable income.
Also, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise shareholders and with respect to gains derived
by our non-PRC enterprise shareholders from transferring our shares or ordinary shares and potentially a 20% of withholding tax would
be imposed on dividends we pay to our non-PRC individual shareholders and with respect to gains derived by our non-PRC individual shareholders
from transferring our shares or ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">It is unclear whether, if we are considered a
PRC resident enterprise, holders of our shares or ordinary shares would be able to claim the benefit of income tax treaties or agreements
entered into between China and other countries or areas. See &#8220;<i>Risk Factors&#8212;Risk Factors Relating to Doing Business in China&#8212;If
we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences
to us and our non-PRC shareholders</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The SAT issued SAT Circular 59 together with the
Ministry of Finance in April 2009 and SAT Circular 698 in December 2009. Both SAT Circular 59 and SAT Circular 698 became effective retroactively
as of January&#160;1, 2008, and Circular 7 replaced of some of the existing rules in Circular 698, effective in February 2015. &#160;On
October 17, 2017, the SAT promulgated Bulletin 37, and Circular 698 was replaced with effect from December 1, 2017. Under Circular&#160;7,
where a non-resident enterprise conducts an &#8220;indirect transfer&#8221; by transferring taxable assets, including, in particular,
equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident
enterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the relevant
tax authority such indirect transfer. Using a &#8220;substance over form&#8221; principle, the PRC tax authority may disregard the existence
of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding
or deferring PRC tax. We and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or
being taxed, under Circular 59 or Circular 7 and Bulletin 37, and may be required to expend valuable resources to comply with Circular
59, Circular 7 and Bulletin 37 or to establish that we and our non-resident enterprises should not be taxed under these circulars. In
addition, in accordance with the Individual Income Tax Law promulgated by the Standing Committee of NPC late amended on August 31, 2018
and become effective on January 1, 2019, where an individual carries out other arrangements without reasonable business purpose and obtains
improper tax gains, the tax authorities shall have the right to make tax adjustment based on a reasonable method, and levy additional
tax and collect interest if there is a need to levy additional tax after making tax adjustments. As a result, our beneficial owners, who
are PRC residents, may be deemed to have carried out other arrangements without reasonable business purpose and obtains improper tax gains
for such indirect transfer, and thus be levied tax. See &#8220;<i>Risk Factors&#8212;Risk Factors Relating to Doing Business in China&#8212;Enhanced
scrutiny</i>&#160; <i>over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we
may pursue in the future</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Arrangement between the Mainland
China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Tax Arrangement,
where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise,
the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced
to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority. Pursuant to the Notice of the State Administration
of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or Circular 81, a resident enterprise
of the counter-party to such Tax Arrangement should meet the following conditions, among others, in order to enjoy the reduced withholding
tax under the Tax Arrangement: (i)&#160;it must directly own the required percentage of equity interests and voting rights in such PRC
resident enterprise; and (ii)&#160;it should directly own such percentage in the PRC resident enterprise anytime in the 12 months prior
to receiving the dividends. Furthermore, pursuant to the Administrative Measures for Non-Resident Taxpayers to Enjoy the Treaty Treatment,
or the Administrative Measures, which became effective in January 2020, in order to enjoy the reduced withholding tax rate under the treaty
treatment, non-resident taxpayers who meet the conditions for treaty treatment by their own judgment, may declare that they are entitled
to the treaty treatment and accept the post-declaration supervision by the tax authority at the time of filing the tax return or at the
time of providing information to the tax withholding agent. There are also other conditions for enjoying such reduced withholding tax
rate according to other relevant tax rules&#160;and regulations. Accordingly, Jiangsu Yanggu may be able to enjoy the 5% withholding tax
rate for the dividends it receives from the WFOE, if it satisfies the conditions prescribed under Circular 81 and other relevant tax rules&#160;and
regulations, and obtains the approvals as required under the Administrative Measures. However, according to Circular 81, if the relevant
tax authorities consider the transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant
tax authorities may adjust the favorable withholding tax in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->100<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Hong Kong Taxation </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The taxation of income and capital gains of holders
of ordinary shares is subject to the laws and practices of Hong Kong and of jurisdictions in which holders of ordinary shares are resident
or otherwise subject to tax. The following summary of certain relevant taxation provisions under Hong Kong law is based on current law
and practice, is subject to changes therein and does not constitute legal or tax advice. The discussion does not deal with all possible
tax consequences relating to an investment in the ordinary shares. Accordingly, each prospective investor (particularly those subject
to special tax rules, such as banks, dealers, insurance companies, tax-exempt entities and holders of 10% or more of our voting capital
stock) should consult its own tax advisor regarding the tax consequences of an investment in the ordinary shares. There is no reciprocal
tax treaty in effect between Hong Kong and the United States.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Tax on Dividends </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the current practices of the Hong Kong Inland
Revenue Department, no tax is payable in Hong Kong in respect of dividends paid by us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Profits Tax </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No tax is imposed in Hong Kong in respect of capital
gains from the sale of property (such as the ordinary shares). Trading gains from the sale of property by persons carrying on a trade,
profession or business in Hong Kong where such gains are derived from or arise in Hong Kong from such trade, profession or business will
be chargeable to Hong Kong profits tax, which is currently imposed at the rate of 16.5% and 15% on corporations and unincorporated businesses,
respectively, and at a maximum rate of 15% on individuals. Liability for Hong Kong profits tax may thus arise in respect of trading gains
from sales of ordinary shares realized by persons carrying on a business or trading or dealing in securities in Hong Kong.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Stamp Duty </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Hong Kong stamp duty, currently charged at the
rate of HK$1 per HK$1,000 or part thereof on the higher of the consideration for or the value of the ordinary shares, will be payable
by the purchaser on every purchase and by the seller on every sale of ordinary shares (i.e., a total of HK$2 per HK$1,000 or part thereof
is currently payable on a typical sale and purchase transaction involving ordinary shares). In addition, a fixed duty of HK$5 is currently
payable on any instrument of transfer of ordinary shares. If one of the parties to the sale is a non-Hong Kong resident and does not pay
the required stamp duty, the duty not paid will be assessed on the instrument of transfer (if any) and the transferee will be liable for
payment of such duty. No Hong Kong stamp duty is payable upon the transfer of ordinary shares outside Hong Kong.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><i>Estate Duty </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Revenue (Abolition of Estate Duty) Ordinance
2005 came into effect on February&#160;11, 2006 in Hong Kong. No Hong Kong estate duty is payable and no estate duty clearance papers
are needed for an application for a grant of representation in respect of holders of ordinary shares whose death occurs on or after February&#160;11,
2006.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->101<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>United States Federal Income Tax Considerations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a discussion of United States
federal income tax considerations relating to the acquisition, ownership, and disposition of our ordinary shares by a U.S. Holder, as
defined below, that acquires our ordinary shares and holds our ordinary shares as &#8220;capital assets&#8221; (generally, property held
for investment) under the United States Internal Revenue Code of 1986, as amended (the &#8220;Code&#8221;). This discussion is based upon
existing United States federal income tax law, which is subject to differing interpretations or change, possibly with retroactive effect.
No ruling has been sought from the Internal Revenue Service (the &#8220;IRS&#8221;) with respect to any United States federal income tax
consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion
does not address all aspects of United States federal income taxation that may be important to particular investors in light of their
individual circumstances, including investors subject to special tax rules (such as, for example, certain financial institutions, insurance
companies, regulated investment companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market
treatment, partnerships and their partners, tax-exempt organizations (including private foundations)), investors who are not U.S. Holders,
investors that own (directly, indirectly, or constructively) 10% or more of our voting stock, investors that hold their ordinary shares
as part of a straddle, hedge, conversion, constructive sale or other integrated transaction), or investors that have a functional currency
other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition,
this discussion does not address any tax laws other than the United States federal income tax laws, including any state, local, alternative
minimum tax or non-United States tax considerations, or the Medicare tax. Each potential investor is urged to consult its tax advisor
regarding the United States federal, state, local and non-United States income and other tax considerations of an investment in our ordinary
shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>General</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For purposes of this discussion, a &#8220;U.S.
Holder&#8221; is a beneficial owner of our ordinary shares that is, for United States federal income tax purposes, (i) an individual who
is a citizen or treated as a tax resident of the United States, (ii) a corporation (or other entity treated as a corporation for United
States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District
of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless
of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which
has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise
elected to be treated as a United States person under the Code.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If a partnership (or other entity treated as a
partnership for United States federal income tax purposes) is a beneficial owner of our ordinary shares, the tax treatment of a partner
in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership
holding our ordinary shares are urged to consult their tax advisors regarding an investment in our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The discussion set forth below is addressed only
to U.S. Holders that purchase ordinary shares. Prospective purchasers are urged to consult their own tax advisors about the application
of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences
to them of the purchase, ownership and disposition of our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Taxation of Dividends and Other Distributions
on our Ordinary Shares</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subject to the passive foreign investment company
rules discussed below, the gross amount of distributions made by us to you with respect to the ordinary shares (including the amount of
any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but
only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal
income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction
allowed to corporations in respect of dividends received from other U.S. corporations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->102<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With respect to non-corporate U.S. Holders, including
individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that
(1) the ordinary shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits
of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a
passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable
year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and the Cayman
Islands, clause (1) above can be satisfied only if the ordinary shares are readily tradable on an established securities market in the
United States. Under U.S. Internal Revenue Service authority, ordinary shares are considered for purpose of clause (1) above to be readily
tradable on an established securities market in the United States if they are listed on certain exchanges, which presently include the
Nasdaq. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our
ordinary shares, including the effects of any change in law after the date of this report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the extent that the amount of the distribution
exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated
first as a tax-free return of your tax basis in your ordinary shares, and to the extent the amount of the distribution exceeds your tax
basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax
principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise
be treated as a non-taxable return of capital or as capital gain under the rules described above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Taxation of Dispositions of Ordinary Shares</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subject to the passive foreign investment company
rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to
the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the ordinary shares.
The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held
the ordinary shares for more than one year, you may be eligible for reduced tax rates on any such capital gains. The deductibility of
capital losses is subject to limitations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Passive Foreign Investment Company (&#8220;PFIC&#8221;)</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A non-U.S. corporation is considered a PFIC for
any taxable year if either:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">at least 75% of its gross income
for such taxable year is passive income; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">at least 50% of the value of
its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or
are held for the production of passive income (the &#8220;asset test&#8221;).</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Passive income generally includes dividends, interest,
rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition
of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income
of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining the value and composition
of our assets for purposes of the PFIC asset test, (1) the cash we hold will generally be considered to be held for the production of
passive income and (2) the value of our assets must be determined based on the market value of our ordinary shares from time to time,
which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets (including the cash raised
in any offering) on any particular quarterly testing date for purposes of the asset test.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 108; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->103<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We must make a separate determination each year
as to whether we are a PFIC. Depending on the amount of cash we hold, together with any other assets held for the production of passive
income, it is possible that, for our current taxable year or for any subsequent taxable year, at least 50% of our assets may be assets
held for the production of passive income. We will make this determination following the end of any particular tax year. Although the
law in this regard is unclear, we treat the consolidated variable interest entity, as being owned by us for United States federal income
tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially
all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements. In
particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our
ordinary shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will
depend in large part on the market price of our ordinary shares and the amount of cash we hold. Accordingly, fluctuations in the market
price of the ordinary shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in
several respects. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above,
the determination of the value of our assets will depend upon material facts (including the market price of our ordinary shares from time
to time that may not be within our control). If we are a PFIC for any year during which you hold ordinary shares, the shares will continue
to be treated as stock in a PFIC for all succeeding years during which you hold ordinary shares. However, if we cease to be a PFIC and
you did not previously make a timely &#8220;mark-to-market&#8221; election as described below, you may avoid some of the adverse effects
of the PFIC regime by making a &#8220;purging election&#8221; (as described below) with respect to the ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we are a PFIC for your taxable year(s) during
which you hold ordinary shares, you will be subject to special tax rules with respect to any &#8220;excess distribution&#8221; that you
receive and any gain you realize from a sale or other disposition (including a pledge) of the ordinary shares, unless you make a &#8220;mark-to-market&#8221;
election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions
you received during the shorter of the three preceding taxable years or your holding period for the ordinary shares will be treated as
an excess distribution. Under these special tax rules:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the excess distribution or gain
will be allocated ratably over your holding period for the ordinary shares;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the amount allocated to your
current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC,
will be treated as ordinary income, and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the amount allocated to each
of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable
to underpayments of tax will be imposed on the resulting tax attributable to each such year.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The tax liability for amounts allocated to years
prior to the year of disposition or &#8220;excess distribution&#8221; cannot be offset by any net operating losses for such years, and
gains (but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold the ordinary shares
as capital assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A U.S. Holder of &#8220;marketable stock&#8221;
(as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you
make a mark-to-market election for first taxable year which you hold (or are deemed to hold) ordinary shares and for which we are determined
to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the ordinary
shares as of the close of such taxable year over your adjusted basis in such ordinary shares, which excess will be treated as ordinary
income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the ordinary shares over
their fair market value as of the close of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market
gains on the ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election,
as well as gain on the actual sale or other disposition of the ordinary shares, are treated as ordinary income. Ordinary loss treatment
also applies to any loss realized on the actual sale or disposition of the ordinary shares, to the extent that the amount of such loss
does not exceed the net mark-to-market gains previously included for such ordinary shares. Your basis in the ordinary shares will be adjusted
to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by
corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified
dividend income discussed above under &#8220;&#8212; <i>Taxation of Dividends and Other Distributions on our ordinary shares</i>&#8221;
generally would not apply.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->104<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The mark-to-market election is available only
for &#8220;marketable stock&#8221;, which is stock that is traded in other than de minimis quantities on at least 15 days during each
calendar quarter (&#8220;regularly traded&#8221;) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations),
including Nasdaq. If the ordinary shares are regularly traded on Nasdaq and if you are a holder of ordinary shares, the mark-to-market
election would be available to you were we to be or become a PFIC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Alternatively, a U.S. Holder of stock in a PFIC
may make a &#8220;qualified electing fund&#8221; election with respect to such PFIC to elect out of the tax treatment discussed above.
A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable
year such holder&#8217;s pro rata share of the corporation&#8217;s earnings and profits for the taxable year. However, the qualified electing
fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as
required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable
you to make a qualified electing fund election.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you hold ordinary shares in any taxable year
in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual
information regarding such ordinary shares, including regarding distributions received on the ordinary shares and any gain realized on
the disposition of the ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you do not make a timely &#8220;mark-to-market&#8221;
election (as described above), and if we were a PFIC at any time during the period you hold our ordinary shares, then such ordinary shares
will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a &#8220;purging
election&#8221; for the year we cease to be a PFIC. A &#8220;purging election&#8221; creates a deemed sale of such ordinary shares at
their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election
will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result
of the purging election, you will have a new basis (equal to the fair market value of the ordinary shares on the last day of the last
year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your ordinary
shares for tax purposes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You are urged to consult your tax advisors regarding
the application of the PFIC rules to your investment in our ordinary shares and the elections discussed above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Information Reporting and Backup Withholding</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Payments of dividends
and sales proceeds that are made within the United States or through certain U.S.-related intermediaries may be subject to information
reporting and backup withholding, unless (i) the U.S. Holder is a corporation or other &#8220;exempt recipient&#8221; or (ii) in the case
of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup
withholding. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be
allowed as a credit against the U.S. Holder&#8217;s U.S. federal income tax liability and may entitle it to a refund, provided that the
required information is timely furnished to the IRS.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b style="font-style: normal; font-weight: normal"><i>Information with respect to foreign
financial assets</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Certain U.S. Holders
who are individuals (and, under proposed regulations, certain entities) may be required to report information relating to an interest
in our ordinary shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain
U.S. financial institutions). U.S. Holders should consult their tax advisors regarding the effect, if any, of this legislation on their
ownership and disposition of our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->105<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>10.F. Dividends and Paying Agents</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>10.G. Statement by Experts</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>10.H. Documents on Display</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are subject to periodic reporting and other
informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports,
including annual reports on Form 20-F,&#160;and other information with the SEC. All information filed with the SEC can be obtained over
the internet at the SEC&#8217;s website at&#160;www.sec.gov or inspected and copied at the public reference facilities maintained by the
SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at www.sec.gov that contains reports and other information regarding
registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules
under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section&#160;16 of the Exchange Act.
You may also visit us on the world wide web at http://www.ocgroup.hk. However, information contained on our website does not constitute
a part of this annual report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>10.I. Subsidiary Information</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>10.J.
Annual Report to Security Holders</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 0pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 0pt; ">Not applicable.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><div><a id="a_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Liquidity risk </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are exposed to liquidity risk, which is the
risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity
risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to other
financial institutions to obtain short-term funding to meet the liquidity shortage.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Inflation risk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inflationary factors, such as increases in personnel
and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial
position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain
current levels of gross margin and operating expenses as a percentage of sales revenue if the revenues from our products do not increase
with such increased costs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Interest rate risk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our exposure to interest rate risk primarily relates
to the interest rate that our deposited cash can earn. Interest-earning instruments carry a degree of interest rate risk. We have not
been exposed to material risks due to changes in interest rates. An increase in interest rates, however, may raise the cost of any debt
we incur in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Foreign currency translation and transaction</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our operating transactions and assets and liabilities
are mainly denominated in RMB. RMB is not freely convertible into foreign currencies for capital account transactions. The value of RMB
against the U.S.&#160;dollar and other currencies is affected by, among other things, changes in China&#8217;s political and economic
conditions and China&#8217;s foreign exchange policies. To date, we have not entered into any hedging transactions in an effort to reduce
our exposure to foreign currency exchange risk.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><div><a id="a_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt"><b>A. Debt Securities</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt"><b>B. Warrants and Rights</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt"><b>C. Other Securities</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="a_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PART II</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="a_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><div><a id="a_019"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See &#8220;Item 10&#8212;Additional Information&#8212;B.
Memorandum and Articles of Association&#8212;Common Shares&#8221; for a description of the rights of securities holders, which remain
unchanged.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Use of Proceeds</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following &#8220;Use of Proceeds&#8221; information
relates to the registration statement on Form F-1,&#160;as amended (File number:&#160;333-234654)&#160;in relation to the initial public
offering of 5,065,000 ordinary shares of the Company. Our initial public offering closed in December 2020. ViewTrade Securities Inc. was
the representative of the underwriters for our initial public offering. Counting in the ordinary shares sold upon the partial exercise
of the over-allotment option by our underwriters, we offered and sold 5,124,400 ordinary shares and received net proceeds of approximately
US$17.3&#160;million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The registration
statement was declared effective by the SEC on December 1, 2020. The total expenses incurred for our Company&#8217;s account in connection
with our initial public offering was approximately US$3.2&#160;million, which included approximately US$1.4&#160;million in underwriting
discounts and commissions for the initial public offering and approximately US$1.8&#160;million in other costs and expenses for our initial
public offering. None of the transaction expenses included payments to directors or officers of our Company or their associates, persons
owning more than 10% or more of our equity securities or our affiliates. None of the net proceeds we received from the initial public
offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our
equity securities or our affiliates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the period from the date that the F-1 Registration
Statement was declared effective by the SEC to December&#160;31, 2022, we used approximately US$2.7 million of the proceeds received
from the initial public offering for the payment for upgrading information technology infrastructure, software, app development and system
for our online platforms. There is no material change in the use of proceeds as described in the registration statement. We still intend
to use the proceeds from our initial public offering as disclosed in our registration statement on Form&#160;F-1.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><div><a id="a_020"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 15. CONTROLS AND PROCEDURES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Evaluation of Disclosure Controls and Procedures</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our management, with the participation of our
chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by Rule
13a-15(b) under the Exchange Act. Based upon that evaluation, our management has concluded that, due to the material weaknesses identified
below, as of December 31, 2022, our disclosure controls and procedures were not effective in ensuring that the information required to
be disclosed by us in the reports that we file or submit under the Exchange Act was recorded, processed, summarized and reported, within
the time periods specified in the SEC&#8217;s rules and forms, and that the information required to be disclosed by us in the reports
that we file or submit under the Exchange Act was accumulated and communicated to our management, including our chief executive officer
and chief financial officer, to allow timely decisions regarding required disclosure.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Management&#8217;s Annual Report on Internal
Control Over Financial Reporting</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as defined in Rules&#160;13a-15 (f) under the Exchange Act. As required by Section 404 of the
Sarbanes-Oxley Act and related rules as promulgated by the SEC, our management, with the participation of our chief executive officer
and chief financial officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022, based
on criteria established in the framework in Internal Control&#8212;Integrated Framework (2013)&#160;issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial
reporting was not effective as of December&#160;31, 2022.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies and procedures may deteriorate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the course of management&#8217;s preparation
and our independent registered public accounting firm&#8217;s auditing of our consolidated financial statements as of and for the year
ended December&#160;31, 2022, we and our independent registered public accounting firm identified one material weakness in our internal
control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a &#8220;material
weakness&#8221; is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis,
in accordance with the standards established by the Public Company Accounting Oversight Board of the United States.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The material weakness identified relates to our
lack of in-house accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to prepare and review financial
statements and related disclosures in accordance with U.S. GAAP and applicable requirements by SEC. Due to the foregoing material weakness,
management concluded that as of December 31, 2022, our internal control over financial reporting was ineffective.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To remedy our identified material weakness identified
to date, we have hired external accountants who have extensive experience in US GAAP and SEC reporting to help us in the preparation of
our financial reports, and we also plan to undertake steps to strengthen our internal control over financial reporting, including (i)
recruiting more financial reporting and accounting personnel who have adequate U.S. GAAP and SEC reporting knowledge; and (ii) implementing
regular and continuous U.S. GAAP and SEC accounting and financial reporting training programs for our accounting and financial personnel.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">However, we cannot assure you that we will remediate
our material weakness in a timely manner, or at all. See &#8220;<i>Item 3. Key Information&#8212;Risk Factors&#8212;Risks Related to Our
Business&#8212;If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial
statements or comply with applicable regulations could be impaired</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-align: justify; margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">As a company with less than US$1.235 billion
in revenue for our last fiscal year, we qualify as an &#8220;emerging growth company&#8221; pursuant to the JOBS Act. An emerging
growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to
public companies. These provisions include exemption from the auditor attestation requirement under Section&#160;404 of the
Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company&#8217;s internal control over financial reporting.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Attestation Report of the Registered Public
Accounting Firm</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a Company with less than $1.235 billion in revenue
for our last fiscal year, we qualify as an &#8220;emerging growth company&#8221; pursuant to the JOBS Act. An emerging growth company
may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies.
These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, in the
assessment of the emerging growth company&#8217;s internal control over financial reporting. This annual report on Form 20-F does not
include an attestation report of our registered public accounting firm because we are an emerging growth company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Changes in Internal Control</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other than as described above, there were no changes
in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><div><a id="a_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM&#160;16.A.&#160;AUDIT&#160;COMMITTEE FINANCIAL EXPERT&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our board of directors has determined that Mr.&#160;Nelson
Wong, Chairman of our audit committee and an independent director (under the standards set forth in Nasdaq Stock Market Rule 5605(a)(2)
and&#160;Rule&#160;10A-3&#160;under&#160;the Exchange Act), is an audit committee financial expert.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="a_022"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM&#160;16.B.&#160;CODE&#160;OF ETHICS&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our board of directors has adopted a code of ethics
that applies to all of the directors, officers and employees of our company. We have filed our code of business conduct and ethics as
Exhibit 99.1 of our registration statement on Form F-1 (File Number: 333-234654), as amended, initially filed with the SEC on November
12, 2019, and a copy is available to any shareholder upon request. We have also posted the code on our corporate website at&#160;www.ocgroup.hk.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="a_023"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM&#160;16.C.&#160;PRINCIPAL ACCOUNTANT FEES AND SERVICES&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth the aggregate fees
by categories specified below in connection with certain professional services rendered by Wei Wei &amp; Co., LLP, our independent registered
public accounting firm, for the periods indicated.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%">Audit fees(1)</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">160,000</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Audit related fees(2)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">TOTAL</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">160,000</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">&#8220;Audit fees&#8221; means
the aggregate fees billed for each of the fiscal years for professional services rendered by our principal accountant for the audit of
our annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory
filings or engagements for those fiscal years.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">&#8220;Audit related fees&#8221;
means the aggregate fees billed for each of the fiscal years for assurance and related services by our principal accountant that are
reasonably related to the performance of the audit or review of our financial statements and are not reported under paragraph (1).</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">&#8220;Tax Fees&#8221; represents
the aggregate fees billed in each of the fiscal years listed for the professional tax services rendered by our principal auditors.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(4)</span></td><td style="text-align: justify"><span style="font-size: 10pt">&#8220;All Other Fees&#8221; represents
the aggregate fees billed in each of the fiscal years listed for services rendered by our principal auditors other than services reported
under &#8220;Audit fees,&#8221; &#8220;Audit-related fees&#8221; and &#8220;Tax fees.&#8221;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The policy of our audit committee and our board
of directors is to pre-approve all audit and non-audit services provided by our principal auditors, including audit services, audit-related
services, and other services as described above, other than those for de minimis services which are approved by the audit committee prior
to the completion of the services.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 115; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->110<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><div><a id="a_025"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Neither we nor any &#8220;affiliated purchaser,&#8221;
as defined in Rule&#160;10b-18(a)(3)&#160;of the Exchange Act, purchased any of our equity securities during the period covered by this
annual report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><div><a id="a_026"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16F. CHANGE IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;&#160;</b></p><div>

</div><div><a id="a_027"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16G. CORPORATE GOVERNANCE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a Cayman Islands exempted company listed on
the Nasdaq Capital Market, or Nasdaq, we are subject to the Nasdaq corporate governance requirements. However, Nasdaq rules permit a foreign
private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the
Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance requirements. Currently, we follow
our home country practice in lieu of the provisions under Rule 5620(a), Rule 5635(a)(1), Rule 5635(b), Rule 5635(c) and Rule 5635(d) of
the NASDAQ Stock Market Marketplace Rules (the &#8220;Rules&#8221;). Rule 5620(a) requires that the Company to hold an annual meeting of
shareholders no later than one year after the end of the Company&#8217;s fiscal year-end; Rule 5635(a)(1) of the Rules requires shareholder
approval for the issuance of securities in connection with the acquisition of the stock or assets of another company; Rule 5635(b) of
the Rules requires shareholder approval for the issuance of securities when the issuance will result in a change of control of the company;
Rule 5635(c) of the Rules requires shareholder approval for share incentive plans; and Rule 5635(d) of the Rules requires shareholder
approval for the issuance of securities, other than in a public offering, equal to 20% or more of the voting power outstanding before
the issuance for less than the greater of book or market value of the stock. The corporate governance practice in our home country, the
Cayman Islands, does not require the Company to follow or comply with the requirements of Rule 5620(a), Rule 5635(a)(1), Rule 5635(b),
Rule 5635(c) and Rule 5635(d). If we choose to follow additional home country practice in the future, our shareholders may be afforded
less protection than they would otherwise enjoy under the Nasdaq corporate governance requirements applicable to U.S. domestic issuers.
See &#8220;<i>Item 3. Key Information &#8212; D. Risk Factors&#8212; Risks Related to Our Ordinary Shares&#8212;Because we are a foreign
private issuer and are exempt from certain NASDAQ corporate governance standards applicable to U.S. issuers, you may have less protection
than you would have if we were a domestic issuer.</i>&#8221;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="a_028"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16H. MINE SAFETY DISCLOSURE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="a_029"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16I.&#160;DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><!-- Field: Page; Sequence: 116; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->111<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_030"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PART III</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="a_031"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 17. FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have elected to provide financial statements
pursuant to Item 18.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_032"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 18. FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The consolidated financial statements and related
notes required by this item are contained on pages F-1 through F-36.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="a_033"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 19. EXHIBITS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="border-bottom: black 1.5pt solid; width: 9%; text-align: justify"><span style="font-size: 10pt"><b>Exhibit&#160;No.</b></span></td>
    <td style="width: 1%; text-align: justify">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 90%; text-align: justify"><span style="font-size: 10pt"><b>Description</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">1.1</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex3-2_oriental.htm">Second Amended and Restated Memorandum of Association (incorporated herein by reference to Exhibit 3.2 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">1.2</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex3-3_oriental.htm">Second Amended and Restated Articles of Association (incorporated herein by reference to Exhibit 3.3 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">2.1</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020004905/ff12019a2ex4-1_oriental.htm">Specimen certificate evidencing ordinary shares (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">2.2*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex2-2_oriental.htm"><span style="font-size: 10pt">Description Of Securities</span></a></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.1</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020010783/ea120978ex10-1_orientalcul.htm"><span style="font-size: 10pt">Sale and Purchase Agreement in Respect of 100% of Issued Share Capital of HKDAEX Limited by and between HKFAEX Group Limited and Oriental Culture Holding LTD dated May 7, 2019 (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</span></a></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.2 </span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020010783/ea120978ex10-2_orientalcul.htm">Sale and Purchase Agreement in Respect of 100% of Issued Share Capital of China International Assets and Equity of Artworks Exchange Limited by and between HKFAEX Group Limited and Oriental Culture Holding LTD dated May 7, 2019 (incorporated herein by reference to Exhibit 10.2 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)**</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.3</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-1_oriental.htm">Technical Consultation and Service Agreement, by and between Nanjing Rongke Business Consulting Service Co., Ltd. and Jiangsu Yanggu Culture Development Co., Ltd. dated May 8, 2019 &#160;(incorporated herein by reference to Exhibit 10.3 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.4</span></td>
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    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-2_oriental.htm">Equity Pledge Agreement, by and among Nanjing Rongke Business Consulting Service Co., Ltd., Jiangsu Yanggu Culture Development Co., Ltd. and Jiangsu Yanggu Culture Development Co., Ltd.&#8217;s shareholders dated May 8, 2019 (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.5</span></td>
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    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-3_oriental.htm">Equity Option Agreement, by and among Nanjing Rongke Business Consulting Service Co., Ltd., Jiangsu Yanggu Culture Development Co., Ltd. and Jiangsu Yanggu Culture Development Co., Ltd.&#8217;s shareholders dated May 8, 2019 (incorporated herein by reference to Exhibit 10.5 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.6</span></td>
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    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-4_oriental.htm">Voting Rights Proxy &#160;and Financial Supporting Agreement, by and among Nanjing Rongke Business Consulting Service Co., Ltd., Jiangsu Yanggu Culture Development Co., Ltd. and Jiangsu Yanggu Culture Development Co., Ltd.&#8217;s shareholders dated May 8, 2019 (incorporated herein by reference to Exhibit 10.6 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.7</span></td>
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    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020006314/ea119494ex10-5_oriental.htm">Employment Agreement by and between the Registrant and Yi Shao dated May 10, 2019 (incorporated herein by reference to Exhibit 10.7 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020006314/ea119494ex10-6_oriental.htm">Employment Agreement by and between the Registrant and Lijia Ni dated May 10, 2019 (incorporated herein by reference to Exhibit 10.8 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-6_oriental.htm">Form of Indemnification Agreement by and between the Registrant and executive officers and directors of the Registrant (incorporated herein by reference to Exhibit 10.9 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="width: 9%; text-align: justify"><span style="font-size: 10pt">4.10</span></td>
    <td style="width: 1%; text-align: justify">&#160;</td>
    <td style="width: 90%; text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390020033290/ea128607ex10-10_orientalcult.htm">Form of Indemnification Escrow Agreement (incorporated herein by reference to Exhibit 10.10 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.11</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390020006314/ea119494ex10-9_oriental.htm">Independent Director Agreement by and between the Registrant and Y. Tristan Kuo dated November 6, 2019 (incorporated herein by reference to Exhibit 10.11 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.12</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390020006314/ea119494ex10-10_oriental.htm">Independent Director Agreement by and between the Registrant and Bennet P. Tchaikovsky dated January 15, 2020 (incorporated herein by reference to Exhibit 10.12 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.13</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390020006314/ea119494ex10-11_oriental.htm">Independent Director Agreement by and between the Registrant and Xiaobing Liu dated May 10, 2019 (incorporated herein by reference to Exhibit 10.13 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.14</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390020006314/ea119494ex10-12_oriental.htm">Director Agreement by and between the Registrant and Mun Wah Wan dated March 6, 2020 (incorporated herein by reference to Exhibit 10.14 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.15</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390020006314/ea119494ex10-13_oriental.htm">Director Agreement by and between the Registrant and Yi Shao dated March 6, 2020 (incorporated herein by reference to Exhibit 10.15 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.16</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-10_oriental.htm">Website Advertising Space Leasing Agreement by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. (incorporated herein by reference to Exhibit 10.17 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.17</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-11_oriental.htm">Technical Maintenance Services Contract by and between Hunan Huaqiang Artwork Trading Center Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. (incorporated herein by reference to Exhibit 10.18 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.18</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-12_oriental.htm">Technical Maintenance Services Contract by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. (incorporated herein by reference to Exhibit 10.19 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.19</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-13_oriental.htm">Technical Maintenance Services Contract by and between Nanjing Jinwang Art Purchase E-commerce Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2018 (incorporated herein by reference to Exhibit 10.20 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.20</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-14_oriental.htm">Cooperation Agreement and Amendment to Cooperation Agreement by and between Kashi Dongfang Cangpin Culture Development Co., Ltd. and Zhongcang Warehouse Co., Ltd. dated September 1, 2018 and September 15, 2018 (incorporated herein by reference to Exhibit 10.21 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.21</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-16_oriental.htm">Technical Maintenance Services Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2018 (incorporated herein by reference to Exhibit 10.23 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="margin: 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="width: 9%; text-align: justify"><span style="font-size: 10pt">4.22</span></td>
    <td style="width: 1%; text-align: justify">&#160;</td>
    <td style="width: 90%; text-align: justify"><span style="font-size: 10pt"><span><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390019022984/ff12019ex10-17_oriental.htm">Technical Maintenance Services Contract by and between Jinling Cultural Property Rights Exchange Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated October 1, 2018 (incorporated herein by reference to Exhibit 10.24 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.23</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020000786/ff12019a1ex10-18_oriental.htm">Administration Services Agreement by and between HKDAEx Limited and HKFAEx Limited dated August 1, 2018 (incorporated herein by reference to Exhibit 10.25 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)**</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.24</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020000786/ff12019a1ex10-19_oriental.htm">Office Premises Use Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. dated January 1, 2020 (incorporated herein by reference to Exhibit 10.26 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.25</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020035971/ea129532ex10-29_orientalcult.htm">Cooperation Agreement by and between China International Assets and Equity of Artworks Exchange Limited and Nanjing Jinwang Art Purchase E-commerce Co., Ltd. on January 1, 2018 (incorporated herein by reference to Exhibit 10.29 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.26</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020035971/ea129532ex10-30_orientalcult.htm">Cooperation Agreement by and between HKDAEx Limited and Nanjing Jinwang Art Purchase E-commerce Co., Ltd. on March 15, 2019 (incorporated herein by reference to Exhibit 10.30 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.27</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390020035971/ea129532ex10-31_orientalcult.htm">Product Consulting Service Agreement by and between Nanjing Pusideng Information Technology Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. in 2019 (incorporated herein by reference to Exhibit 10.31 to the registration statement on Form&#160;F-1&#160;(File No.&#160;333-234654),&#160;as amended, initially filed with the SEC on November&#160;12, 2019)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.28</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021023866/f20f2020ex4-33_oriental.htm">Renewal of Employment Agreement by and between the Company and Yi Shao (incorporated herein by reference to Exhibit 4.33 to Form 20-F filed with the SEC on April&#160;30, 2021)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.29 </span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021023866/f20f2020ex4-34_oriental.htm">Renewal of Employment Agreement by and between the Company and Lijia Ni (incorporated herein by reference to Exhibit 4.34 to Form&#160;20-F filed with the SEC on April&#160;30, 2021)</a></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.30</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021023866/f20f2020ex4-35_oriental.htm">Office Premises Use Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. dated January 1, 2021 (incorporated herein by reference to Exhibit 4.35 to Form&#160;20-F filed with the SEC on April&#160;30, 2021)</a></span></td></tr>

<tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.31 </span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021005811/ea134309ex10-1_oriental.htm"><span style="font-size: 10pt">Form of Amended and Restated Equity Pledge Agreement by and among Nanjing Rongke, Jiangsu Yanggu &#160;and shareholders of Jiangsu Yanggu (incorporated herein by reference to Exhibit 10.1 to Form&#160;6-K&#160;filed with the SEC on February&#160;1, 2021)</span></a></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-size: 10pt">4.32 </span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021005811/ea134309ex10-2_oriental.htm"><span style="font-size: 10pt">Form of Amended and Restated Equity Option Agreement by and among Nanjing Rongke, Jiangsu Yanggu &#160;and shareholders of Jiangsu Yanggu (incorporated herein by reference to Exhibit 10.2 to Form&#160;6-K&#160;filed with the SEC on February&#160;1, 2021)</span></a></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">4.33</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021005811/ea134309ex10-3_oriental.htm"><span style="font-size: 10pt">Form of Amended and Restated Voting Rights Proxy and Financial Supporting Agreement by and among Nanjing Rongke, Jiangsu Yanggu &#160;and shareholders of Jiangsu Yanggu (incorporated herein by reference to Exhibit 10.3 to Form&#160;6-K&#160;filed with the SEC on February&#160;1, 2021)</span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-size: 10pt">4.34</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021023866/f20f2020ex4-39_oriental.htm"><span style="font-size: 10pt">Employment Agreement by and between the Company and Yi Shao dated April 27, 2021(incorporated herein by reference to Exhibit 4.39 to Form&#160;20-F filed with the SEC on April&#160;30, 2021)</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify"><span style="font-size: 10pt">4.35</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021023866/f20f2020ex4-40_oriental.htm"><span style="font-size: 10pt">Employment Agreement by and between the Company and Lijia Ni dated April 27, 2021(incorporated herein by reference to Exhibit 4.40 to Form&#160;20-F filed with the SEC on April&#160;30, 2021)</span></a></td></tr>

<tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.36</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390022022923/f20f2021ex4-36_oriental.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Technical Maintenance Services Contract by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. (incorporated herein by reference to Exhibit 4.36 to Form 20-F filed with the SEC on May 2, 2022)</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.37</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390022022923/f20f2021ex4-37_oriental.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Technical Maintenance Services Contract by and between Jinling Cultural Property Rights Exchange Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2021. (incorporated herein by reference to Exhibit 4.37 to Form 20-F filed with the SEC on May 2, 2022)</span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.38</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390022022923/f20f2021ex4-38_oriental.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Technical Maintenance Services Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2021. (incorporated herein by reference to Exhibit 4.38 to Form 20-F filed with the SEC on May 2, 2022)</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.39</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390022022923/f20f2021ex4-39_oriental.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Technical Maintenance Services Contract by and between Hunan Huaqiang Artwork Trading Center Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2021. (incorporated herein by reference to Exhibit 4.39 to Form 20-F filed with the SEC on May 2, 2022)</span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.40</span></td>
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.41</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1776067/000121390022022923/f20f2021ex4-41_oriental.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Preowned Property Purchase and Sale Agreement by and among Nanjing Z-COM Wireless Communication Technology Co., Ltd., Kashi Longrui Business Management Service Co., Ltd., and Kashi Dongfang Cangpin Culture Development Co., Ltd. on November 4, 2021. (incorporated herein by reference to Exhibit 4.41 to Form 20-F filed with the SEC on May 2, 2022)</span></a></td></tr>
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</div><p style="margin: 0">&#160;</p><div>

</div><p style="margin: 0"></p><div>

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</div><p style="margin: 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td style="text-align: justify; width: 90%"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021057752/ea149947ex99-1_oriental.htm"><span style="font-size: 10pt">Oriental Culture Holding LTD 2021 Omnibus Equity Plan (incorporated herein by reference to Annex A of Exhibit 99.1 to the Form&#160;6-K, filed with the SEC on November 9, 2021)</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify"><span style="font-size: 10pt">4.43</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021064090/ea151891ex99-1_orientalcul.htm"><span style="font-size: 10pt">Form of Securities Purchase Agreement (incorporated herein by reference to Exhibit 99.1 to Form&#160;6-K filed with the SEC on December 8, 2021)</span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-size: 10pt">4.44</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1776067/000121390021064090/ea151891ex99-2_orientalcul.htm"><span style="font-size: 10pt">Form of Warrants (incorporated herein by reference to Exhibit 99.2 to Form&#160;6-K filed with the SEC on December 8, 2021)</span></a></td></tr>

<tr style="vertical-align: top; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.45</span></td>
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  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.46</span></td>
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<tr style="vertical-align: top; ">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex4-47_oriental.htm">Technical Maintenance Services Contract by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2022</a></td></tr>
<tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex4-48_oriental.htm">Office Premises Use Contract by and between Nanjing Cultural and Artwork Property Exchange Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. dated December 31, 2022</a></td></tr>
<tr style="vertical-align: top; ">
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    <td>&#160;</td>
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  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
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  <tr style="vertical-align: top; ">
    <td><span style="font-size: 10pt">13.1*</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex13-1_oriental.htm"><span style="font-size: 10pt">CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
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  <tr style="vertical-align: top; ">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex15-1_oriental.htm"><span style="font-size: 10pt">Consent of Jiangsu Taikun Law Firm </span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex15-2_oriental.htm"><span style="font-size: 10pt">Consent of Wei Wei &amp; Co., LLP</span></a></td></tr>
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    <td><span style="font-size: 10pt">101.INS</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">Inline XBRL Instance Document *</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
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  <tr style="vertical-align: top; ">
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    <td>&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">Inline XBRL Taxonomy Extension Calculation Linkbase Document *</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
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  <tr style="vertical-align: top; ">
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    <td>&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">Inline XBRL Taxonomy Extension Label Linkbase Document *</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">Inline XBRL Taxonomy Extension Presentation Linkbase Document *</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">Filed as an exhibit hereto.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0.25in"><b>&#160;</b></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->115<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0.25in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SIGNATURES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The registrant hereby certifies that it meets
all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report
on its behalf.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td colspan="2"><span style="font-size: 10pt"><b>Oriental Culture Holding LTD.</b></span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td colspan="2">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">/s/ Yi Shao</span></td></tr>
  <tr style="vertical-align: top">
    <td style="width: 60%">&#160;</td>
    <td style="width: 4%"><span style="font-size: 10pt">Name:&#160; </span></td>
    <td style="width: 36%"><span style="font-size: 10pt">Yi Shao</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Title: </span></td>
    <td><span style="font-size: 10pt">Chief Executive Officer</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">Date: May 1, 2023</span></td>
    <td colspan="2">&#160;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 121; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->116<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>TABLE OF CONTENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: top; width: 90%"><a href="#f_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Report of Independent Registered Public Accounting Firm (PCAOB ID:<ix:nonNumeric contextRef="c0" name="dei:AuditorFirmId">2388</ix:nonNumeric>)</span></a></td> <td style="width: 1%">&#160;</td> <td style="vertical-align: bottom; width: 9%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-2</span></td></tr> <tr> <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Financial Statements</span></td> <td>&#160;</td> <td style="vertical-align: bottom; text-align: center">&#160;</td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><a href="#f_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated balance sheets as of December 31, 2022 and 2021</span></a></td> <td>&#160;</td> <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-3</span></td></tr> <tr> <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><a href="#f_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated statements of income and comprehensive income for the years ended December 31, 2022, 2021 and 2020</span></a></td> <td>&#160;</td> <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-4</span></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><a href="#f_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated statements of changes in shareholders&#8217; equity </span></a></td> <td>&#160;</td> <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-5</span></td></tr> <tr> <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><a href="#f_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated statements of cash flows for the years ended December 31, 2022, 2021 and 2020</span></a></td> <td>&#160;</td> <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-6</span></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#f_006">Notes to Consolidated Financial Statements</a></span></td> <td>&#160;</td> <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-7</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 122; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><img alt="" src="image_004.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_001"></a></div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 13%"><img alt="" src="image_005.jpg"/></td> <td style="width: 2%">&#160;</td> <td style="width: 85%"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Board of Directors and Shareholders</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">of Oriental Culture Holding Ltd.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Opinion on the Financial Statements</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheets of Oriental Culture Holding Ltd. and Subsidiaries (collectively, the &#8220;Company&#8221;) as of December 31, 2022 and
2021, and the related consolidated statements of income and comprehensive income, changes in shareholders&#8217; equity, and cash flows
for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively referred to as the &#8220;consolidated
financial statements&#8221;). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in
the three-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Basis for Opinion</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These consolidated financial statements are the
responsibility of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s consolidated financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s
internal control over financial reporting. Accordingly, we express no such opinion.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">/s/ <ix:nonNumeric contextRef="c0" name="dei:AuditorName">Wei, Wei &amp; Co., LLP</ix:nonNumeric></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">Flushing, New York</ix:nonNumeric></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">May 1, 2023</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have served as the Company&#8217;s auditors since 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>



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</div><div><a id="f_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND
SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>CONSOLIDATED BALANCE SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in"><b>&#160;</b></td><td><b>&#160;</b></td>
    <td colspan="2" style="text-align: center"><b>December&#160;31,</b></td><td><b>&#160;</b></td><td><b>&#160;</b></td>
    <td colspan="2" style="text-align: center"><b>December&#160;31,</b></td><td><b>&#160;</b></td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-2">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.25in">Escrow</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EscrowDeposit" scale="0" unitRef="usd">600,000</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.25in">Certificate of deposit</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-4">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">OTHER LIABILITIES</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">COMMITMENTS AND CONTINGENCIES</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-7">&#160;</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-8">&#160;</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">SHAREHOLDERS&#8217; EQUITY</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>The accompanying notes are an integral
part of these consolidated financial statements.</b></p><div>

</div><!-- Field: Page; Sequence: 124; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND
SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">OPERATING EXPENSES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SellingGeneralAndAdministrativeExpense" scale="0" unitRef="usd">7,668,248</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Other income, net</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherIncome" scale="0" unitRef="usd">268,923</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">INCOME BEFORE INCOME TAXES</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments" scale="0" unitRef="usd">3,240,498</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">PROVISION FOR INCOME TAX</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">OTHER COMPREHENSIVE INCOME (LOSS)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Foreign currency translation adjustment</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>The accompanying notes are an integral
part of these consolidated financial statements.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 125; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS&#8217; EQUITY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>The accompanying notes are an integral
part of these consolidated financial statements.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>CONSOLIDATED STATEMENTS OF CASH FLOWS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> Year Ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" unitRef="usd">3,235,686</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProvisionForDoubtfulAccounts" scale="0" unitRef="usd">117,432</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-117">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-align: left">Common stock issue for services</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IssuanceOfStockAndWarrantsForServicesOrClaims" scale="0" unitRef="usd">464,814</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-118">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-119">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Change in operating assets and liabilities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInReceivables" scale="0" unitRef="usd">200</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInReceivables" scale="0" sign="-" unitRef="usd">779,503</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-align: left">(Increase) in accounts receivable - related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:DecreaseInAccountsReceivableRelatedParty" scale="0" unitRef="usd">22,679</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-120">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-align: left">(Increase) in other receivables and prepaid expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:DecreaseInOtherReceivablesRelatedParty" scale="0" unitRef="usd">3,181,230</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:DecreaseInOtherReceivablesRelatedParty" scale="0" unitRef="usd">874,228</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ocg:DecreaseInOtherReceivablesRelatedParty" scale="0" unitRef="usd">778,684</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-align: left">Decrease (Increase)&#160;&#160;in other receivables - related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsAndOtherReceivables" scale="0" unitRef="usd">2,662,141</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-align: left">Increase (Decrease) in accounts payable</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayableAndAccruedLiabilities" scale="0" sign="-" unitRef="usd">3,246,292</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-align: left">(Decrease) increase in accounts payable - related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:IncreasedecreaseInAccountsPayableRelatedParties" scale="0" unitRef="usd">28,167</ix:nonFraction></p></td><td style="text-align: left"></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:IncreasedecreaseInAccountsPayableRelatedParties" scale="0" sign="-" unitRef="usd">1,241,722</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-align: left">(Decrease) increase in other payables and accrued liabilities</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-align: left">(Decrease) in rent payable - related party</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromRepaymentsOfRelatedPartyDebt" scale="0" sign="-" unitRef="usd">7,294</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-align: left">(Decrease) increase in taxes payable</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">(Decrease) in lease liability</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOperatingLeaseLiability" scale="0" sign="-" unitRef="usd">24,928</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-122">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-123">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Net cash provided by (used in) operating activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">1,211,385</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" unitRef="usd">9,024,887</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" unitRef="usd">6,610,850</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Purchase of short-term investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireShortTermInvestments" scale="0" unitRef="usd">22,152,510</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireShortTermInvestments" scale="0" unitRef="usd">44,921,336</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireShortTermInvestments" scale="0" unitRef="usd">24,422,988</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Proceed from sale of short-term investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromSaleOfEquityMethodInvestments" scale="0" unitRef="usd">23,965,569</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromSaleOfEquityMethodInvestments" scale="0" unitRef="usd">42,453,852</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromSaleOfEquityMethodInvestments" scale="0" unitRef="usd">25,285,807</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Purchase of cost method investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireEquityMethodInvestments" scale="0" unitRef="usd">446,024</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-124">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-125">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in">Purchase of certificate of deposit</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-126">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:PurchaseOfCertificateOfDeposits" scale="0" unitRef="usd">3,136,910</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-127">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Purchase of property, plant and equipment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">708,951</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">9,598,351</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">9,388</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Purchase of intangible assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireIntangibleAssets" scale="0" unitRef="usd">49,613</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireIntangibleAssets" scale="0" unitRef="usd">785,590</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireIntangibleAssets" scale="0" unitRef="usd">9,642</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Refund (payment) of real estate purchase</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-128">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireBusinessesNetOfCashAcquired" scale="0" sign="-" unitRef="usd">13,178,917</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireBusinessesNetOfCashAcquired" scale="0" unitRef="usd">12,613,083</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Net cash provided by (used in) investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" unitRef="usd">608,471</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" sign="-" unitRef="usd">2,809,418</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" sign="-" unitRef="usd">11,769,294</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Proceeds from share subscription</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd">1,000,000</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd">2,000,000</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd">18,090,668</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">1,000,000</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">2,000,000</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">18,090,668</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>The accompanying notes are an integral
part of these consolidated financial statements.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 127; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_NatureOfOperations-c0_cont_1" escape="true" name="us-gaap:NatureOfOperations"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 1 &#8211; Nature of business and organization</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_2" id="_NatureOfOperations-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Oriental Culture Holding Ltd.
(&#8220;Oriental Culture&#8221;) is a holding company incorporated on November 29, 2018, under the laws of the Cayman Islands.
Oriental Culture Holding Ltd., its subsidiaries and variable interest entity (&#8220;VIE&#8221;) and its subsidiaries are hereafter
referred to as the &#8220;Company&#8221;.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_3" id="_NatureOfOperations-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Oriental Culture has no substantial operations
other than holding all of the outstanding share capital of Oriental Culture Development (&#8220;Oriental Culture BVI&#8221;), China International
Assets and Equity of Artworks Exchange Limited (&#8220;International Culture&#8221;) and HKDAEx Limited. Oriental Culture BVI is also
a holding company holding all of the outstanding share capital of HK Oriental Culture Investment Development Limited (&#8220;Oriental
Culture HK&#8221;). Oriental Culture HK is also a holding company holding all of the outstanding equity of Nanjing Rongke Business Consulting
Service Co., Ltd. (&#8220;Oriental Culture WFOE&#8221; or &#8220;WFOE&#8221;).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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Culture HK and VIE, Jiangsu Yanggu Culture Development Co., Ltd. and subsidiaries (&#8220;Jiangsu
Yanggu&#8221;) and International Culture are engaged in providing online platforms that facilitate the e-commerce trading of artwork and
collectables and the online trading of commodities, principally teas. The Company&#8217;s headquarters were located in the City of Nanjing,
in the People&#8217;s Republic of China (the &#8220;PRC&#8221; or &#8220;China&#8221;). All of the Company&#8217;s business activities
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_5" id="_NatureOfOperations-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 8, 2019, Oriental Culture completed its
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Culture prior to the reorganization. Oriental Culture, Oriental Culture BVI, and Oriental Culture HK, were established as the holding
companies of Oriental Culture WFOE. Oriental Culture WFOE is the primary beneficiary of Jiangsu Yanggu and its subsidiaries. Prior to
the reorganization, Jiangsu Yanggu and International Culture were under common control, as the same group of shareholders held more than
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shares in concert exists. Oriental Culture, International Culture and Jiangsu Yanggu were under common control, which resulted in the
consolidation of International Culture and Jiangsu Yanggu, which was accounted for as a reorganization of entities under common control
at their carrying values. The financial statements are prepared on the basis as if the reorganization became effective as of the beginning
of the first period presented in the accompanying consolidated financial statements of Oriental Culture.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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equity interest of HKDAEx Limited (&#8220;HKDAEx&#8221;), which provides the Company&#8217;s customers with an additional online trading
platform in Hong Kong. Therefore, starting in second half of 2019, the Company expanded its business operations to include online trading
of certain commodities, primarily teas on the platform of HKDAEx.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_8" id="_NatureOfOperations-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the PRC, investment activities by foreign investors
are principally governed by the Special Administrative Measures (Negative List) for Foreign Investment Access which is updated from time
to time by MOFCOM and NDRC. In June, 2020, the MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for
Foreign Investment Access (2020 Version), or the Negative List, which became effective on July 23, 2020. On December 27, 2020, the Special
Administrative Measures for foreign investment access (Negative List) (2021 version) was issued and became effective on January 1, 2022,
replacing the Special Administrative Measures for foreign investment access (Negative List) (2020 version). The Negative List divides
industries into two categories: restricted and prohibited. Industries not listed in the Negative List are generally open to foreign investment
unless specifically restricted by other PRC regulations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

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its subsidiaries including Oriental Culture WFOE is considered a foreign invested enterprise. Although the business the Company conducts
through Jiangsu Yanggu is not within the category in which foreign investment is currently restricted or prohibited under the Negative
List or other PRC Laws, the Company expects that in the future Jiangsu Yanggu will engage in marketing survey services for online marketplaces.
Marketing survey services are within the category in which foreign investment is restricted pursuant to the Negative List. In addition,
the Company intends to centralize the Company&#8217;s management and operations in the PRC to avoid being restricted to conduct certain
business activities which are important for the Company&#8217;s current or future business but are currently restricted or might be restricted
in the future. As such, Jiangsu Yanggu is controlled through contractual arrangements in lieu of direct equity ownership by the Company
or any of its subsidiaries. Such contractual arrangements are comprised of a series of four agreements (collectively the &#8220;Contractual
Arrangements&#8221;), of which the significant terms are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>



</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 128; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_10" id="_NatureOfOperations-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Contractual Agreements with Jiangsu Yanggu</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_11" id="_NatureOfOperations-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Technical Consultation and Services Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_12" id="_NatureOfOperations-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the technical consultation and services
agreement between Oriental Culture WFOE and Jiangsu Yanggu, Oriental Culture WFOE has the exclusive right to provide consultation and
services to Jiangsu Yanggu in the areas of management, human resources, technology and intellectual property rights. For such services,
Jiangsu Yanggu agrees to pay service fees of <ix:nonFraction contextRef="c66" decimals="2" format="ixt:num-dot-decimal" name="ocg:NetIncomePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of its net income to Oriental Culture WFOE and also Oriental Culture WFOE
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_13" id="_NatureOfOperations-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The WFOE exclusively owns any intellectual property
rights arising from the performance of this Technical Consultation and Services Agreement. The term of the Technical Consultation and
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_14" id="_NatureOfOperations-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Equity Pledge Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_15" id="_NatureOfOperations-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Equity Pledge Agreements among
Oriental Culture WFOE, Jiangsu Yanggu and Jiangsu Yanggu&#8217;s shareholders dated May 8, 2019, each of Jiangsu Yanggu&#8217;s shareholders
pledged all of their equity interests in Jiangsu Yanggu to Oriental Culture WFOE to guarantee Jiangsu Yanggu&#8217;s performance of relevant
obligations and indebtedness under the Technical Consultation and Services Agreement and other agreements. If Jiangsu Yanggu breaches
its obligations under the Contractual Agreements, Oriental Culture WFOE, as pledgee, will be entitled to certain rights, including the
right to dispose of the pledged equity interests in order to recover the damages associated with such breach. The pledge is valid until all of Jiangsu Yanggu&#8217;s shareholders are no longer shareholders of Jiangsu Yanggu, or until the satisfaction of all
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_16" id="_NatureOfOperations-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Equity Option Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_17" id="_NatureOfOperations-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Equity Option Agreement among
Oriental Culture WFOE, Jiangsu Yanggu and Jiangsu Yanggu&#8217;s shareholders dated May 8, 2019, Oriental Culture WFOE has the exclusive
right to require Jiangsu Yanggu&#8217;s shareholders to fulfill and complete all approval and registration procedures required under PRC
laws for Oriental Culture WFOE to purchase, or designate one or more persons to purchase, each shareholders&#8217; equity interests in
Jiangsu Yanggu, in one or multiple transactions, at any time or from time to time, at Oriental Culture WFOE&#8217;s sole and absolute
discretion. The purchase price shall be the lowest price allowed by PRC laws. The Equity Option Agreement shall remain effective until
all the equity interests owned by Jiangsu Yanggu&#8217;s shareholders have been legally transferred to Oriental Culture WFOE or its designee(s).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_18" id="_NatureOfOperations-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Voting Rights Proxy and Financial Supporting
Agreements</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_19" id="_NatureOfOperations-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the voting rights proxy and financial
supporting agreements, as amended, among the shareholders of Jiangsu Yanggu and Oriental Culture WFOE, Jiangsu Yanggu&#8217;s shareholders
have given Oriental Culture WFOE an irrevocable proxy to act on their behalf on all matters pertaining to Jiangsu Yanggu and to exercise
all of their rights as shareholders of Jiangsu Yanggu, including the right to attend shareholders meeting, to exercise voting rights and
to transfer all or a part of their equity interests in Jiangsu Yanggu. In consideration of such granted rights, Oriental Culture WFOE
agrees to provide the necessary financial support to Jiangsu Yanggu whether or not Jiangsu Yanggu incurs losses, and agrees not to request
repayment if Jiangsu Yanggu is unable to do so. The agreements is in effect for <ix:nonNumeric contextRef="c68" format="ixt-sec:duryear" name="ocg:AgreementTerm">20</ix:nonNumeric> years until May 7, 2039.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_20" id="_NatureOfOperations-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Based on the foregoing contractual arrangements, which grant
Oriental Culture WFOE effective control of Jiangsu Yanggu and its subsidiaries and obligates Oriental Culture WFOE to absorb <ix:nonFraction contextRef="c69" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:GuaranteeObligationsLiquidationProceedsPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of the
risk of loss from its activities, as well as enable Oriental Culture WFOE to receive <ix:nonFraction contextRef="c2" decimals="2" format="ixt:num-dot-decimal" name="srt:FinancingReceivableNonaccrualToOutstandingPercent" scale="-2" unitRef="pure">100</ix:nonFraction>% of the expected residual returns, the Company
accounts for Jiangsu Yanggu and its subsidiaries as VIEs. Accordingly, the Company consolidates the accounts of Jiangsu Yanggu and its
subsidiaries in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (&#8220;SEC&#8221;), and the Financial
Accounting Standards Board (&#8220;FASB&#8221;) Accounting Standards Codification (&#8220;ASC&#8221;) Section 810-10, Consolidation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>



</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 129; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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into an Amended and Restated Equity Pledge Agreement, an Amended and Restated Equity Option Agreement, and an Amended and Restated Voting
Rights Proxy and Financial Supporting Agreement (&#8220;Amended and Restated VIE Agreements&#8221;) with Jiangsu Yanggu and all shareholders
of Jiangsu Yanggu in order to amend and restate the Equity Pledge Agreement, Equity Option Agreement, and Voting Rights Proxy and Financial
Supporting Agreement originally entered by the parties in May, 2019 (&#8220;Original VIE Agreements&#8221;). The Amended and Restated
VIE Agreements were made principally to reflect a change of the share ownership of Jiangsu Yanggu as a result of the transfer by Mr. Weipeng
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</div><div>

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reflect the activities of the Company and each of the following entities:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_NatureOfOperations-c0_cont_22"><ix:nonNumeric contextRef="c0" escape="true" name="ocg:ScheduleOfConsolidatedFinancialStatementsReflectActivitiesOfTheCompanyTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company&#8217;s consolidated
financial statements include revenue recognition, allowance for doubtful accounts, the useful lives of property and equipment and intangible
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the People&#8217;s Bank of China at the end of the period. In Hong Kong, the Company conducts its business in the local currency, Hong
Kong dollar (HKD), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the Federal
Reserve at the end of the period. The statements of income and cash flows are translated at the average translation rates during the reporting
periods and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in
accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions
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</div><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 131; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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sheets.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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company controlled by Mr. Gao and Mr. Kong (&#8220;Nanjing Jinwang&#8221;). On July 1, 2022, Nan County Public Safety Bureau froze
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

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</div><div>

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basis to determine if the allowance for doubtful accounts is adequate and adjusts the allowance when necessary. Delinquent account balances
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adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against the allowance for doubtful accounts
after management has determined that the likelihood of realization or collection is not probable. No allowance was required as of December
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</div><div>

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</div><div>

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after the Company completes the necessary administrative procedures. The Company normally makes withdrawals from this account monthly.
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</div><div>

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</p></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 133; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_38" id="_SignificantAccountingPoliciesTextBlock-c0_cont_37"><ix:continuation id="ocg_DepositPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company entered into a memorandum of understanding
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of the transaction was dependent on the seller obtaining a permit regarding the proposed use of the site. Subsequent to December 31, 2020,
the Company terminated the MOU as the seller was unable to obtain the required permit and the Company received a full refund of the deposit
(see Note 5).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_39" id="_SignificantAccountingPoliciesTextBlock-c0_cont_38"><ix:nonNumeric contextRef="c0" continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:PropertyPlantAndEquipmentPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Property and equipment</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_41" id="_SignificantAccountingPoliciesTextBlock-c0_cont_40"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfPublicUtilityPropertyPlantAndEquipmentTextBlock"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center"><ix:nonNumeric contextRef="c104" format="ixt-sec:duryear" name="us-gaap:PropertyPlantAndEquipmentUsefulLife">5</ix:nonNumeric> years</td></tr>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c105" format="ixt-sec:duryear" name="us-gaap:PropertyPlantAndEquipmentUsefulLife">5</ix:nonNumeric> years</td></tr>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c106" format="ixt-sec:duryear" name="us-gaap:PropertyPlantAndEquipmentUsefulLife">35</ix:nonNumeric> years</td></tr>
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_42" id="_SignificantAccountingPoliciesTextBlock-c0_cont_41"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_4" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The cost and related accumulated depreciation
and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated
statements of income and other comprehensive income. Expenditures for maintenance and repairs are expensed as incurred, while
additions, renewals and betterments, which are expected to extend the useful life of an asset, are capitalized. The Company also re-evaluates
the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful
lives.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_43" id="_SignificantAccountingPoliciesTextBlock-c0_cont_42"><ix:continuation id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Construction-in-progress
represents material, contractor and labor costs, design fees and inspection fees in connection with the construction of the Company&#8217;s
office building in Jiangsu, China. See Note 7 for details.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_45" id="_SignificantAccountingPoliciesTextBlock-c0_cont_44"><ix:continuation continuedAt="_IntangibleAssetsFiniteLivedPolicy-c0_cont_2" id="_IntangibleAssetsFiniteLivedPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Intangible assets, net, are stated at cost, less
accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_46" id="_SignificantAccountingPoliciesTextBlock-c0_cont_45"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock"><ix:continuation id="_IntangibleAssetsFiniteLivedPolicy-c0_cont_2"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="text-align: center"><ix:nonNumeric contextRef="c108" format="ixt-sec:duryear" name="us-gaap:FiniteLivedIntangibleAssetUsefulLife">5</ix:nonNumeric> years</td></tr>
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_47" id="_SignificantAccountingPoliciesTextBlock-c0_cont_46"><ix:nonNumeric contextRef="c0" continuedAt="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Impairment for long-lived assets</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_48" id="_SignificantAccountingPoliciesTextBlock-c0_cont_47"><ix:continuation id="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Long-lived assets, including property and
equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse
change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be
recoverable. The Company assesses the recoverability of the asset based on the undiscounted future cash flows the asset is expected
to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the
asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an
impairment is identified, the Company reduces the carrying amount of the asset to its estimated fair value based on a discounted
cash flow approach or, when available and appropriate, to comparable market values. For the years ended December 31, 2022,2021 and
2020, the Company recorded <span style="-sec-ix-hidden: hidden-fact-142">nil</span>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="0" unitRef="usd">25,590</ix:nonFraction> and <span style="-sec-ix-hidden: hidden-fact-143">nil</span> of impairment loss digital assets.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>




</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 134; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_50" id="_SignificantAccountingPoliciesTextBlock-c0_cont_49"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_2" id="_InvestmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Entities in which the Company has the ability
to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence
is generally considered to exist when the Company has voting shares of <ix:nonFraction contextRef="c87" decimals="2" format="ixt:num-dot-decimal" name="ocg:VotingSharesPercentage" scale="-2" unitRef="pure">20</ix:nonFraction>% to <ix:nonFraction contextRef="c88" decimals="2" format="ixt:num-dot-decimal" name="ocg:VotingSharesPercentage" scale="-2" unitRef="pure">50</ix:nonFraction>%, and other factors, such as representation
on the board of directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method
of accounting is appropriate. Under this method of accounting, the Company records its proportionate share of the net earnings or losses
of equity method investees and a corresponding increase or decrease to the investment balances. Dividends received from the equity method
investments are recorded as reductions in the cost of such investments. The Company generally considers an ownership interest of <ix:nonFraction contextRef="c89" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">20</ix:nonFraction>% or
higher to represent significant influence. The Company accounts for the investments in entities over which it has neither control nor
significant influence, and no readily determinable fair value is available, using the investment cost minus any impairment, if necessary.
The Company&#8217;s investment of <ix:nonFraction contextRef="c89" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:RestrictedInvestmentsPercentOfNetAssets" scale="-2" unitRef="pure">18</ix:nonFraction>% ownership of Zhongcang Warehouse Co., Ltd. was $<ix:nonFraction contextRef="c89" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermInvestments" scale="0" unitRef="usd">501,802</ix:nonFraction> and $<ix:nonFraction contextRef="c90" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermInvestments" scale="0" unitRef="usd">548,151</ix:nonFraction> as of December 31, 2022 and
2021, respectively, and is accounted for using the cost method.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_51" id="_SignificantAccountingPoliciesTextBlock-c0_cont_50"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_3" id="_InvestmentPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March 2022, the Company&#8217;s VIE Jiangsu
Yanggu entered into an equity subscription agreement to purchase &#160;<ix:nonFraction contextRef="c91" decimals="5" format="ixt:num-dot-decimal" name="ocg:EquityInterestPercentage" scale="-2" unitRef="pure">11.875</ix:nonFraction>% equity interest of Beijing Jiu Yu Ling Jing
Technology Co., Ltd. (&#8220;JYLJ&#8221;), a company incorporated in the PRC, which primarily engages in wine and alcohol product merchants
and customers, as well as product launch, brand showcase, marketing and promotion and it is currently in the process of developing a &#8220;Wine
and Spirits&#8221; metaverse, and the amount raised through increase of share capital will be mainly used for this development. JYLJ&#8217;s
total registered capital is RMB&#160;<ix:nonFraction contextRef="c92" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:Capital" scale="6" unitRef="cny">60</ix:nonFraction>&#160;million (approximately USD&#160;<ix:nonFraction contextRef="c92" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Capital" scale="6" unitRef="usd">9.2</ix:nonFraction>&#160;million). Jiangsu Yanggu&#8217;s subscription amount
is RMB&#160;<ix:nonFraction contextRef="c93" decimals="-6" format="ixt:num-dot-decimal" name="ocg:SubscriptionAmount" scale="6" unitRef="cny">6</ix:nonFraction>&#160;million and RMB&#160;<ix:nonFraction contextRef="c93" decimals="-6" format="ixt:num-dot-decimal" name="ocg:SubscriptionAmount" scale="6" unitRef="usd">3</ix:nonFraction>&#160;million was paid in March 2022. The remaining RMB&#160;<ix:nonFraction contextRef="c93" decimals="-6" format="ixt:num-dot-decimal" name="ocg:RemainingRegisteredCapital" scale="6" unitRef="cny">3</ix:nonFraction>&#160;million is to be paid upon
further resolution from the board of JYLJ. As of December 31, 2022, the Company&#8217;s investment in YLJ was $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherInvestments" scale="0" unitRef="usd">430,750</ix:nonFraction>, and is accounted
for using the cost method.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration
of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near term prospects of the investment;
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</div><div>

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</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_58" id="_SignificantAccountingPoliciesTextBlock-c0_cont_57"><ix:nonNumeric contextRef="c0" continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:RevenueRecognitionPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Revenue recognition</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

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will recognize revenue to represent the transfer of services to customers in an amount that reflects the consideration to which the Company
expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether
revenue should be recognized when control of services transfers to a customer. Under the guidance
of ASC 606, the Company is required to (a)&#160;identify the contract(s) with a customer, (b)&#160;identify the performance obligations
in the contract, (c)&#160;determine the transaction price, (d)&#160;allocate the transaction price to the performance obligations in the
contract and (e)&#160;recognize revenue when (or as) the Company satisfies its performance obligation. Revenues are recorded, net of sales
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service contracts with its customers with revenues being recognized upon performance of services. Persuasive evidence of an arrangement
is demonstrated via service contracts and invoices; and the consideration to the customer is fixed upon acceptance of the sales contract.&#160;At
times, the Company offers incentives and rebates to its customers directly and the Company accounts for these incentives payable to customers
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</div><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 135; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_62" id="_SignificantAccountingPoliciesTextBlock-c0_cont_61"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_5" id="_RevenueRecognitionPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is an online provider of collectibles
and artwork e-commerce services, which allows artists and art dealers and owners to access the art trading market with a wider range of
artwork investors through the Company&#8217;s platforms. The Company currently facilitates trading by individual and institutional customers
of artwork, collectibles and commodities on the Company&#8217;s online platforms. In addition to collectibles and artwork, the Company
has also expanded its platform to trade commodities principally teas.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_63" id="_SignificantAccountingPoliciesTextBlock-c0_cont_62"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_6" id="_RevenueRecognitionPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company generates revenue from its services
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_64" id="_SignificantAccountingPoliciesTextBlock-c0_cont_63"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_7" id="_RevenueRecognitionPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has cooperative agreements with third
parties who are experts and possess new ideas and resources for collectibles/commodities business to co-develop certain niche markets
(such as vintage coins and teas) to be traded on the Company&#8217;s online platforms. These parties are required to place a security
deposits with the Company until termination of the cooperative agreements and deposit amounts will need to increase as the trading volume
increases. Revenue generated from these niche markets will be shared between the Company and these parties based on pre-agreed rates and
trading volume. The Company accounts for the portion of revenue that needs to be reimbursed to the third parties as a reduction of total
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</div><div>

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</div><div>

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the listing on the Company&#8217;s platform over the period requested. The Company recognizes the related revenue upon the completion
of its performance obligations. The fees are determined by contracts with the customers as a fixed percentage of the listing price.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_67" id="_SignificantAccountingPoliciesTextBlock-c0_cont_66"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_10" id="_RevenueRecognitionPolicyTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Transaction fee revenue</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_68" id="_SignificantAccountingPoliciesTextBlock-c0_cont_67"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_11" id="_RevenueRecognitionPolicyTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Transaction fee revenue is generally calculated
based on the transaction value of collectibles, artwork and commodities per transaction. Transaction value is the dollar amount of the
purchase or sale of the collectibles, artwork and commodities after they are listed on the Company&#8217;s platforms. The Company&#8217;s
performance obligation is to facilitate the trading transactions. Transaction fee revenue is recognized and collected at the point-in-time
when the transaction is completed. Transaction fee revenue also includes predetermined monthly transaction fees for select traders with
large transactions and are negotiated on a case-by-case basis. Predetermined transaction fees are recognized and earned over the specified
service period.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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with us during our promotion period. In that regard, customers are required to redeem certain reward points for new listings along
with the regular listing services fees. If a customer does not have any reward points, he/she can purchase them from other customers
on our platform. The Company does not record revenue when customers redeem any points as it is considered as a prerequisite for a
new listing in addition to the regular services fees. The points are traded by and among our customers on the platform and the
Company charges a transaction fee from such points trading. The Company assessed if a material right existed when the Company
initially issued the reward points and if the points represent a separate performance obligation. In general, the points were given
to customers based on existing accounts or promotions without the customers having to acquire services from the Company, therefore
there was no material right and no separate performance obligation exists. There is no liability for unredeemed awards. Transaction
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</div><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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are mainly training and consulting services provided to certain traders/agents for them to be qualified. Upon completion of the training
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</div><div>

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</div><div>

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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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social welfare and benefits for the Company&#8217;s IT, risk management and customer services team, appraisal fees, online cloud service
fees, storage fees paid to related party, and depreciation and amortization of hardware and software for the Company&#8217;s trading platforms.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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incentive payments to third parties that refer new traders to utilize the Company&#8217;s e-commerce trading platforms.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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2021 and 2020, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. The net
VAT balance between input VAT and output VAT is recorded in taxes payable or other receivables and prepaid expenses. All VAT returns
filed by the Company&#8217;s subsidy, VIE and its subsidiaries in China, have been and remain subject to examination by the tax authorities
for five years from the date of filing.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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with FASB ASC Topic 740, &#8220;Income Taxes.&#8221; Under the asset and liability method as required by this accounting standard, deferred
income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the income
tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred
taxes.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax. Deferred tax liabilities
are recognized for all future taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that
taxable income will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax
rates that are expected to apply to the period when the asset is realized or the liability is settled.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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income statement, except when it is related to items credited or charged directly to equity. Net deferred tax assets are reduced by a
valuation&#160;allowance when, in the opinion of management, it is more likely than not that some portion or all of the net deferred tax
assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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being presumed to occur. The amount recognized is the largest amount of tax benefit that has a greater than <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ocg:TaxBenefitPercentage" scale="-2" unitRef="pure">50</ix:nonFraction>% likelihood of being realized
on examination. For tax positions not meeting the &#8220;more likely than not&#8221; test, no tax benefit is recorded. Penalties and interest
incurred related to underpayment of income taxes are classified as income tax expense in the period incurred. PRC tax returns filed in
2021 are subject to examination by the applicable tax authorities. Tax returns filed in Hong Kong from 2018 to 2021 are subject to examination.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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(Topic 842) for the year ended December&#160;31, 2021, and elected the practical expedients that does not require us to reassess: (1)
whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3)
initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting
policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to
treat the lease and non-lease&#160;components of a lease as a single lease component. Upon adoption, the Company recognized $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseRightOfUseAssetAmortizationExpense" scale="0" unitRef="usd">34,608</ix:nonFraction> of a right of use (&#8220;ROU&#8221;) assets and same amount of lease liabilities based on the present value of the future minimum
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</div><div>

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are recognized at the adoption date or the commencement date, whichever is earlier, based on the present value of lease payments over
the lease term. Since the implicit rate for the Company&#8217;s leases is not readily determinable, the Company used its incremental borrowing
rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing
rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments,
in a similar economic environment and over a similar term.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable
certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating
lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term&#160;lease exception,
therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally
do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line&#160;basis
over the lease term.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_98" id="_SignificantAccountingPoliciesTextBlock-c0_cont_97"><ix:continuation id="_RevenueRecognitionLeases-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reviews for impairment of its ROU
assets consistent with the approach applied for its other long-lived&#160;assets. The Company reviews the recoverability of its long-lived&#160;assets
when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment
of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax&#160;cash
flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset
group and include the associated operating lease payments in the undiscounted future pre-tax&#160;cash flows.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_99" id="_SignificantAccountingPoliciesTextBlock-c0_cont_98"><ix:nonNumeric contextRef="c0" continuedAt="_ComprehensiveIncomePolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ComprehensiveIncomePolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Other Income, net</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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qualified in establishing business in Kashi, there is no services required on Kashi Dongfang and no further commitment for the
grant. Other income also includes VAT refund of approximately $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ContractWithCustomerRefundLiability" scale="0" unitRef="usd">61,000</ix:nonFraction>. As part of VAT reform in 2019, a taxpayer in certain service
industries was allowed to reclaim an additional <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationDeductionsOther" scale="-2" unitRef="pure">10</ix:nonFraction>% of input VAT credit against the amount of VAT payable from April 1, 2019 to
December 31, 2022. Other income also includes approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RentalIncomeNonoperating" scale="0" unitRef="usd">112,000</ix:nonFraction> rental income that the Company subleased part of the office
building in 2022. The net other income is approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:AllowanceForDoubtfulAccounts" scale="0" unitRef="usd">269,000</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:AllowanceForDoubtfulAccounts" scale="0" unitRef="usd">193,000</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ocg:AllowanceForDoubtfulAccounts" scale="0" unitRef="usd">169,000</ix:nonFraction> for the years ended December 31, 2022, 2021
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_102" id="_SignificantAccountingPoliciesTextBlock-c0_cont_101"><ix:continuation id="_CommitmentsAndContingenciesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the normal course of business, the Company
is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters,
such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable
that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments
including historical factors and the specific facts and circumstances of each matter.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_104" id="_SignificantAccountingPoliciesTextBlock-c0_cont_103"><ix:continuation id="_EarningsPerSharePolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Basic EPS are computed by dividing
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warrants) were exercised and converted into ordinary shares. For the years ended December 31, 2022, 2021 and 2020, there were no dilutive shares.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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PRC entities must make appropriations from after-tax profits to the non-distributable statutory surplus reserve fund. Subject to
certain cumulative limits, the statutory surplus reserve fund requires annual appropriations of <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ocg:statutorySurplusReserveFund" scale="-2" unitRef="pure">10</ix:nonFraction>% of after-tax profit until the
aggregated appropriations reach <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ocg:RegisteredCapitalPercentage" scale="-2" unitRef="pure">50</ix:nonFraction>% of the registered capital (as determined under accounting principles generally accepted in the
PRC (&#8220;PRC GAAP&#8221;) at each year-end. If the Company has accumulated losses from prior periods, the Company is able to use
the current period net income after tax to offset against the accumulated loss. For the years ended December 31, 2022, 2021 and
2020, the Company appropriated $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:StatutoryReserveFund" scale="0" unitRef="usd">12,410</ix:nonFraction>, which is from Yanyu, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:StatutoryReserveFund" scale="0" unitRef="usd">0</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ocg:StatutoryReserveFund" scale="0" unitRef="usd">0</ix:nonFraction> to the statutory reserve fund. The Company has met the
required maximum contributions to the statutory reserves for&#160;both of its operating entities in China, Kashi Dongfang and Kashi
Longrui.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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to staff welfare benefits including medical care, housing funds, pension benefits, unemployment insurance and other welfare benefits,
which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages
of the employees&#8217; respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash
contributions to the state-sponsored plans. The expenses for the plans were $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EmployeeBenefitsAndShareBasedCompensation" scale="0" unitRef="usd">124,856</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EmployeeBenefitsAndShareBasedCompensation" scale="0" unitRef="usd">105,565</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EmployeeBenefitsAndShareBasedCompensation" scale="0" unitRef="usd">61,305</ix:nonFraction>, for the years ended December
31, 2022, 2021 and 2020, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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for reporting information about operating segments on a basis consistent with the Company&#8217;s internal organizational structure as
well as information about geographical areas, business segments and major customers in financial statements for details on the Company&#8217;s
business segments.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_111" id="_SignificantAccountingPoliciesTextBlock-c0_cont_110"><ix:continuation continuedAt="_SegmentReportingPolicyPolicyTextBlock-c0_cont_3" id="_SegmentReportingPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company uses the management approach to determine
reportable operating segments. The management approach considers the internal organization and reporting used by the Company&#8217;s chief
operating decision maker (&#8220;CODM&#8221;) for making decisions, allocating resources and assessing performance. The Company&#8217;s
CODM has been identified as the Chief Executive Officer of the Company, who reviews consolidated results when making decisions about allocating
resources and assessing performance of the Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_112" id="_SignificantAccountingPoliciesTextBlock-c0_cont_111"><ix:continuation id="_SegmentReportingPolicyPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Based on management&#8217;s assessment, the Company
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 140; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_113" id="_SignificantAccountingPoliciesTextBlock-c0_cont_112"><ix:nonNumeric contextRef="c0" continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Recently issued accounting pronouncements</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_114" id="_SignificantAccountingPoliciesTextBlock-c0_cont_113"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May&#160;2019, the FASB
issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments &#8212; Credit Losses (Topic 326): Measurement
of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses
on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13
added Topic 326, Financial Instruments &#8212; Credit Losses, and made several consequential amendments to the Codification. Update 2016-13
also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value
is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments &#8212; Credit Losses &#8212; Available-for-Sale
Debt Securities. The amendments in this Update address those stakeholders&#8217; concerns by providing an option to irrevocably elect
the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition
relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar
financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments
in Update 2016-13 while still providing financial statement users with decision-useful information. In November&#160;2019, the FASB issued
ASU No. 2019-10, which to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain
smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for
fiscal years beginning after December&#160;15, 2022. The adoption of this ASU is not expected to have a material effect on the Company&#8217;s consolidated
financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation id="_SignificantAccountingPoliciesTextBlock-c0_cont_114"><ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Except as mentioned above, the Company does not
believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company&#8217;s
consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.</p></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:VariableInterestEntityDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 3 &#8211; Variable interest
entity</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_2" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 8, 2019, Oriental Culture WFOE entered
into Contractual Arrangements with Jiangsu Yanggu and its shareholders. The significant terms of these Contractual Arrangements are summarized
in &#8220;Note 1 - Nature of business and organization&#8221; above. As a result, the Company classifies Jiangsu Yanggu and its subsidiaries
as VIEs. Please also see Note 14 &#8211;Commitments and Contingencies for uncertainties of VIE.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_3" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A VIE is an entity that has either a total equity
investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose
equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected
residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has
a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Oriental Culture WFOE
is deemed to have a controlling financial interest and is the primary beneficiary of Jiangsu Yanggu and its subsidiaries because it has
both of the following characteristics:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_4" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 24px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px"><span style="font-size: 10pt">(1)</span></td>
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  <tr>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: top">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr>
    <td style="text-align: justify">&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_5" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accordingly, the accounts of Jiangsu Yanggu and
its subsidiaries are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 141; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_6" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 28, 2021, Oriental Culture WFOE entered into an Amended and Restated Equity Pledge Agreement, an Amended and Restated Equity
Option Agreement, and an Amended and Restated Voting Rights Proxy and Financial Supporting Agreement (&#8220;Amended and Restated VIE
Agreements&#8221;) with Jiangsu Yanggu and all shareholders of Jiangsu Yanggu in order to amend and restate the Equity Pledge Agreement,
Equity Option Agreement, and Voting Rights Proxy and Financial Supporting Agreement originally entered by the parties in May, 2019 (&#8220;Original
VIE Agreements&#8221;). The Amended and Restated VIE Agreements were made principally to reflect a change of the share ownership of Jiangsu
Yanggu as a result of the transfer by Mr. Weipeng Liang of his <ix:nonFraction contextRef="c109" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:VariableInterestEntityOwnershipPercentage" scale="-2" unitRef="pure">10</ix:nonFraction>% equity interest in Jiangsu Yanggu to Ms. Yuanyuan Xiao on January
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terms of the Original VIE Agreements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_7" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
carrying amounts of the VIEs&#8217; consolidated assets and liabilities are as follows:&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_8" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" continuedAt="ocg_ScheduleOfVIEsConsolidatedAssetsAndLiabilitiesTableTextBlock-c0_cont_1" escape="true" name="ocg:ScheduleOfVIEsConsolidatedAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,<br/>
    2022</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,<br/>
    2021</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
    asset:</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityConsolidatedCurrentAssets" scale="0" unitRef="usd">34,200,319</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityConsolidatedCurrentAssets" scale="0" unitRef="usd">26,650,671</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
    and equipment, net</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityPropertyAndEquipmentNet" scale="0" unitRef="usd">9,417,777</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityPropertyAndEquipmentNet" scale="0" unitRef="usd">9,890,566</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    noncurrent assets</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityOtherNoncurrentAssets" scale="0" unitRef="usd">1,049,683</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityOtherNoncurrentAssets" scale="0" unitRef="usd">3,801,822</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    assets</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityTotalAssets" scale="0" unitRef="usd">44,667,779</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_9" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_8"><ix:continuation id="ocg_ScheduleOfVIEsConsolidatedAssetsAndLiabilitiesTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,<br/>
    2021</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityAccountsPayableRelatedParties" scale="0" unitRef="usd">1,665</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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    revenue</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityDeferredRevenue" scale="0" unitRef="usd">449,037</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityDeferredRevenue" scale="0" unitRef="usd">697,863</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other payables
    and accrued liabilities</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityOtherPayablesAndAccruedLiabilities" scale="0" unitRef="usd">667,495</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityOtherPayablesAndAccruedLiabilities" scale="0" unitRef="usd">1,474,792</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taxes
    payable</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityTaxesPayable" scale="0" unitRef="usd">13,372</ix:nonFraction></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityTaxesPayable" scale="0" unitRef="usd">29,826</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    liabilities</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityLiabilities" scale="0" unitRef="usd">4,047,943</ix:nonFraction></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityLiabilities" scale="0" unitRef="usd">3,687,973</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_10" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
summarized operating results of the VIEs are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_VariableInterestEntityDisclosureTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c0" escape="true" name="ocg:ScheduleOfOperatingResultsOfTheVIEsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="10" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> Years&#160;Ended<br/> December 31,</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2021</span></td>
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2020</span></td>
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
    revenues</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityOperatingRevenues" scale="0" unitRef="usd">17,813,254</ix:nonFraction></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityOperatingRevenues" scale="0" unitRef="usd">37,596,460</ix:nonFraction></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
    from operations</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityIncomeFromOperations" scale="0" unitRef="usd">6,728,516</ix:nonFraction></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityIncomeFromOperations" scale="0" unitRef="usd">15,203,703</ix:nonFraction></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
    income</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityNetIncome" scale="0" unitRef="usd">7,314,651</ix:nonFraction></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityNetIncome" scale="0" unitRef="usd">15,762,806</ix:nonFraction></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ocg:VariableInterestEntityNetIncome" scale="0" unitRef="usd">6,948,599</ix:nonFraction></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table></ix:nonNumeric></ix:continuation><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>






</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"></p><div>

</div><!-- Field: Page; Sequence: 142; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="margin: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:LoansNotesTradeAndOtherReceivablesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
4 &#8211; Accounts receivables, net</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_2" id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s net accounts receivable are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<b>&#160;2022
    </b>&#160; &#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2021</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trade
    accounts receivable</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:TradeAccountsReceivable" scale="0" unitRef="usd">43,282</ix:nonFraction></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:TradeAccountsReceivable" scale="0" unitRef="usd">156,852</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less:
    allowance for doubtful accounts</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsPremiumsAndOtherReceivables" scale="0" unitRef="usd">43,075</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsPremiumsAndOtherReceivables" scale="0" unitRef="usd">109,792</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
    receivable, net</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:AccountsReceivablesNet" scale="0" unitRef="usd">207</ix:nonFraction></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:AccountsReceivablesNet" scale="0" unitRef="usd">47,060</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:OtherIncomeAndOtherExpenseDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
5 &#8211; Other receivables and prepaid expenses</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_2" id="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
receivables consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_3" id="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfOtherCurrentAssetsTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfOtherCurrentAssetsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    2021</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: hidden-fact-146; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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    advances and others</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:PrepaidTaxesAndServicesFees" scale="0" unitRef="usd">8,095</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
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    VAT taxes</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prepaid
    consulting fee</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:PrepaidServiceFee" scale="0" unitRef="usd">646,852</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:PrepaidServiceFee" scale="0" unitRef="usd">1,136,377</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    other receivables and prepaid expenses</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrepaidExpenseAndOtherAssetsCurrent" scale="0" unitRef="usd">4,441,946</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrepaidExpenseAndOtherAssetsCurrent" scale="0" unitRef="usd">1,385,394</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation id="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_3"><ix:continuation id="_ScheduleOfOtherCurrentAssetsTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><ix:footnote id="ix_1_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This advance was short term, non-interest bearing and due on demand. The Company collected full amount of advance by March 22, 2023.</span></ix:footnote></td>
</tr></table></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="ocg_DepositTextBlock-c0_cont_1" escape="true" name="ocg:DepositTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
6 &#8211; Deposit</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation id="ocg_DepositTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 16, 2020, the Company entered into a memorandum of understanding (&#8220;MOU&#8221;) with a third-party to acquire approximately
<ix:nonFraction contextRef="c110" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AreaOfLand" scale="0" unitRef="sqm">39,000</ix:nonFraction> square meters of office and warehouse space and related land use rights in Nanjing city to meet the Company&#8217;s growing need
for office and warehouse space. The price per the MOU was RMB<ix:nonFraction contextRef="c110" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionCostOfAcquiredEntityTransactionCosts" scale="6" unitRef="cny">195</ix:nonFraction> million (approximately $<ix:nonFraction contextRef="c110" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionCostOfAcquiredEntityTransactionCosts" scale="6" unitRef="usd">29.6</ix:nonFraction> million) with land use rights to
expire on October 7, 2052. The current land use rights for such office and warehouse on site were for industrial use purposes and the
seller agreed to apply for approval with the local government to change the use of rights from industrial to research and development
before the parties would proceed further with the MOU. The Company was planning to use the property for its research and development
center. The Company paid a deposit of RMB <ix:nonFraction contextRef="c110" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Deposits" scale="6" unitRef="cny">65.0</ix:nonFraction> million (approximately $<ix:nonFraction contextRef="c111" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Deposits" scale="6" unitRef="usd">9.9</ix:nonFraction> million) after signing the MOU. A second payment of RMB <ix:nonFraction contextRef="c112" decimals="-6" format="ixt:num-dot-decimal" name="ocg:SecondPayment" scale="6" unitRef="cny">22</ix:nonFraction>
million (approximately $<ix:nonFraction contextRef="c113" decimals="-5" format="ixt:num-dot-decimal" name="ocg:SecondPayment" scale="6" unitRef="usd">3.4</ix:nonFraction> million) was made upon finalization of the research center development plan with the final payment to be
paid when the permit is approved in six months and the research center is completed. The Company paid the deposit of RMB <ix:nonFraction contextRef="c114" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Deposits" scale="6" unitRef="cny">87.0</ix:nonFraction> million
(approximately $<ix:nonFraction contextRef="c114" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Deposits" scale="6" unitRef="usd">13.3</ix:nonFraction> million) as of December 31, 2020. In March 2021, the Company was notified by the seller that the permit may not
be obtained timely or at all. The Company terminated the MOU and the seller refunded RMB <ix:nonFraction contextRef="c115" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Deposits" scale="6" unitRef="cny">87.0</ix:nonFraction> million (approximately $<ix:nonFraction contextRef="c115" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Deposits" scale="6" unitRef="usd">13.2</ix:nonFraction> million)
in 2021. There was no termination fee or penalty.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="margin: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="margin: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
7 &#8211; Property and equipment, net</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and equipment consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_3" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:PropertyPlantAndEquipmentTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_4" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company acquired an office building in Jiangsu,
China on November 17, 2021, the total building is <ix:nonFraction contextRef="c116" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ConversionOfStockSharesIssued1" scale="0" unitRef="shares">6,840.41</ix:nonFraction> square meter with 4 floors, which will be used for the Company&#8217;s operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_5" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Construction in progress represent ongoing construction
for the office building mentioned above. The construction was to install elevator, HVAC, electrical system and office construction for
the third and fourth floor of the office building to get the office space ready for use. The construction is expected to be completed
in August 2023. The first and second floor was already ready to use when the Company acquired the building. As such, depreciation expenses
for the building for the year ended December 31, 2022 was recorded for the first and second floor of the building which was ready for
use.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
expense for the years ended December 31, 2022, 2021 and 2020 was $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DepreciationDepletionAndAmortization" scale="0" unitRef="usd">340,296</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DepreciationDepletionAndAmortization" scale="0" unitRef="usd">186,551</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DepreciationDepletionAndAmortization" scale="0" unitRef="usd">122,409</ix:nonFraction>, respectively.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:IntangibleAssetsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
8 &#8211; Intangible assets, net</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_2" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible
assets consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_3" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ocg:ScheduleOfIntangibleAssetsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c123" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherIntangibleAssetsNet" scale="0" unitRef="usd">797,568</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c124" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherIntangibleAssetsNet" scale="0" unitRef="usd">793,310</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Software</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c125" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherIntangibleAssetsNet" scale="0" unitRef="usd">933,732</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c126" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherIntangibleAssetsNet" scale="0" unitRef="usd">902,313</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Copyright</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: hidden-fact-148; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: hidden-fact-149; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less:
    accumulated amortization and impairment</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization" scale="0" sign="-" unitRef="usd">914,415</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization" scale="0" sign="-" unitRef="usd">575,602</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherIntangibleAssetsNet" scale="0" unitRef="usd">816,885</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherIntangibleAssetsNet" scale="0" unitRef="usd">1,120,021</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_4" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortization
expenses for the years ended December 31, 2022, 2021 and 2020 was $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AmortizationOfIntangibleAssets" scale="0" unitRef="usd">333,135</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AmortizationOfIntangibleAssets" scale="0" unitRef="usd">212,672</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AmortizationOfIntangibleAssets" scale="0" unitRef="usd">185,865</ix:nonFraction> respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_5" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
future amortization is as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_IntangibleAssetsDisclosureTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: justify; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Twelve
    Months Ending December 31,</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Estimated
    <br/> Amortization Expense</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 88%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2023</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo" scale="0" unitRef="usd">320,713</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2024</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFour" scale="0" unitRef="usd">196,955</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2025</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseRollingYearFive" scale="0" unitRef="usd">161,581</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2026</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFive" scale="0" unitRef="usd">136,099</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2027</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseAfterYearFive" scale="0" unitRef="usd">1,537</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsNet" scale="0" unitRef="usd">816,885</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 144; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
9 &#8211; Other payables and accrued liabilities</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_2" id="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
payables and accrued liabilities consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_3" id="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfAccountsPayableAndAccruedLiabilitiesTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfAccountsPayableAndAccruedLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_2" id="_IncomeTaxDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Cayman
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_3" id="_IncomeTaxDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gains. Additionally, upon payment of dividends
to the shareholders, no Cayman Islands withholding tax will be imposed.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_4" id="_IncomeTaxDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Hong
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_5" id="_IncomeTaxDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
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income generated from operations in Hong Kong. Payments of dividends from Oriental Culture HK to us are not subject to any Hong Kong
withholding&#160;tax. The Company did not generate any revenue from operations in Hong Kong since its inception through December 31,
2022, and therefore is not subject to any income taxes in Hong Kong.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_6" id="_IncomeTaxDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">PRC</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_7" id="_IncomeTaxDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
WFOE and VIEs incorporated in the PRC are governed by the income tax laws of the PRC and the income tax provisions in respect to operations
in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations
and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the &#8220;EIT Laws&#8221;), domestic enterprises
and Foreign Investment Enterprises (the &#8220;FIE&#8221;) are usually subject to a unified <ix:nonFraction contextRef="c130" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateContinuingOperations" scale="-2" unitRef="pure">25</ix:nonFraction>% enterprise income tax rate while preferential
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_8" id="_IncomeTaxDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the current EIT Law, dividends paid by an FIE to any of its foreign non-resident enterprise investors are subject to a <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ocg:WithholdingTaxRate" scale="-2" unitRef="pure">10</ix:nonFraction>% withholding
tax. Thus, dividends, if and when payable by the Company&#8217;s PRC subsidiaries to their offshore parent entities, would be subject
to a <ix:nonFraction contextRef="c131" decimals="2" format="ixt:num-dot-decimal" name="ocg:WithholdingTaxRate" scale="-2" unitRef="pure">10</ix:nonFraction>% withholding tax. A lower tax rate will be applied if such foreign non-resident enterprise investor&#8217;s jurisdiction of incorporation
has signed a tax treaty or arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes
on income with China. There is such a tax arrangement between the PRC and Hong Kong. Thus, the dividends, if and when payable by the
Company&#8217;s WFOE to the offshore parent entity located in Hong Kong, would be subject to a <ix:nonFraction contextRef="c129" decimals="2" format="ixt:num-dot-decimal" name="ocg:WithholdingTaxRate" scale="-2" unitRef="pure">5</ix:nonFraction>% withholding tax rather than the statutory
rate of <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">10</ix:nonFraction>% provided that the offshore entity located in Hong Kong meets the requirements stipulated by relevant PRC tax regulations.
The Company has not provided for deferred income tax liabilities on the WFOE&#8217;s undistributed earnings of $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxLiabilities" scale="0" unitRef="usd">42,087,930</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxLiabilities" scale="0" unitRef="usd">34,785,070</ix:nonFraction>
as of December 31, 2022 and 2021, respectively, because the Company controls the timing of the undistributed earnings and it is probable
that such earnings will not be distributed. The Company plans to reinvest those earnings in the PRC operations for the foreseeable future.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_9" id="_IncomeTaxDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
the current EIT Law treats enterprises established outside of China with &#8220;effective management and control&#8221; located in China
as PRC resident enterprises for tax purposes. The term &#8220;effective management and control&#8221; is generally defined as exercising
overall management and control over the business, personnel, accounting, properties, etc. of an enterprise. The Company, if considered
a PRC resident enterprise for tax purposes, would be subject to the PRC Enterprise Income Tax at the rate of <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateContinuingOperations" scale="-2" unitRef="pure">25</ix:nonFraction>% on its worldwide income
for the period after January 1, 2008 if&#160;the only if all of the following conditions are met: (i) the primary location of the day-to-day
operational management is in China; (ii) decisions relating to the enterprise&#8217;s financial and human resource matters are made or
are subject to approval by organizations or personnel in China; (iii) the enterprise&#8217;s primary assets, accounting books and records,
company seals, and board and shareholder resolutions, are located or maintained in China; and (iv) at least <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ocg:BoardMembersVotingPercentage" scale="-2" unitRef="pure">50</ix:nonFraction>% of voting board members
or senior executives habitually reside in China. Based upon a review of surrounding facts and circumstances, the Company does not believe
its subsidiaries outside of China is a PRC resident enterprise for PRC tax purposes because the rule only applies to offshore enterprises
controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, and therefore
was not subject to PRC taxes.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_10" id="_IncomeTaxDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Kashi
Longrui and Kashi Dongfang were formed and registered in Kashi in Xinjiang Province, China in 2018. These companies have received an
exemption and will not be subject to income tax for <ix:nonNumeric contextRef="c0" format="ixt-sec:duryear" name="ocg:IncomeTaxMaturity">5</ix:nonNumeric> years, which was expired on December 31, 2022. As of December 31, 2022 and 2021, the Company has not recorded any deferred
tax liabilities in light of (1) its tax free arrangement; (2) its compliance with PRC EIT Law in making payments of enterprise income
tax; and (3) Jiangsu Yanggu&#8217;s inability to pay its net profits to WFOE under the VIE agreement without the Company&#8217;s determination.
However, any changes with the current effective PRC Tax laws and regulations could result in the Company paying more enterprise income
tax, which would materially and adversely affect the operating and financial performance of the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_11" id="_IncomeTaxDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tax
savings for the years ended December 31, 2022, 2021 and 2020 amounted to approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:TaxSavingsAmount" scale="0" unitRef="usd">1,933,000</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:TaxSavingsAmount" scale="0" unitRef="usd">4,198,000</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ocg:TaxSavingsAmount" scale="0" unitRef="usd">2,427,000</ix:nonFraction>,
respectively. The Company&#8217;s basic and diluted earnings per share would have been lower by $<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ocg:DecreaseInEarningsPerShareBasicAndDiluted" scale="0" unitRef="usdPershares">0.50</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="2" format="ixt:num-dot-decimal" name="ocg:DecreaseInEarningsPerShareBasicAndDiluted" scale="0" unitRef="usdPershares">0.20</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="ocg:DecreaseInEarningsPerShareBasicAndDiluted" scale="0" unitRef="usdPershares">0.16</ix:nonFraction> per share for
the years ended December 31, 2022, 2021 and 2020, respectively, without the preferential tax exemption.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_12" id="_IncomeTaxDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table reconciles China statutory rates to the Company&#8217;s effective tax rate:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_13" id="_IncomeTaxDisclosureTextBlock-c0_cont_12"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Change
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
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    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate" scale="-2" unitRef="pure">0.1</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_14" id="_IncomeTaxDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Deferred
tax assets - China</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_15" id="_IncomeTaxDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_16" id="_IncomeTaxDisclosureTextBlock-c0_cont_15"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    2021</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsOperatingLossCarryforwards" scale="0" unitRef="usd">961,468</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsOperatingLossCarryforwards" scale="0" unitRef="usd">820,610</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Allowance
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less:
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
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    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="-sec-ix-hidden: hidden-fact-152; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_17" id="_IncomeTaxDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_18" id="_IncomeTaxDisclosureTextBlock-c0_cont_17"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:SummaryOfValuationAllowanceTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,<br/>
    2021</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additions</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:DeferredTaxAssetsValuationAllowanceAdditions" scale="0" unitRef="usd">124,502</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:DeferredTaxAssetsValuationAllowanceAdditions" scale="0" unitRef="usd">395,726</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ending
    balance</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="ocg:DeferredTaxAssetsValuationAllowances" scale="0" unitRef="usd">972,237</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="ocg:DeferredTaxAssetsValuationAllowances" scale="0" unitRef="usd">847,735</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="margin: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_19" id="_IncomeTaxDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the recoverable amounts of deferred tax assets, and provided a valuation allowance to the extent that future taxable
profits will be available against which the net operating loss and temporary difference can be utilized. The Company considers both positive
and negative factors when assessing the future realization of the deferred tax assets and applied weigh to the relative impact of the
evidence to the extent it could be objectively verified.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_20" id="_IncomeTaxDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s NOL was mainly from the Company&#8217;s VIE and its subsidiaries&#8217; cumulative net operating losses
(&#8220;NOL&#8221;) of approximately $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="0" unitRef="usd">4,521,000</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="0" unitRef="usd">3,786,000</ix:nonFraction> as of December 31, 2022 and 2021, and will start expiring in 2024. Management believes projected
future losses outweighs other factors and made a full allowance of related deferred tax assets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_21" id="_IncomeTaxDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taxes
payable consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_IncomeTaxDisclosureTextBlock-c0_cont_21"><ix:nonNumeric contextRef="c0" escape="true" name="ocg:TaxesPayableTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,<br/> 2022</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,<br/>
    2021</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">VAT
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:ConcentrationRiskDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
11 &#8211; Concentration of credit risk</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_2" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and
equivalents. A depositor has up to RMB <ix:nonFraction contextRef="c132" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashFDICInsuredAmount" scale="0" unitRef="cny">500,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c132" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashFDICInsuredAmount" scale="0" unitRef="usd">72,000</ix:nonFraction>) insured by the People&#8217;s Bank of China Financial
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deposited on our trading platform trust account located in the PRC. The account is held at Ping An Bank and entrusted with Nanjing
Jinwang Art Purchase E-commerce Co., Ltd., our related party. This balance is not covered by insurance. While management believes
that these financial institutions and platform fund holder are of high credit quality, it continually monitors their credit
worthiness.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_3" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Customer
concentration risk</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_4" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Three
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</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_5" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="ocg:ScheduleOfAccountsReceivableTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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2021</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr>
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Customer B</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-153">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-154">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Customer C</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c151" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableSale" scale="0" unitRef="usd">12,966</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-155">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-156">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Customer D</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-157">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c156" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure">0.0</ix:nonFraction></td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c157" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableSale" scale="0" unitRef="usd">109,792</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c158" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure">66.6</ix:nonFraction></td><td style="text-align: left">%</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_6" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
of the Company&#8217;s revenue was generated in the PRC.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_7" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Vendor
concentration risk</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_ConcentrationRiskDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">One
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2021 and 2020, respectively. There is no accounts payable concentration for the years ended December 31, 2022 and 2021.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:RelatedPartyTransactionsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
12 &#8211; Related party transactions</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_2" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a.
Accounts receivable &#8211; related parties consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ocg:ScheduleOfAccountsReceivableRelatedParties"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><b>&#160;</b></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><b>&#160;</b></td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; width: 29%; text-align: left; text-indent: -9pt; padding-left: 9pt">Nanjing Culture Exchange Art Property Exchange Co., Ltd. (&#8220;Nanjing Culture&#8221;)</td><td style="width: 1%">&#160;</td>
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    <td style="vertical-align: top; width: 20%; text-align: left"><ix:nonNumeric contextRef="c164" name="ocg:DescriptionOfNetRevenuesNature">Receivable from technological service fee revenue</ix:nonNumeric></td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c3" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableRelatedParties" scale="6" unitRef="usd">8,093</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">b.
Accounts payable &#8211; related parties consist of the following:</span>

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfRelatedPartyTransactionsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center; padding-bottom: 1.5pt"><b>&#160;</b></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><b>Relationship</b></td><td style="text-align: center; padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td style="text-align: center; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; font: 10pt Times New Roman, Times, Serif; margin-bottom: 0pt"><b>Nature</b></p></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><b>December&#160;31,<br/> 2022</b></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><b>&#160;</b></td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><b>December&#160;31,<br/> 2021</b></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><b>&#160;</b></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; width: 29%; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Kashi Jinwang Art Purchase E-commerce Co., Ltd.</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; width: 25%; text-align: left; padding-bottom: 1.5pt"><ix:nonNumeric contextRef="c169" name="ocg:DescriptionOfAccountsPayableRelatedPartiesRelationship">100% owned by Nanjing Jinwang Art Purchase E-commerce Co., Ltd., a related party of the Company</ix:nonNumeric></td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; width: 20%; text-align: left; padding-bottom: 1.5pt"><span style="-sec-ix-hidden: hidden-fact-158">Payable for online advertising expenses</span></td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; width: 9%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; width: 9%; text-align: right"><ix:nonFraction contextRef="c170" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">1,665</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Zhongcang Warehouse Co., Ltd.</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt"><ix:nonNumeric contextRef="c171" name="ocg:DescriptionOfAccountsPayableRelatedPartiesRelationship">An 18% subsidiary of the VIE of the Company</ix:nonNumeric></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt"><ix:nonNumeric contextRef="c171" name="ocg:NatureOfAccountPayable">Payable for storage fees</ix:nonNumeric></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c172" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">28,727</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 4pt"><div style="-sec-ix-hidden: hidden-fact-159">&#160;</div></td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">28,727</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">1,665</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_6" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">c.
Other payables &#8211; related parties consist of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_7" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
payables &#8211; related parties are those nontrade payables arising from transactions between the Company and its related parties, such
as payments paid on behalf of the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_8" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" escape="true" name="ocg:ScheduleOfOtherPayablesRelatedPartiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="text-align: left; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Relationship</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    2022</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,<br/>
    2021</span></td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="text-align: left; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; width: 45%; text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mun
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 30%; text-align: left; padding-bottom: 1.5pt"><ix:nonNumeric contextRef="c173" name="ocg:DescriptionOfOtherPayablesRelationship"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chairman of the board of directors of the Company</span></ix:nonNumeric></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c174" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">3,262</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;<span style="-sec-ix-hidden: hidden-fact-160; font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;-</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="padding-bottom: 4pt; text-align: left; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td><td style="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_11" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">e.
Cost of revenues &#8211; related party consists of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_13" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">f.
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_14" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_13"><ix:nonNumeric contextRef="c0" escape="true" name="ocg:ScheduleOfSellingAndMarketingExpensesRelatedPartyTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_15" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2019, the Company entered into advertising
contract with Kashi Jinwang Art Purchase E-commerce Co., Ltd. pursuant to which the Company would use advertising space on Kashi Jinwang&#8217;s
website from January 1, 2019 to December 31, 2022. The Company was charged a yearly advertising fee of approximately $<ix:nonFraction contextRef="c0" decimals="-4" format="ixt:num-dot-decimal" name="us-gaap:AdvertisingExpense" scale="6" unitRef="usd">0.18</ix:nonFraction> million adjustable by actual usage, which was approximately <ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="ocg:ActualUsagePercentage" scale="-2" unitRef="pure">1.7</ix:nonFraction>% of the Company&#8217;s initial listing value of collectible or artwork at
the time when the contract was entered. On May 1, 2020, the contract between the Company and Kashi Jinwang Art Purchase E-commerce Co.,
Ltd. was amended and the monthly advertising fee was fixed at <ix:nonFraction contextRef="c159" decimals="3" format="ixt:num-dot-decimal" name="ocg:AdvertisingFeePercentage" scale="-2" unitRef="pure">1.5</ix:nonFraction>% of the initial listing value of collectible or artwork from May 1,
2020 to December 31, 2022. The contract was further amended on June 25, 2020, pursuant to which the fee will be <ix:nonFraction contextRef="c160" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ContractsInForceSubjectToParticipationThroughReinsurancePercentage" scale="-2" unitRef="pure">2.25</ix:nonFraction>% of the initial listing
value of collectibles or artwork from July 1, 2020 to December 31, 2020, then return back to <ix:nonFraction contextRef="c161" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ContractsInForceSubjectToParticipationThroughReinsurancePercentage" scale="-2" unitRef="pure">1.5</ix:nonFraction>% from January 1, 2021 to December 31,
2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_16" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">g. During the years ended December 31, 2022,
2021 and 2020, HKDAEx paid approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RelatedPartyTransactionSellingGeneralAndAdministrativeExpensesFromTransactionsWithRelatedParty" scale="0" unitRef="usd">51,000</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RelatedPartyTransactionSellingGeneralAndAdministrativeExpensesFromTransactionsWithRelatedParty" scale="0" unitRef="usd">65,000</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RelatedPartyTransactionSellingGeneralAndAdministrativeExpensesFromTransactionsWithRelatedParty" scale="0" unitRef="usd">54,000</ix:nonFraction>, respectively, to HKFAEx, a company owned by our Chairman for
accounting and business administration services.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_17" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">h. The Company entered into a
non-cancellable Office Premises Use Contract with&#160;Nanjing Culture and Artwork Property Exchange Co., Ltd. which is controlled
by Huajun Gao and Aimin Kong, each is a <ix:nonFraction contextRef="c31" decimals="3" format="ixt:num-dot-decimal" name="ocg:PercentageOfBeneficialShareholder" scale="-2" unitRef="pure">11.5</ix:nonFraction>% beneficial shareholder of the Company,&#160;for an office from January 1, 2020 to
December 31, 2020 with a monthly rental of approximately $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ocg:MonthlyRentalExpense" scale="0" unitRef="usd">14,000</ix:nonFraction> including VAT taxes. The Company renewed the lease under the same
terms from January 1, 2021 to December 31, 2021 and then renewed again to December 31, 2022. Total rental expense for the years
ended December 31, 2022, 2021 and 2020 was approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ocg:TotalRentalExpense" scale="0" unitRef="usd">151,000</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ocg:TotalRentalExpense" scale="0" unitRef="usd">158,000</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ocg:TotalRentalExpense" scale="0" unitRef="usd">148,000</ix:nonFraction>, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">i. Other receivables &#8211; related party consist
of funds which are held in trading platform trust account entrusted with Nanjing Jinwang. The funds are unrestricted as to immediate
withdrawal and use after the Company&#8217;s customers completed the necessary administrative procedures from the platform. The Company
normally make withdraw monthly. As of March 22, 2023, approximately RMB <ix:nonFraction contextRef="c162" decimals="-5" format="ixt:num-dot-decimal" name="ocg:AmountReturned" scale="6" unitRef="cny">6.0</ix:nonFraction> million ($ <ix:nonFraction contextRef="c162" decimals="-5" format="ixt:num-dot-decimal" name="ocg:AmountReturned" scale="6" unitRef="usd">0.9</ix:nonFraction> million) was returned to the Company.</p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><ix:nonNumeric contextRef="c0" continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
13 &#8211; Equity</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Amended and Restated Article of Association adopted by a special resolution of the shareholders of the Company dated September
12, 2019, the authorized shares of <ix:nonFraction contextRef="c191" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">50,000,000</ix:nonFraction> ordinary shares were re-designated to <ix:nonFraction contextRef="c191" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockSharesAuthorized" scale="0" unitRef="shares">50,000,000</ix:nonFraction> preferred shares of a nominal or par value
of USD <ix:nonFraction contextRef="c191" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.0001</ix:nonFraction> each.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 8, 2019, <ix:nonNumeric contextRef="c192" name="us-gaap:StockholdersEquityNoteStockSplit">the shareholders of the Company adopted the Second Amended and Restated Articles of Association to effect a 2 for 1
forward share split of the total authorized and issued and outstanding shares of the Company. As a result of the 2 for 1 forward share
split, the Company&#8217;s total authorized shares are 1,000,000,000 shares comprising of (i) 900,000,000 ordinary shares with a par
value of $0.00005 each and (ii) 100,000,000 preferred shares with a par value of $0.00005 each, and the Company&#8217;s issued and outstanding
ordinary shares increased from 12,400,000 shares to 24,800,000 shares. In addition, all existing shareholders agreed to surrender to
the Company as treasury shares, 12.5% of the then outstanding ordinary shares (3,100,000 ordinary shares) for no consideration.</ix:nonNumeric></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 28, 2020, all existing shareholders of the Company agreed to surrender an additional <ix:nonFraction contextRef="c193" decimals="0" format="ixt:num-dot-decimal" name="ocg:SurrenderAdditionalOrdinaryShares" scale="0" unitRef="shares">6,510,000</ix:nonFraction> ordinary shares, or <ix:nonFraction contextRef="c193" decimals="2" format="ixt:num-dot-decimal" name="ocg:PercentageOfOutstandingOrdinaryShares" scale="-2" unitRef="pure">30</ix:nonFraction>% of the Company&#8217;s
then outstanding ordinary shares, at no consideration to be reserved as treasury shares of the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 1, 2020, the Company completed its IPO of <ix:nonFraction contextRef="c194" decimals="0" format="ixt:num-dot-decimal" name="ocg:InitialPublicOfferingOrdinaryShares" scale="0" unitRef="shares">5,065,000</ix:nonFraction> ordinary shares and <ix:nonFraction contextRef="c194" decimals="0" format="ixt:num-dot-decimal" name="ocg:InitialPublicOptionShare" scale="0" unitRef="shares">59,400</ix:nonFraction> option shares at a public offering price of $<ix:nonFraction contextRef="c195" decimals="2" format="ixt:num-dot-decimal" name="ocg:InitialPublicOfferingPricePerShare" scale="0" unitRef="usdPershares">4.00</ix:nonFraction>
per share, par value US$<ix:nonFraction contextRef="c194" decimals="5" format="ixt:num-dot-decimal" name="ocg:InitialPublicOfferingPricePerValueShare" scale="0" unitRef="shares">0.00005</ix:nonFraction> per share, resulting in net proceeds to the Company of approximately $<ix:nonFraction contextRef="c196" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OtherUnderwritingExpense" scale="6" unitRef="usd">17.3</ix:nonFraction> million after deducting underwriting
commission, offering costs and other expenses.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5"><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2020, in connection with the IPO, the Company issued warrants to purchase <ix:nonFraction contextRef="c197" decimals="0" format="ixt:num-dot-decimal" name="ocg:ProceedsPutIntoEscrowAccount" scale="0" unitRef="usd">409,952</ix:nonFraction> ordinary shares to the
underwriters. The underwriters&#8217; warrants have a five-year term and an exercise price of $<ix:nonFraction contextRef="c198" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares">5.00</ix:nonFraction> per share. On December 17, 2020,
the underwriters exercised options to purchase the <ix:nonFraction contextRef="c199" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsOfDividendsCommonStock" scale="0" unitRef="usd">409,952</ix:nonFraction> ordinary shares, on a cashless basis, resulting in the issuance of <ix:nonFraction contextRef="c199" decimals="0" format="ixt:num-dot-decimal" name="ocg:WarrantsIssuanceOfOrdinaryShares" scale="0" unitRef="shares">130,312</ix:nonFraction>
ordinary shares.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 7, 2021, the Company entered into
Securities Purchase Agreements (&#8220;Agreements&#8221;) with two investors (&#8220;Investors&#8221;), pursuant to which the Company
agreed to sell to the Investors in private placements a total of <ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsOfDividendsCommonStock" scale="0" unitRef="usd">600,000</ix:nonFraction> ordinary shares (the &#8220;Shares&#8221;) of the Company, par
value $<ix:nonFraction contextRef="c201" decimals="5" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.00005</ix:nonFraction> per share, at a purchase price of $<ix:nonFraction contextRef="c201" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">5.00</ix:nonFraction> per share for $<ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="ocg:AggregateOfferingPrice" scale="0" unitRef="shares">3,000,000</ix:nonFraction> (the &#8220;Private Placements&#8221;).
In connection with offering, the Company has also agreed to issue the warrants to the Investors to purchase up to an aggregate of <ix:nonFraction contextRef="c202" decimals="0" format="ixt:num-dot-decimal" name="ocg:AggregateOfferingPrice" scale="0" unitRef="shares">600,000</ix:nonFraction>
ordinary shares at an exercise price of $<ix:nonFraction contextRef="c202" decimals="2" format="ixt:num-dot-decimal" name="ocg:ExercisePrice" scale="0" unitRef="usdPershares">6.00</ix:nonFraction> per share (the &#8220;Warrants&#8221;). The Warrants have a term of one year and are exercisable
by the holder at any time after the date of issuance and prior to the expiration of the Warrants.&#160;The Shares would be issued pursuant
to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. The Company issued
<ix:nonFraction contextRef="c203" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">600,000</ix:nonFraction> shares to investors and recorded net proceed of $<ix:nonFraction contextRef="c204" decimals="-5" format="ixt:num-dot-decimal" name="ocg:NetProceed" scale="6" unitRef="usd">2.0</ix:nonFraction> million as of December 31, 2021. Subscription receivable amounted to $<ix:nonFraction contextRef="c4" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockAmountOfPreferredDividendsInArrears" scale="6" unitRef="usd">1.0</ix:nonFraction>
million as of December 31, 2021. This receivable was received during the year ended December 31, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 6, 2022, the Company entered into a Business
Management Consulting Agreement with Jiangsu Siluete Brand Management Co. Ltd. (&#8220;Jiangsu Siluete&#8221;), pursuant to which the
Company agreed to issue <ix:nonFraction contextRef="c205" decimals="0" format="ixt:num-dot-decimal" name="ocg:AgreegatedShares" scale="0" unitRef="shares">182,280</ix:nonFraction> shares to Gao Mei, who is the shareholder and CEO of Jiangsu Siluete, for consulting fee to Jiangsu Siluete
from March 1, 2022 to February 28, 2023. The total stock compensation for the year ended December 31, 2022 was $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EmployeeServiceShareBasedCompensationTaxBenefitFromExerciseOfStockOptions" scale="0" unitRef="usd">464,814</ix:nonFraction> based on grant
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</div><div>

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</div><!-- Field: Page; Sequence: 150; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"></p><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Warrants</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant&#8217;s
specific terms and applicable authoritative guidance in Financial Accounting Standards Board (&#8220;FASB&#8221;) Accounting Standards
Codification (&#8220;ASC&#8221;) 480, Distinguishing Liabilities from Equity (&#8220;ASC 480&#8221;) and ASC 815, Derivatives and Hedging
(&#8220;ASC 815&#8221;). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet
the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under
ASC 815, including whether the warrants are indexed to the Company&#8217;s own ordinary shares and whether the warrant holders could
potentially require &#8220;net cash settlement&#8221; in circumstances outside of the Company&#8217;s control, among other conditions
for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance
and as of each subsequent quarterly period end date while the warrants are outstanding.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The Company
evaluated its warrants and determined the warrants are indexed to the Company&#8217;s own stock as&#160;the warrants do not contain any
exercise contingencies, the warrants&#8217; settlement amount equals the difference between the fair value of the Company&#8217;s common
stock price and the warrant contract strike price and the only variables which could affect the settlement amount would be inputs to
the fair value for a fixed-for-fixed option on equity shares. The Company also analyzed ASC 815-40-25 to determine whether the warrant
contracts should be classified in stockholders&#8217; equity in the Company&#8217;s balance sheets and concluded that the warrant contracts
meet all of the criteria for classification as equity as the Company is not required to net settle. Based on this analysis, the Company
determined the warrant contracts should be classified as equity.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
is a summary of the status of warrants outstanding and exercisable as of December 31, 2022:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td colspan="2" style="text-align: center; font-weight: bold; border-bottom: Black 1.5pt solid">Weighted<br/>
 Average<br/>
 Exercise<br/>
 Price</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-165">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td>Exercised</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-167">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>Expired</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-168">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-170">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-172">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-173">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font-size: 11pt">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">Warrants outstanding, as of December 31, 2022</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-174">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-175">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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    <td style="font-size: 11pt">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">Warrants exercisable, as of December 31, 2022</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-176">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-177">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Restricted
net assets</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s ability to pay dividends is primarily dependent on the Company receiving distributions from its subsidiary. Relevant
PRC statutory laws and regulations permit payments of dividends by Oriental Culture, the WFOE, its VIE Jiangsu Yanggu and subsidiaries
of Jiangsu Yanggu, Nanjing Yanyu, Nanjing Yanqing, Kashi Longrui, and Kashi Dongfang (collectively &#8220;Jiangsu Yanggu PRC entities&#8221;)
only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of
operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected
in the statutory financial statements of Jiangsu Yanggu PRC entities.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oriental
Culture WFOE and Jiangsu Yanggu PRC entities are required to set aside at least <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ocg:AfterTaxPercentage" scale="-2" unitRef="pure">10</ix:nonFraction>% of their after-tax profits each year, if any, to
fund certain statutory reserve funds until such reserve funds reach <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ocg:ReserveFundsInterest" scale="-2" unitRef="pure">50</ix:nonFraction>% of their registered capital. In addition, Oriental Culture WFOE
and Jiangsu Yanggu PRC entities may allocate a portion of their after-tax profits based on PRC accounting standards to an enterprise
expansion fund and staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable
as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated
by the State Administration of Foreign Exchange (&#8220;SAFE&#8221;).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the foregoing restrictions, Oriental Culture WFOE and Jiangsu Yanggu PRC entities are restricted in their ability to transfer
their net assets to the Company. Foreign exchange and other regulations in the PRC may further restrict Oriental Culture WFOE and Jiangsu
Yanggu PRC entities from transferring funds to the Company in the form of dividends, loans and advances. As of December 31, 2022, amounts
restricted are the net assets of Oriental Culture WFOE and Jiangsu Yanggu PRC entities, which were approximately $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AmountOfRestrictedNetAssetsForConsolidatedAndUnconsolidatedSubsidiaries" scale="0" unitRef="usd">40,620,000</ix:nonFraction>.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Equity
Incentive Plan</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">The
Company&#8217;s 2021 Omnibus Equity Plan (&#8220;the Plan&#8221;) was approved by the board of directors on November 8, 2021 by unanimous
written consent and approved by the shareholders on December 16, 2021. The Plan allows for awards of up to <ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsOfDividendsCommonStock" scale="0" unitRef="usd">4,000,000</ix:nonFraction>&#160;ordinary shares.
No shares have been granted as of the date of this report.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
14 &#8211; Commitments and Contingencies</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Contingencies</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business.
Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate,
are not deemed to be material to the consolidated financial statements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 1, 2022, Mr. Huajun Gao and Mr. Aiming Kong, each an <ix:nonFraction contextRef="c206" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:InvestmentInterestRate" scale="-2" unitRef="pure">11.5</ix:nonFraction>% shareholder of Oriental Culture Holding LTD (the &#8220;Company&#8221;),
were detained by Nan County Public Safety Bureau of Yiyang City, Hunan Province, China. On July 26, 2022, Nan County People&#8217;s Procuratorate
approved the arrest of Mr. Gao and Mr. Kong with charge of illegal business operation of Nanjing Jinwang Art Purchase E-commerce Co.,
Ltd., a company controlled by Mr. Gao and Mr. Kong (&#8220;Nanjing Jinwang&#8221;). On July 1, 2022, the bank accounts of Nanjing Jinwang
were frozen by Nan County Public Safety Bureau, including a trust account into which the customers of the Company deposit their security
deposits in order to trade on the Company&#8217;s two online trading platforms which the Company has entrusted Nanjing Jinwang for escrow.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_5" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Also,
on July 1, 2022, Nan County Public Safety Bureau froze certain bank accounts of Kashi Longrui Business Management Services Co., Ltd.
(&#8220;Kashi Longrui&#8221;), Kashi Dongfang Cangpin Culture Development Co., Ltd. (&#8220;Kashi Dongfang&#8221;) and Nanjing Yanyu
Information Technology Co., Ltd. (&#8220;Nanjing Yanyu&#8221;), all subsidiaries of Jiangsu Yanggu Culture Development Co., Ltd., the VIE because they, each had business relationship with Nanjing Jinwang.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_6" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Neither the Company nor its VIE or subsidiaries of its VIE has received
any notification for enforcement charges from Nan County Public Safety Bureau, other than cash and short term investment in the frozen
bank accounts with balances totaling approximately $<ix:nonFraction contextRef="c206" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:ShortTermInvestments" scale="6" unitRef="usd">16.5</ix:nonFraction> million and due from Nangjng Jinwang of approximately <ix:nonFraction contextRef="c207" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:ShortTermInvestments" scale="6" unitRef="usd">3.4</ix:nonFraction> million relating to
the Nanjing Jinwang investigation as described above as of December 31, 2022. Currently the customers can freely transfer their deposits
and make their withdrawals based on their actual needs. Mr. Gao and Mr. Kong are not officers, directors or employees of the Company,
its VIE or subsidiaries of the VIE.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_7" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
to the investigation of Nanjing Jinwang and frozen bank accounts, the business operations of the Company have been materially and negatively
impacted as its customers experienced difficulties withdrawing their security deposits through online banking and have concerns regarding
their deposited funds. The Company has taken remedial measures to assist its customers in withdrawing security deposits, such as through
manual and in person application with the bank to transfer funds, so that they will have confidence in the Company and continue to list
and trade art and collectible products on the online platforms of the Company. However, there can be no assurance that these measures
will restore customer confidence in using the Company&#8217;s services efficiently or at all.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_8" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
investigation of Mr. Gao, Mr. Kong and Nanjing Jinwang is ongoing. The Company&#160;has and will continue&#160;to communicate with Nan
County Public Safety Bureau and other government authorities to obtain more information regarding the investigation and to attempt to
unfreeze the bank accounts for the subsidiaries of the VIE. The Company will monitor the development of the investigation and will provide
additional information concerning its impact on the Company&#8217;s business in due course.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_9" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Variable
interest entity structure</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_10" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the
Contractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and
(iii) the business operations of the WFOE and the VIEs are in compliance with existing PRC laws and regulations in all material respects.
However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations.
Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing
opinion of the management. If the current corporate structure of the Company or the Contractual Arrangements are found to be in violation
of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations
in the PRC to comply with the changes and the new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect
of the Company&#8217;s current corporate structure or the Contractual Arrangements is remote based on current facts and circumstances.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_11" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has not provided for deferred income tax liabilities on the PRC entities&#8217; undistributed earnings as of December 31, 2022
and 2021, respectively, because the Company controls the timing of the undistributed earnings and it is probable that such earnings will
not be distributed. The Company plans to reinvest those earnings in the PRC indefinitely in the foreseeable future.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_12" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Lease
commitments</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_13" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has three non-cancellable operating lease agreements for three office units. <ix:nonNumeric contextRef="c0" name="ocg:LeaseCommitmentDescription">These lease agreements have lease terms expiring
between end of June 2022 and July 2024 with a monthly rental of approximately $1,900, $14,000 and $3,900, respectively.</ix:nonNumeric></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_14" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
adoption of ASU 2016-02 on January 1, 2021 for the Company&#8217;s only lease that is over one year, the Company recognized approximately
$<ix:nonFraction contextRef="c208" decimals="0" format="ixt:num-dot-decimal" name="ocg:OperatingLeaseRightOfUseAssets" scale="0" unitRef="usd">34,600</ix:nonFraction> of right of use (&#8220;ROU&#8221;) assets and approximately $<ix:nonFraction contextRef="c209" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LeaseAndRentalExpense" scale="0" unitRef="usd">34,600</ix:nonFraction>&#160;of operating lease liabilities based on the present
value of the future minimum rental payments of leases, using incremental borrowing rate of&#160;<ix:nonFraction contextRef="c209" decimals="4" format="ixt:num-dot-decimal" name="ocg:IncrementalBorrowingRate" scale="-2" unitRef="pure">4.75</ix:nonFraction>%.&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->32<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_15" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; ">As
of December 31, 2022, the Company&#8217;s operating leases had a weighted average remaining lease term of
approximately&#160;1.50&#160;years and weighted average discount rate was <ix:nonNumeric contextRef="c2" format="ixt-sec:duryear" name="us-gaap:OperatingLeaseWeightedAverageRemainingLeaseTerm1">4.75</ix:nonNumeric>%.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_16" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s commitments for minimum lease payment under these operating leases as of December 31, 2022 are as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_17" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_16"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfFutureMinimumRentalPaymentsForOperatingLeasesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ending December 31,</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="text-align: center; font-weight: bold; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Minimum<br/>
 lease <br/>
<span style="text-decoration:underline;text-decoration: none">payment</span></b><span style="text-decoration:underline;text-decoration: none">&#160;</span></span></td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left">2023</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearTwo" scale="0" unitRef="usd">21,027</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">2024</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearFour" scale="0" unitRef="usd">11,536</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Total undiscounted liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDue" scale="0" unitRef="usd">32,563</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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    <td style="text-align: left; padding-bottom: 1.5pt">Less: Imputed interest</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_19" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Coronavirus
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</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_20" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beginning
in late 2019, there was an outbreak of a novel strain of coronavirus (COVID-19) in China, which has spread rapidly to many parts of the
world. To prevent and control the spread of the pandemic, the Chinese governments issued administrative orders to impose travel and public
gathering restrictions as well as work from home and self-quarantine restrictions in early 2020.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business, financial condition, and results of operations have been adversely affected by the outbreak of COVID-19 as our net revenues
and net income decreased during the first half of 2020. Starting in July 2020, our revenues and net income recovered as individuals and
entities resumed their business activities which were delayed or postponed due to the COVID-19 outbreak. Our revenue and net income increased
for the year ended December 31, 2021 compared to 2020 as we recovered from impact of the pandemic. Our revenue and net income decreased
for the year ended December 31, 2022 compared to 2021 because the outbreak of the <span>Omicron variant
</span>has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in many part of
China in 2022. Our business and results of operations have been affected due to office closures and disruption in logistics in various
parts of China. China has recently started easing the strict lockdown procedures in early December 2022, which has led to surge in COVID
infections and disrupt our business operations in December 2022 and January 2023. Any future impact of COVID-19 on our operation results
will depend on, to a large extent, future developments and new information that may emerge regarding the duration and resurgence of COVID-19
variants and the actions taken by government authorities to contain COVID-19 or treat its impact, almost all of which are beyond our
control.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><div>

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were no subsequent events that required recognition or disclosures in the consolidated financial statements.</span></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><div>

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Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with the Securities and Exchange
Commission Regulation S-X Rule 5-04 and concluded that it was applicable for the Company to disclose the financial statements for the
parent company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_3" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
subsidiary did not pay any dividends to the Company for the periods presented. For the purpose of presenting parent only financial information,
the Company records its investment in its subsidiaries and VIEs under the equity method of accounting. Such investments are presented
on the separate condensed balance sheets of the Company as &#8220;Investment in subsidiaries and VIEs&#8221; and the income of the subsidiaries
and VIEs is presented as &#8220;Equity income of subsidiaries and VIEs&#8221;. Certain information and footnote disclosures generally
included in financial statements prepared in accordance with U.S. GAAP are not required.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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Company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2022 and 2021.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

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COMPANY BALANCE SHEETS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center">&#160;</p></ix:continuation><div>

</div><div>

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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Additional paid-in capital</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdditionalPaidInCapitalCommonStock" scale="0" unitRef="usd">21,884,962</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Subscription receivable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquityNoteSubscriptionsReceivable" scale="0" sign="-" unitRef="usd">1,000,000</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Statutory reserves</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StatutoryAccountingPracticesStatutoryCapitalAndSurplusBalance" scale="0" unitRef="usd">124,757</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StatutoryAccountingPracticesStatutoryCapitalAndSurplusBalance" scale="0" unitRef="usd">112,347</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Retained earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RetainedEarningsAccumulatedDeficit" scale="0" unitRef="usd">28,315,319</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RetainedEarningsAccumulatedDeficit" scale="0" unitRef="usd">25,092,043</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Accumulated other comprehensive income (loss)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax" scale="0" sign="-" unitRef="usd">1,175,056</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax" scale="0" unitRef="usd">1,097,956</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 27pt">Total shareholders&#8217; equity</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="0" unitRef="usd">49,615,848</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="0" unitRef="usd">47,188,360</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 27pt">Total liabilities and shareholders&#8217; equity</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="ocg:TotalLiabilitiesAndShareholdersEquity" scale="0" unitRef="usd">59,255,245</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="ocg:TotalLiabilitiesAndShareholdersEquity" scale="0" unitRef="usd">61,921,716</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><div>


</div><!-- Field: Page; Sequence: 155; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_7" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PARENT
COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME </b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></p><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_8" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" escape="true" name="srt:CondensedStatementOfComprehensiveIncomeTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; padding-bottom: 1.5pt; text-align: center"><b> Years Ended December 31,</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr>
  <tr style="vertical-align: bottom">
    <td><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" unitRef="usd">3,235,686</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityForeignCurrencyTranslationAdjustments" scale="0" sign="-" unitRef="usd">2,273,012</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt">COMPREHENSIVE INCOME</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTax" scale="0" unitRef="usd">962,674</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c214" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTax" scale="0" unitRef="usd">3,192,764</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><!-- Field: Page; Sequence: 156; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></p><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p><div>


</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_9" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PARENT
COMPANY STATEMENTS OF CASH FLOWS </b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"></p><div>

</div><ix:continuation id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_9"><ix:nonNumeric contextRef="c0" escape="true" name="srt:ScheduleOfCondensedCashFlowStatementTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" unitRef="usd">3,235,686</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-192">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-194">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Common stock issue for service</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="ocg:CommonStockIssueForService" scale="0" unitRef="usd">464,814</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-195">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-196">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Net cash used in operating activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">8,634,040</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c213" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" unitRef="usd">3,473,758</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Purchase of intangible assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-197">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-198">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-199">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Net cash used in investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-200">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-201">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-202">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Proceeds from sale of ordinary shares, net</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c212" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceInitialPublicOffering" scale="0" unitRef="usd">1,000,000.00</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c212" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">1,000,000.00</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c213" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">2,000,000</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c214" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">18,090,668</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">CHANGES IN CASH AND CASH EQUIVALENTS</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCashAndCashEquivalents" scale="0" unitRef="usd">5,473,758</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c215" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCashAndCashEquivalents" scale="0" unitRef="usd">16,613,029</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">CASH AND CASH EQUIVALENTS, beginning of year</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsAtCarryingValue" scale="0" unitRef="usd">22,086,787</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c215" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsAtCarryingValue" scale="0" unitRef="usd">16,613,029</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-203">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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{"company-data": {"conformed-name": "Oriental Culture Holding LTD", "cik": "0001776067", "assigned-sic": "7380", "irs-number": "000000000", "state-of-incorporation": "E9", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "20-F", "act": "34", "file-number": "001-39734", "film-number": "23874277"}, "business-address": {"street1": "ROOM 1402, RICHMAKE COMMERCIAL BUILDING", "street2": "198-200 QUEENS ROAD CENTRAL", "city": "HONG KONG", "state": "K3", "zip": "00000", "phone": "852-21103909"}, "mail-address": {"street1": "ROOM 1402, RICHMAKE COMMERCIAL BUILDING", "street2": "198-200 QUEENS ROAD CENTRAL", "city": "HONG KONG", "state": "K3", "zip": "00000"}}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
20-F
☐
REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31
,
2022
OR
☐
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to
_____________.
OR
☐
SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report:
Commission file number:
001-39734
Oriental Culture Holding, LTD.
(Exact name of Registrant as Specified in its Charter)
Cayman Islands
(Jurisdiction of Incorporation or Organization)
Room 1402
,
Richmake Commercial Building
198-200 Queen's Road Central
,
Hong Kong
(Address of Principal Executive Offices)
Yi Shao
Chief Executive Officer
Room 1402
,
Richmake Commercial Building
198-200 Queen's Road Central
,
Hong Kong
Telephone:
(852)
2110-3909
Email: ir@ocgroup.hk
(Name, Telephone, E-mail and/or Facsimile Number
and Address of Company Contact Person)
Securities registered or to be registered pursuant
to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on
which registered
Ordinary Shares, par value $0.00005
OCG
Nasdaq
Capital Market
Securities registered or to be registered pursuant
to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:
None
(Title of Class)
Indicate the number of outstanding shares of each
of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.
As of December 31, 2022, there were
21,226,992
ordinary shares outstanding.
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
☐
No
☒
If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. Yes
☐
No
☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large
accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated
filer
☐
Non-accelerated filer
☒
Emerging
growth company
☒
If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange
Act.
☐
† The term "new or revised
financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting
Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant
has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.
☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).
☐
Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:
☒
U.S.
GAAP
☐
International Financial Reporting Standards as
issued by the International Accounting Standards Board
☐
Other
☐
If "Other" has been checked in response
to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17
☐
Item
18
☐
If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PAST FIVE YEARS)
Indicate by check mark whether the registrant
has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent
to the distribution of securities under a plan confirmed by a court.
☐
Yes
☐
No
TABLE OF CONTENTS
Page
Introduction
ii
Forward-looking Statements
iii
PART I
Item 1.
Identity of Directors, Senior Management and Advisers
1
Item 2.
Offer Statistics and Expected Timetable
1
Item 3.
Key Information
1
Item 4.
Information On The Company
44
Item 4A.
Unresolved Staff Comments
68
Item 5.
Operating And Financial Review And Prospects
68
Item 6.
Directors, Senior Management And Employees
83
Item 7.
Major Shareholders And Related Party Transactions
91
Item 8.
Financial Information
94
Item 9.
The Offer And Listing
94
Item 10.
Additional Information
94
Item 11.
Quantitative And Qualitative Disclosures About Market Risk
106
Item 12.
Description Of Securities Other Than Equity Securities
107
PART II
Item 13.
Defaults, Dividend Arrearages And Delinquencies
108
Item 14.
Material Modifications To The Rights Of Security Holders And Use Of Proceeds
108
Item 15.
Controls And Procedures
108
Item 16A.
Audit Committee Financial Expert
110
Item 16B.
Code Of Ethics
110
Item 16C.
Principal Accountant Fees and Services
110
Item 16D.
Exemptions From The Listing Standards For Audit Committees
111
Item 16E.
Purchases Of Equity Securities By The Issuer And Affiliated Purchasers
111
Item 16F.
Change In Registrant's Certifying Accountant
111
Item 16G.
Corporate Governance
111
Item 16H.
Mine Safety Disclosure
111
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
111
PART III
Item 17.
Financial Statements
112
Item 18.
Financial Statements
112
Item 19.
Exhibits
112
i
Introduction
In this annual report on Form 20-F, unless otherwise
indicated, "we," "us," "our," the "Company", "Oriental Culture", "Registrant"
and "OCG" refer to Oriental Culture Holding LTD., a company incorporated in the Cayman Islands, its predecessor entities,
its subsidiaries, variable interest entity and the subsidiaries of the consolidated variable interest entity.
Unless indicated otherwise, references to:
"China" or the "PRC" are
to the People's Republic of China, excluding, for the purpose of this report only, Hong Kong special administrative region, Macau
special administrative region and Taiwan;
"EIT" are to PRC enterprise income
tax;
"HK$," "HK dollars," "HKD"
are to the legal currency of the Hong Kong special administrative region;
"HKDAEx" are to HKDAEx Limited, a
company incorporated under laws of Hong Kong and a wholly owned subsidiary of Oriental Culture Holding LTD;
"International Exchange" are to China
International Assets and Equity of Artworks Exchange Limited, a company incorporated under the laws of Hong Kong and a wholly owned subsidiary
of Oriental Culture Holding LTD;
"Jiangsu Yanggu" are to Jiangsu Yanggu
Culture Development Co., Ltd., a company incorporated under the laws of China, which is the variable interest entity that carries out
our main business operations in China;
"MOFCOM" are to the Ministry of Commerce
of the PRC;
"Ordinary Share(s)" are our ordinary
shares with a par value of US$0.00005 per share;
"Oriental Culture," "we,"
"us," "our company," and "our" are to Oriental Culture Holding LTD, a Cayman Islands exempted company
with limited liability, and its subsidiary and consolidated entity;
"Oriental Culture BVI" are to Oriental
Culture Development LTD, a company incorporated under the laws of British Virgin Islands and a wholly owned subsidiary of Oriental Culture
Holding LTD;
"Oriental Culture HK" are to HK Oriental
Culture Investment Development Limited, a company incorporated under the laws of Hong Kong and a wholly owned subsidiary of Oriental Culture
BVI;
"Nanjing Rongke" or "WFOE"
are to Nanjing Rongke Business Consulting Service Co., Ltd. a company incorporated in China and a wholly-owned subsidiary of Oriental
Culture HK;
"RMB" and "Renminbi" refer
to the legal currency of China;
"SAFE" are to the State Administration
of Foreign Exchange;
"US$," "U.S. dollars,"
"$" and "dollars" are to the legal currency of the United States;
"VIE" are to variable interest entity;
and
Our business is primarily conducted in China
and Hong Kong, an all of our revenues are received and denominated in RMB and Hong Kong Dollars. RMB is not freely convertible into foreign
currency and all foreign exchange transactions must take place through authorized institutions.  This annual report contains
translations of Renminbi and HK$ amounts into U.S. dollars at specified rates solely for the convenience of the reader. We make no representation
that the Renminbi, HK$ or U.S. dollar amounts referred to in this report could have been or could be converted into U.S. dollars, HK$
or Renminbi, as the case may be, at any particular rate or at all. On December 31, 2022, the exchange rate was RMB 6.9646 to $1.00 which
is the intermediate exchange rate announced by the People's Bank of China and HK$7.8015 to $1.00 which is the unified exchange
rate as quoted by the Federal Reserve.
We completed an initial public offering of our
ordinary shares at an initial offering price of US$4.00 per share on December 17, 2020. Our ordinary shares, par value US$0.00005
per share, are traded on the Nasdaq Capital Market under the symbol "OCG."
ii
FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements"
for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that represent our beliefs, projections
and predictions about future events. Known and unknown risks, uncertainties and other factors, including those listed under "Risk
Factors," may cause our actual results, performance or achievements to be materially different from those expressed or implied by
the forward-looking statements. All statements other than statements of historical fact are "forward-looking statements,"
including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management
for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic
conditions or performance, any statements of management's beliefs, goals, strategies, intentions and objectives, and any statements
of assumptions underlying any of the foregoing. Words such as "may", "will", "should", "could",
"would", "predicts", "potential", "continue", "expects", "anticipates",
"future", "intends", "plans", "believes", "estimates" and similar expressions,
as well as statements in the future tense, identify forward-looking statements.
We have based these forward-looking statements
largely on our current expectations and projections about future events that we believe may affect our financial condition, results of
operations, business strategy and financial needs. These forward-looking statements include statements relating to:
●
our goals and strategies;
●
our future business development, financial conditions and results of operations;
●
the expected growth of the collectibles and artwork trading and related services marketplace market in Hong Kong and China;
●
fluctuations in interest rates;
●
our expectations as to collectability of the revenues from collectibles and artwork trades facilitated through our platform and our services to our customers;
●
our expectations regarding demand for and market acceptance of our products and services;
●
our expectations regarding our relationships with collectibles and artwork buyers and sellers;
●
competition in our industry; and
●
●
relevant government policies and regulations relating
    to our industry; and
impact of COVID-19 on our business and financial
    conditions.
These forward-looking statements involve various
risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations
may later be found to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors
that could cause our actual results to be materially different from our expectations are generally set forth in "Risk Factors"
and other sections in this report. You should thoroughly read this report and the documents that we refer to with the understanding that
our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements
by these cautionary statements.
This report contains certain data and information
that we obtained from various government and private publications. Statistical data in these publications also include projections based
on a number of assumptions. Our industry may not grow at the rate projected by market data, or at all. Failure of this market to grow
at the projected rate may have a material and adverse effect on our business and the market price of our ordinary shares. In addition,
the rapidly changing nature of the online art and collectible marketplace industry results in significant uncertainties for any projections
or estimates relating to the growth prospects or future condition of our market. Furthermore, if any one or more of the assumptions underlying
the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should
not place undue reliance on these forward-looking statements.
The forward-looking statements made in this report
relate only to events or information as of the date on which the statements are made in this report. Except as required by law, we undertake
no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and
the documents that we refer to in this report and any exhibits filed to this report, completely and with the understanding that our actual
future results may be materially different from what we expect.
iii
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not Applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable.
ITEM 3. KEY INFORMATION
Our Holding Company Structure and Contractual
Arrangements with the Consolidated VIE and Its Individual Shareholders in China
We are a Cayman Islands holding company without
material operations and our business is conducted by our subsidiaries in Hong Kong and variable interest entity ("VIE") and
its subsidiaries in China and this structure involves unique risks to investors. We are not a Chinese operating company and that our business
in China is conducted through contractual arrangements with the VIE and its subsidiaries. However, the VIE agreements have not been truly
tested in the courts in China. Chinese regulatory authorities could disallow this structure, which would likely result in a material change
in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the
value of such securities to significantly decline or become worthless. See "
Item 3. Key Information—D. Risk Factors—
"If the Chinese government determines that the contractual arrangements through which we control the VIE do not comply with applicable
regulations, our business could be adversely affected." and "Uncertainties and quick change in the interpretation and enforcement
of Chinese laws and regulations with little advance notice could result in a material and negative impact on our business operations,
decrease the value of our securities and limit the legal protections available to you and us."
1
There are legal and operational risks associated
with being based in and having our operations in Hong Kong and China. Recently, the PRC government initiated a series of regulatory actions
and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the
securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting
new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. On July 6, 2021, the
General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement
to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among
other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation,
to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application
of the PRC securities laws. On December 28, 2021, Cybersecurity Review Measures were published by Cyberspace Administration of China or
the CAC, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry
of State Security, Ministry of Finance, Ministry of Commerce, People's Bank of China, State Administration of Radio and Television,
China Securities Regulatory Commission ("CSRC"), State Secrecy Administration and State Cryptography Administration and became
effective on February 15, 2022, which provides that, Critical Information Infrastructure Operators ("CIIOs") that purchase
internet products and services and Online Platform Operators engaging in data processing activities that affect or may affect national
security shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published the Administration
Measures for Cyber Data Security (Draft for Public Comments), or the "Cyber Data Security Measure (Draft)", which requires
cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with
the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and Archives Administration
of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic company that seeks
to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations, enhance legal awareness
of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system,
and take necessary measures to fulfill confidentiality and archives administration obligations. On July 7, 2022, CAC promulgated the Measures
for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply
for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important
data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1
million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has
already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas
since January 1st of the previous year; and (iv) other circumstances under which the data cross-border transfer security assessment
is required as prescribed by the CAC. On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Enterprises (the "New Overseas Listing Rules") with five interpretive guidelines, which will
take effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises to complete filings with relevant governmental
authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public
offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas
market; c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s),
share swap, transfer of shares or other means. According to the Notice on Arrangements for Overseas Securities Offering and Listing by
Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already completed overseas listing or (ii) has
already obtained the approval for the offering or listing from overseas securities regulators or exchanges but has not completed such
offering or listing before effective date of the new rules and completes such offering or listing before September 30, 2023 will be considered
as an existing listed company and is not required to make any filing until it conducts a new offering in the future. Furthermore, upon
the occurrence of any of the material events specified below after an issuer has completed its offering and listed its securities on an
overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working days after the occurrence and public disclosure
of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other competent
authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting. As of the date
of this report, these new laws and guidelines have not impacted the Company's ability to conduct its business, list and trade on
a U.S. or other foreign exchange; however, there are uncertainties in the interpretation and enforcement of these new laws and guidelines,
which could materially and adversely impact our business and financial outlook, may impact our ability to accept foreign investments,
offer our securities to investors or continue to list on a U.S. or other foreign exchange, and could impact our ability to conduct our
business. Any change in foreign investment regulations, and other policies in China or related enforcement actions by China government
could result in a material change in our operations and the value of our securities and could significantly limit or completely hinder
our ability to offer our securities to investors or cause the value of our securities to significantly decline or be worthless. The Holding
Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020. In accordance with the HFCA Act, trading in
securities of any registrant on a national securities exchange or in the over-the-counter trading market in the United States may
be prohibited if the PCAOB determines that it cannot inspect or fully investigate the registrant's auditor for three consecutive
years beginning in 2021, and, as a result, an exchange may determine to delist the securities of such registrant. On December 29, 2022,
a legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations Act") was signed
into law by President Biden, which has shorten the Holding Foreign Companies Accountable Act's timeline for a potential trading
prohibition from three years to two years, thus reducing the time period before our securities may be prohibited from trading or delisted
if our auditor is unable to meet the PCAOB inspection requirement. The Company's auditor, Wei, Wei & Co., LLP is headquartered
in the U.S. and the Public Company Accounting Oversight Board (United States) (the "PCAOB") currently has access to inspect
the working papers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021, which
determinations were vacated on December 15, 2022. The Holding Foreign Companies Accountable Act and related regulations currently does
not affect the Company as the Company's auditor is subject to PCAOB's inspection and investigation.
2
Permissions Required from the PRC Authorities
for Our Operations
Jiangsu Yanggu and its subsidiaries are incorporated
and operating in mainland China and they have received all required permissions from Chinese authorities to operate its current business
in China, which are their business licenses. Other than the business licenses, the VIE and its subsidiaries are not required to obtain
permit and approval from Chinese authorities to operate our business while the Company is subject to New Overseas Listing Rules for offering
the securities to investors. We, our subsidiaries, or VIE and its subsidiaries are not covered by permissions requirements from the China
Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency that is required to
approve the VIE's business and operations. As the VIE and its subsidiaries provide marketing, warehouse storage and technical maintenance
services in China, based on the advice of our PRC counsel Jiangsu Taikun Law Firm ("Taikun Law Firm"), we do not believe that
we are a Critical Information Infrastructure Operator ("CIIO") or an Online Platform Operator as defined in Cybersecurity
Review Measures published by Cyberspace Administration of China, National Development and Reform Commission, Ministry of Industry and
Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People's
Bank of China, State Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and
State Cryptography Administration on December 28, 2021 and became effective on February 15, 2022. As of the date of this report, we, our
subsidiaries, the VIE and its subsidiaries (1) are not required to obtain permissions from any PRC authorities to issue our securities
to foreign investors except for the filing requirement under New Overseas Listing Rules, (2) are not subject to permission requirements
from China Securities Regulatory Commission (the "CSRC"), Cyberspace Administration of China ("CAC") or any
other authority that is required to approve of the VIE's operations, and (3) have not received or were denied such permissions by
any PRC authorities. Nevertheless, the General Office of the Central Committee of the Communist Party of China and the General Office
of the State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,"
or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration
over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Given the
current PRC regulatory environment, it is uncertain when and whether we, our PRC subsidiary or VIE and its subsidiaries, will be required
to obtain permission from the PRC government to be listed on a U.S. exchange in the future, and even when such permission is obtained,
whether it will be rescinded. If we, our subsidiaries, or the VIE and its subsidiaries do not receive or maintain such permissions or
approvals, inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations
change and we are required to obtain such permissions or approvals in the future, it could significantly limit or completely hinder our
ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or become
worthless.
Dividend Distribution and Cash Transfer
Between the Holding Company, Subsidiary and VIE.
We are an online provider of collectibles and
artwork e-commerce services and we facilitate trading by individual and institutional customers of all kinds of collectibles, artworks
and certain commodities on our leading online platforms owned by our subsidiaries in Hong Kong, namely the China International Assets
and Equity of Artworks Exchange Limited and HKDAEx Limited. We also provide online and offline integrated marketing, warehouse storage
and technical maintenance services to our customers through the VIE and its subsidiaries in China.
Our PRC operating entities receive their revenues
in RMB. Under our current corporate structure, to fund any cash and financing requirements we may have, the Company may rely on certain
dividend payments from our subsidiaries in Hong Kong and WFOE in China. Our WFOE receives payments from Jiangsu Yanggu, pursuant to the
VIE Agreements. WFOE may make distribution of such payments to Oriental Culture HK as dividends.
Under existing PRC foreign exchange regulations,
payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made
in foreign currencies without prior approval from State Administration of Foreign Exchange or SAFE by complying with certain procedural
requirements. Therefore, our PRC subsidiary, WFOE is able to pay dividends in foreign currencies to us without prior approval from SAFE,
subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange
regulations, such as the overseas investment registrations by the shareholders of the Company who are PRC residents. Approval from or
registration with appropriate government authorities is, however, required where the RMB is to be converted into foreign currency and
remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may
also at its discretion restrict access in the future to foreign currencies for current account transactions. For our Hong Kong subsidiaries,
our subsidiary in British Virgin Islands and the holding company ("Non-PRC Entities"), there is no restrictions on foreign
exchange for such entities and they are able to transfer cash among these entities, across borders and to US investors. Also, there is
no restrictions and limitations on the abilities of Non-PRC Entities to distribute earnings from their businesses, including from subsidiaries
to the parent company or from the holding company to the U.S. investors as well as the abilities to settle amounts owed.
3
We are a holding company, and we rely on dividends
and other distributions on equity paid by our subsidiaries for our cash and financing requirements, including the funds necessary to pay
dividends and other cash distributions to our shareholders and service any debt we may incur. If any of our subsidiaries incurs debt on
its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions
to us. Current PRC regulations permit our WFOE to pay dividends to the Company only out of its accumulated profits, if any, determined
in accordance with Chinese accounting standards and regulations. In addition, our subsidiaries, VIE and its subsidiaries in China are
required to set aside at least 10% of their after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches
50% of its registered capital. Each such entity in China is also required to further set aside a portion of its after-tax profits to fund
the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although
the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained
earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. In
addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable
to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC
central government and the governments of other countries or regions where the non-PRC resident enterprises are tax resident. Pursuant
to the tax agreement between mainland China and the Hong Kong Special Administrative Region, the withholding tax rate in respect to the
payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. However, if the relevant
tax authorities determine that our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the
relevant tax authorities may adjust the favorable withholding tax in the future. Accordingly, there is no assurance that the reduced 5%
withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce
the amount of dividends we may receive from our PRC subsidiaries.
As of the date of this report, neither the WFOE
nor any of our subsidiaries in Hong Kong has made any dividends or distributions to the Company, the Company has not made any dividends
or distribution to its investors. We intend to keep any future earnings to re-invest in and finance the expansion of our business, and
we do not anticipate that any cash dividends will be paid in the foreseeable future. Under the Cayman Islands law, a Cayman Islands company
may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid
if this would result in the company being unable to pay its debts due in the ordinary course of business. We currently do not have cash
management policies and procedures in place that dictate how funds are transferred through our organization. Rather, the funds can be transferred
in accordance with the applicable laws and regulations.
As of the date of this report, no dividends or
distributions have been made between the holding company, its subsidiaries, and consolidated VIEs, or to investors including the U.S.
investors. The holding company, its subsidiaries, and VIE do not have any plan to distribute dividend or settle amounts owed under the
VIE Agreements in the foreseeable future. To the extent cash and/or assets in the business are in the PRC and/or Hong Kong or our PRC
and/or Hong Kong entities, including HKDAEx, International Exchange, Oriental Culture HK, the VIE, and the WFOE, such funds and/or assets
may not be available to fund operations or for other use outside of the PRC and/or Hong Kong due to interventions in or the imposition
of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash and/or assets. The cash
transfer among the holding company, its subsidiaries and VIE is typically transferred through payment for intercompany services or intercompany
borrowing between holding company, subsidiaries and VIE. There are no tax consequences for the intercompany borrowings and the payment
for intercompany services, except for the standard value added taxes and/or income taxes for the revenues and/or profits generated from
such services.
4
Selected Condensed Consolidated Financial Schedule of the Company
and Its Subsidiaries and VIE
Set forth below is selected consolidating statements
of income and cash flows for the years ended December 31, 2022 and 2021 and selected balance sheet information as of December 31, 2022
and 2021 showing financial information for the Company (excluding the VIEs), the VIEs, eliminating entries and consolidated information.
ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
FOR THE YEAR ENDED DECEMBER 31, 2022
Holding
HK
    Subsidiaries
BVI
Elimination
Total
    outside PRC
WFOE
VIE
Elimination
Total
inside PRC
Elimination
Consolidated
ASSETS
CURRENT ASSETS
Cash
    and cash equivalents
$
14,452,747
$
35,299
$
$
14,488,046
$
817,659
$
1,883,128
$
2,700,787
$
$
17,188,833
Restricted
    cash
11,796,388
11,796,388
11,796,388
Short-term
    investment
Restricted
    investment
4,703,323
4,703,323
4,703,323
Accounts
    receivable, net
207
207
207
Accounts
    receivable, related party
29,311
29,311
29,311
Other
    receivables and prepaid expenses
1,324,063
10,803
1,334,866
3,107,080
3,107,080
4,441,946
Deposit
Other
    receivable related party
3,421,345
3,421,345
3,421,345
Other
    receivable - intercompany
3,224,949
1,000,000
(3,224,949
)(d1)
1,000,000
182,959
9,300,687
9,483,646
(1,000,000
)(d2)
(9,000,690
)(d3)
(299,997
)(d4)(d5)
Other
    receivable - VIE
100,189
100,189
40,619,835
(40,619,835
)(b)
(100,189
)(d4)
Escrow
600,000
600,000
(182,959
)(d5)
600,000
Total
    current assets
19,601,759
1,146,498
(3,224,949
)
17,523,308
41,620,453
34,241,262
(40,619,835
)
35,241,880
(10,583,835
)
42,181,353
-
PROPERTY
    AND EQUIPMENT, NET
5,937
5,937
9,417,776
9,417,776
9,423,713
OTHER ASSETS
Certificate
    deposit
Right
    of use assets
34,345
34,345
34,345
Escrow
Investment
932,552
932,552
932,552
Intangible
    assets, net
740,697
740,697
76,188
76,188
816,885
Investment
    in subsidiaries
39,653,486
40,620,453
(39,268,629
)(a)
41,005,310
(41,005,310
)(c)
Other
    receivable - intercompany
-
Total
    other assets
39,653,486
775,042
40,620,453
(39,268,629
)
41,780,352
1,008,740
1,008,740
(41,005,310
)
1,783,782
-
Total
    assets
59,255,245
$
1,927,477
40,620,453
(42,493,578
)
$
59,309,597
$
41,620,453
$
44,667,778
(40,619,835
)(b)
$
45,668,396
$
(51,589,145
)
$
53,388,848
LIABILITIES
    AND SHAREHOLDERS' EQUITY
CURRENT
    LIABILITIES
Accounts
    payable
70,000
$
103
$
$
70,103
$
$
2,889,312
$
2,889,312
$
$
2,959,415
Accounts
    payable - related parties
28,727
28,727
28,727
Deferred
    revenue
449,037
449,037
449,037
Other
    payables and accrued liabilities
11,770
11,770
278,380
278,380
290,150
Taxes
    payable
13,372
13,372
13,372
Lease
    liability - Current
20,808
20,808
20,808
Other
    payable - intercompany
2,985,193
(2,985,193
)(d1)
1,000,000
389,115
1,389,115
(1,000,000
)(d2)
(178,116
)(d5)
(460,935
)(d4)
Other
    payable - VIE
9,569,397
249,936
9,819,333
(9,569,397
)(d3)
Total
    current liabilities
9,639,397
3,267,810
(2,985,193
)
9,922,014
1,000,000
4,047,943
5,047,943
(11,208,448
)
3,761,509
Lease liability - Non-current
11,491
11,491
11,491
Total
    liabilities
9,639,397
3,279,301
(2,985,193
)
9,933,505
1,000,000
4,047,943
5,047,943
(11,208,448
)
3,773,000
COMMITMENTS
    AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Capital
22,350,828
1,495,505
(1,495,505
)(a)
22,350,828
113,299
(113,299
)(b)
22,350,828
Subscription receivable
Statutory
    reserves
124,757
(a)
124,757
124,757
(124,757
)
(b)
124,757
Retained
    earnings
28,315,319
(2,839,315
)
42,078,998
(39,239,683
)(a)
28,315,319
42,078,998
42,087,312
(42,087,312
)
(b)
42,078,998
(42,078,998
)(c)
28,315,319
Accumulated
    other comprehensive income (loss)
(1,175,056
)
(8,014
)
(1,458,545
)
1,226,803
(a)(d1)
(1,414,812
)
(1,458,545
)
(1,705,533
)
1,705,533
(b)
(1,458,545
)
1,698,301
(c)(d3-d5)
(1,175,056
)
Total
    shareholders' equity
49,615,848
(1,351,824
)
40,620,453
(39,508,385
)
49,376,092
40,620,453
40,619,835
(40,619,835
)
40,620,453
(40,380,697
)
49,615,848
Total
    liabilities and shareholders' equity
$
59,255,245
$
1,927,477
$
40,620,453
(42,493,578
)
$
59,309,597
$
41,620,453
$
44,667,778
(40,619,835
)
$
45,668,396
$
(51,589,145
)
$
53,388,848
(a)
To eliminate holding company's investment of subsidiaries
outside PRC.
(b)
To eliminate receivable as result of contractual agreement
from VIE with VIE's equity.
(c)
To eliminate holding
company's investment of WFOE.
(d)
To eliminate intercompany balances:
Due from
Due to
Amount
(1)
HK subsidiaries
Holding
3,224,949
intercompany borrowing
(2)
WFOE
HK subsidiaries
1,000,000
intercompany borrowing
(3)
Holding
VIE
9,000,690
Real estate deposit paid by VIE, refunded to Holding
(4)
HK subsidiaries
VIE
460,935
Intercompany balance
(5)
WFOE
VIE
178,116
Intercompany balance
5
ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES
UNAUDITED CONDENDSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2022
Holding
HK Subsidiaries
BVI
Elimination
Total outside PRC
WFOE
VIE
Elimination
Total
inside PRC
Elimination
Consolidated
Operating revenues
$
$
$
$
$
$
17,813,254
$
$
17,813,254
$
(115
)(c)
$
17,813,139
Cost of revenues
(6,560
)
(30,429
)
(36,989
)
(959,470
)
(959,470
)
(996,459
)
Gross profit
(6,560
)
(30,429
)
(36,989
)
16,853,784
16,853,784
(115
)
16,816,680
Operating expenses
(2,862,517
)
(1,239,660
)
(4,102,177
)
(10,125,268
)
(10,125,268
)
115
(c)
(14,227,329
)
Income from operations
(2,869,077
)
(1,270,089
)
(4,139,166
)
6,728,516
6,728,516
2,589,351
Other income(expense)
59,758
(176
)
59,582
618
590,947
591,565
651,147
Provision for income tax
(4,812
)
(4,812
)
(4,812
)
Income from VIE
7,314,651
(7,314,651
)(b)
Income from subsidiaries
6,045,005
7,315,269
(6,045,005
)(a)
7,315,270
(7,315,270
)(d)
Net income
$
3,235,686
$
(1,270,265
)
$
7,315,269
(6,045,005
)
$
3,235,686
$
7,315,269
$
7,314,651
$
(7,314,651
)
$
7,315,269
$
(7,315,270
)
$
3,235,686
(a)
to
eliminate outside PRC subsidiaries income from Holding
(b)
to
eliminate VIE income by WFOE
(c)
to
eliminate intercompany revenue and expenses for services provided by the Company's HK subsidiary to its VIE.
(d)
to
eliminate WFOE investment income by Holding
ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2022
Holding
HK Subsidiaries
BVI
WFOE
VIE
Total
Elimination
Consolidated
Net cash provided by (used in) operating activities
$
(8,634,040
)
$
21,641
$
$
(182,341
)
$
7,583,355
$
(1,211,385
)
$
$
(1,211,385
)
Net cash provided by (used in )investing activities
(6,408
)
614,879
608,471
$
608,471
Net cash provided by (used in) financing activities
1,000,000
1,000,000
$
1,000,000
Effect of exchange rate
3,050
(812,962
)
(809,912
)
$
(809,912
)
Net increase in cash and cash equivalents
(7,634,040
)
18,283
(182,341
)
7,385,272
(412,826
)
$
(412,826
)
CASH AND CASH EQUIVELENTS, beginning of year
22,086,787
17,015
1,000,000
6,294,245
29,398,047
$
29,398,047
CASH AND CASH EQUIVELENTS, end of year
$
14,452,747
$
35,298
$
$
817,659
$
13,679,517
$
28,985,221
$
$
28,985,221
6
3.A.
[Reserved]
3.B. Capitalization and Indebtedness
Not Applicable.
3.C. Reasons For The Offer And Use Of Proceeds
Not Applicable.
3.D. Risk Factors
An investment in our ordinary shares involves
a high degree of risk. You should carefully consider the risks and uncertainties described below together with all other information contained
in this annual report, including the matters discussed under the headings "Forward-Looking Statements" and "Operating
and Financial Review and Prospects" before you decide to invest in our
ordinary shares
. We are a holding company with
substantial operations in Hong Kong and China and are subject to a legal and regulatory environment that in many respects differs from
the United States. If any of the following risks, or any other risks and uncertainties that are not presently foreseeable to us, actually
occur, our business, financial condition, results of operations, liquidity and our future growth prospects could be materially and adversely
affected.
Summary of Risk Factors
An investment in our ordinary shares involves
significant risks. Below is a summary of material risks we face, organized under relevant headings. These risks are discussed more fully
in
Item 3. Key Information—D. Risk Factors
.
Risks Related to Our Business
●
We have a limited operating history in an evolving market, which makes it difficult to evaluate our future prospects.
●
If we become subject to additional scrutiny, criticism and negative publicity involving U.S.-listed China-based companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, and our reputation and could result in a loss of your investment in our ordinary shares, especially if such matter cannot be addressed and resolved favorably.
●
Due to the nature of our business, valuable works of art are stored at our contracted facilities. Such works of art could be subject to damage or theft, which could have a material adverse effect on our operations, reputation and brand.
●
System and network limitations or failures could harm our business.
●
●
We face risks related to health epidemics and
    other outbreaks, including the coronavirus (COVID-19), which has caused and may continue to cause business disruptions, resulting in a
    material adverse impact to our financial condition and results of operations.
Nan County Public Safety Bureau has frozen certain
    bank accounts of the subsidiaries of Jiangsu Yanggu due to the investigation of major shareholders of the Company and its related party
    Nanjing Jinwang which has and could continue to materially and negatively impact the business operations and financial results of the
    Company.
Risks Related to Our Corporate Structure
●
If the PRC government deems that the contractual arrangements in relation to the consolidated variable interest entity do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
●
We rely on contractual arrangements with the VIE and the shareholders of the VIE for our business operations, which may not be as effective as direct ownership in providing operational control.
●
Any failure by the consolidated VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.
7
Risks Related to Doing Business in China
●
●
If the Chinese government determines that the
    contractual arrangements through which we control the VIE do not comply with applicable regulations, our business could be adversely affected.
Uncertainties and quick change in the interpretation
    and enforcement of Chinese laws and regulations with little advance notice could result in a material and negative impact our business
    operations, decrease the value of our securities and limit the legal protections available to you and us.
●
Any lack of requisite approvals, licenses or permits applicable to our business may have a material and adverse impact on our business, financial condition and results of operations.
●
If any company incorporated in Hong Kong operating online collectibles and/or artwork trading platform is subject to PRC current or future laws and regulations regarding collectible or artwork trading businesses, our operations may be materially adversely affected due to the uncertainty whether we would be able to obtain approval from the provincial government and complete the filing with "Inter-Ministerial Joint Meetings of Clean-up and Corrective Actions of Various Trading Platforms" (the "Joint Meeting") led by the China Securities Regulatory Commission (the "CSRC").
●
Regulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations in China.
●
If we cannot effectively secure our network, customers' personal information, which we collect through our online platform, it may be subject to leakage or theft, and if the regulators believe we have failed to fulfill our network security obligations, our online platform may be required to suspend operations or to make rectification, which may have a material adverse effect on our operations and financial results due to the large amount of our daily trading conducted online.
●
The preferential tax treatment for Kashi Longrui and Kashi Dongfang is only for 5 years that has expired in December 2022 and the expiration of preferential tax treatment will materially and negatively affect our financial results.
Risks Related to Doing Business in Hong Kong
●
It will be difficult to acquire jurisdiction and enforce liabilities against our officers, directors and assets based in Hong Kong.
●
We may have difficulty establishing adequate management, legal and financial controls in Hong Kong, which could impair our planning processes and make it difficult to provide accurate reports of our operating results.
●
Our business may be affected by the Personal Data (Privacy) Ordinance of Hong Kong.
Risks Related to Our Ordinary Shares
●
Our ordinary shares may be thinly traded and you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.
●
You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the United States and it may be difficult for a shareholder of ours to effect service of process or to enforce judgements obtained in the United States courts.
●
We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
8
Risks Related to Our Business
We have a limited operating history in an
evolving market, which makes it difficult to evaluate our future prospects.
We launched our Company in 2018 and have a limited operating history.
The success of our business depends primarily on the number of collectibles and artwork products listed and traded on our platforms. Therefore,
our ability to continue to attract customers to list, sell and buy collectibles and artwork products on our platform is critical to the
continued success and growth of our business. This in turn will depend on several factors, including our ability to develop new products,
services and markets, manage our growth while maintaining consistent and high-quality services, and make our platform more efficient and
effective for our customers. During the outbreak of COVID-19 and government's efforts to contain the spread of the pandemic during
the first half of 2020, our ability to accept, appraise, list new products and provide warehousing services for collectibles and artwork
products as well as our marketing activities have been severely disrupted and hindered due to the office closure, quarantine, travel and
transportation restrictions imposed by the government, which have caused material negative impact on our business and results of operations.
In addition, we originally planned to expand our business internationally, especially in the United States in 2020, including to carry
out a comprehensive brand promotion in the U.S. and cooperate with American collectible and artwork agencies to select Western-themed
collectibles and artworks for listing on our platform. Due to the outbreak of the pandemic in China and the U.S., we delayed the implementation
of our international market and business development plan as our management team is unable to travel to the U.S. visiting office spaces
and meeting with our business partners. Most of the businesses in China have reopened and resumed since the second half of 2020. However,
travel restrictions, quarantine requirements and/or temporary closure of office buildings and facilities
were imposed by local governments due to the outbreak of Omicron variant in Hong Kong and many cities in China, including Shenzhen, Xi'an,
Shanghai, Guangzhou, Nanjing, Nanchang and Taiyuan in 2022.
In early December 2022, Chinese government eased the strict control
measure for COVID-19, which has led to surge in increased infections and disruption in our business operations in December 2022 and January
2023. Any future impact of COVID-19 on our operation results will depend on, to a large extent, future developments and new information
that may emerge regarding the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain
COVID-19 or treat its impact, almost all of which are beyond our control.
As our business develops, or in response to competition,
we may continue to introduce new services or make adjustments to our existing services, or make adjustments to our business model, including
the development of NFT and Metaverse related business and services. In connection with the introduction of new services, or in response
to general economic conditions, we may impose more stringent customer qualifications to ensure the quality of our customers, which may
negatively affect the growth of our business. Any significant change to our business model may not achieve expected results and may have
a material and adverse impact on our financial conditions and results of operations. It is therefore difficult to effectively assess our
future prospects.
If we fail to attract potential clients and educate
them about the value of our services, if the market for our marketplace does not develop as we expect, or if we fail to address the needs
of our target market, our business and results of operations will be harmed.
Our historical financial results may not
be indicative of our future performance.
Our business has achieved rapid growth since our
inception. Our net revenues increased from nil for the period from March 2018 (when we commenced our operations) to approximately $17.6
million for the year ended December 31, 2022 and approximately $37.6 million for year ended December 31, 2021. However, our
historical growth rate and the limited history of our operations make it difficult to evaluate our prospects. We may not be able to sustain
our historically rapid growth or may not be able to grow our business at all. For example, our business, financial condition, and results
of operations have been adversely affected by the outbreak of COVID-19 and actions taken by the government to contain the spread of the
pandemic, especially in 2022. Also, our business operations have been materially and negatively impacted due to the frozen bank accounts
by Nan County Public Safety Bureau. Most of the businesses in China have reopened and resumed since February 2023. However, travel restrictions,
quarantine requirements and/or temporary closure of office buildings and facilities may be imposed by local governments for any resurgence
of COVID-19.
The governmental authorities may issue new orders
of office closures and/or travel and transportation restrictions in China due to the resurgence of the COVID-19 and outbreak of new variants,
therefore, the results of operations for the year of 2022 are still uncertain and may be adversely impacted by any further outbreak or
resurgence of the COVID-19 pandemic.
Nan County Public Safety Bureau has frozen
certain bank accounts of the subsidiaries of Jiangsu Yanggu due to the investigation of major shareholders of the Company and its related
party Nanjing Jinwang which has and could continue to materially and negatively impact the business operations and financial results of
the Company.
On July 1, 2022, Mr. Huajun Gao and Mr. Aiming
Kong, each an 11.5% shareholder of the Company, were detained by Nan County Public Safety Bureau of Yiyang City, Hunan Province, China.
On July 26, 2022, Nan County People's Procuratorate approved the arrest of Mr. Gao and Mr. Kong with charge of illegal business
operation of Nanjing Jinwang Art Purchase E-commerce Co., Ltd., a company controlled by Mr. Gao and Mr. Kong ("Nanjing Jinwang").
On July 1, 2022, the bank accounts of Nanjing Jinwang were frozen by Nan County Public Safety Bureau, including a trust account into which
the customers of the Company deposit their security deposits in order to trade on the Company's two online trading platforms which
the Company has entrusted Nanjing Jinwang for escrow.
9
Also, on July 1, 2022, Nan County Public Safety
Bureau froze certain bank accounts of Kashi Longrui Business Management Services Co., Ltd. ("Kashi Longrui"), Kashi Dongfang
Cangpin Culture Development Co., Ltd. ("Kashi Dongfang") and Nanjing Yanyu Information Technology Co., Ltd. ("Nanjing
Yanyu"), all subsidiaries of Jiangsu Yanggu Culture Development Co., Ltd., the variable interest entity of the Company in China
(the "VIE") because they, each had business relationship with Nanjing Jinwang.
Neither the Company nor its VIE or subsidiaries
of its VIE has received any notification for enforcement charges from Nan County Public Safety Bureau, other than cash and short term
investment in the frozen bank accounts with balances totaling approximately $16.5 million and due from Nangjng Jinwang of approximately
$3.4 million relating to the Nanjing Jinwang investigation as described above as of December 31, 2022. Mr. Gao and Mr. Kong are not officers,
directors or employees of the Company, its VIE or subsidiaries of the VIE. At the time of such accounts being frozen, the Company's
fund deposited with Nanjing Jinwang amounted to $4 million Currently the customers can freely transfer their deposits out of the trust
account and can make their withdrawals based on their actual needs.
Due to the investigation of Nanjing Jinwang and frozen bank accounts,
the business operations of the Company have been materially and negatively impacted as its customers experienced difficulties withdrawing
their security deposits through online banking and had concerns regarding their deposited funds. The frozen accounts of the subsidiaries
of the VIE have also negatively impacted cash flow for these companies although they have other bank accounts that operate normally for
their daily business operations. The Company has taken remedial measures to assist its customers in withdrawing security deposits, such
as through manual and in person application with the bank to transfer funds, so that they will have confidence in the Company and continue
to list and trade art and collectible products on the online platforms of the Company. Currently the customers can freely transfer their
deposits out of the trust account. The Company has also taken measures to reduce the cost and expenses for the subsidiaries of the
VIE to respond to cash flow issues. However, there can be no assurance that these measures will restore customer confidence in using the
Company's services efficiently or at all and the Company cannot reasonably estimate when the bank accounts for the subsidiaries
of the VIE will be unfrozen by the Nan County Public Safety Bureau.
The investigation of Mr. Gao, Mr. Kong and Nanjing
Jinwang is ongoing. The Company has and will continue to communicate with Nan County Public Safety Bureau and other government
authorities to obtain more information regarding the investigation and to attempt to unfreeze the bank accounts for the subsidiaries of
the VIE. Although neither the Company, nor its VIE or subsidiaries of its VIE has received any notification from Nan County Public Safety
Bureau indicating it is a part of the current investigation, we cannot assure you that they won't be subject to the investigation
in the future, if that happens, we might face penalties, negative publicity and loss of business which could which will materially and
adversely affect our business operations and financial results.
In addition, if Mr. Gao and Mr. Kong are convicted
for any crimes that are disruptive to the order of the socialist market economy and are considered as controlling persons for the domestic
operating companies in China under the New Overseas Listing Rules, it could significantly limit or completely hinder our ability to offer
or continue to offer our securities to investors and cause the value of our securities to significantly decline or become worthless.
The global economy and the financial markets
may negatively affect our business and clients, as well as the supply of and demand for works of art and collectables.
Our business is affected by global, national and
local economic conditions since the services we provide are discretionary and we depend, to a significant extent, upon a number of factors
relating to discretionary consumer spending in China and Hong Kong. These factors include economic conditions and perceptions of such
conditions by traders of collectibles and artwork, employment rates, the level of their disposable income, business conditions, interest
rates, availability of credit and levels of taxation in regional and local markets. There can be no assurance that our services will not
be adversely affected by changes in general economic conditions in China, Hong Kong and globally.
10
In March 2020, the World Health Organization declared
the COVID-19 as a pandemic and the global economy has also been materially negatively affected. This crisis is like no other, the impact
is large and there is continued uncertainty about the duration and intensity of its impact. It is extremely uncertain about China's
and global growth forecast, which could seriously affect people's investment desires in China and internationally, including investment
in artwork products and collectibles, which could negatively impact our business and results of operations.
The artwork and collectible markets may be influenced
over time by the overall strength and stability of the global economy and the financial markets such as war in Ukraine and outbreak of
COVID-19, although this correlation may not be immediately evident. In addition, political conditions and world or health events such
as resurgence of COVID-19 may affect our business through their effect on the economy, as well as on the willingness of potential buyers
and sellers to invest and sell art and collectibles in the wake of economic uncertainty.
If we become subject to additional scrutiny,
criticism and negative publicity involving U.S.-listed China-based companies, we may have to expend significant resources to investigate
and resolve the matter which could harm our business operations, and our reputation and could result in a loss of your investment in our
ordinary shares, especially if such matter cannot be addressed and resolved favorably.
Recently, U.S. public companies that have substantially
all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators
and regulatory agencies. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities,
a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto
and, in some cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of
many U.S.-listed China-based companies has decreased in value and, in some cases, has become virtually worthless. Many of these companies
have been subject to shareholder lawsuits and SEC enforcement actions and have conducted internal and external investigations into the
allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us and our business.
If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend
significant resources to investigate such allegations and/or defend our Company. This situation may be a major distraction to our management.
If such allegations are not proven to be groundless, our business operations will be severely hindered and your investment in our ordinary
shares could be rendered worthless.
The demands for art and collectibles are
unpredictable, which may cause significant variability in our results of operations.
The demand for art is influenced not only by overall
economic conditions, but also by changing trends in the art market as to which collecting categories and artists are most sought after
and by the preferences of individual collectors. These conditions and trends are difficult to predict and may adversely impact our ability
to choose the categories for listing or advertising, potentially causing significant variability in our results of operations from period
to period.
A decline in trading volumes will decrease
our trading revenues.
Trading volumes are directly affected by economic,
political and market conditions, broad trends in business and finance, unforeseen market closures or other disruptions in trading such
as office and warehouse closure and transportation restrictions imposed by the government due to the COVID-19, which could cause the lack
of artwork products and collectibles being listed on our platform for trading, the level and volatility of interest rates, inflation,
changes in price of collectibles and artwork and the overall level of investor confidence. In recent years, trading volumes across our
markets have fluctuated depending on market conditions and other factors beyond our control. Because a significant percentage of our revenues
are tied directly to the trading volumes on our markets, it is likely that a general decline in trading volumes would lower revenues and
may adversely affect our operating results. Declines in trading volumes may also impact our market share or pricing structures and adversely
affect our business and financial condition.
11
Due to the nature of our business, valuable
works of art are stored at our contracted facilities. Such works of art could be subject to damage or theft, which could have a material
adverse effect on our operations, reputation and brand.
Valuable works of art are stored at our facilities.
Although we maintain security measures at our premises, valuable collectibles and artwork may be subject to damage or theft. The damage
or theft of valuable property despite these security measures could have a material adverse impact on our business and reputation.
System and network limitations or failures
could harm our business.
Our businesses depend on the integrity and performance
of the technology, computer and communications systems supporting them. If our systems cannot expand to cope with increased demand or
otherwise fail to perform, we could experience unanticipated disruptions in service, slower response times and delays in the introduction
of new services. These consequences could result in financial losses and decreased customer service and satisfaction. If trading volumes
increase unexpectedly or other unanticipated events occur, we may need to expand and upgrade our technology, transaction processing systems
and network infrastructure. We do not know whether we will be able to accurately project the rate, timing or cost of any increases, or
expand and upgrade our systems and infrastructure to accommodate any increases in a timely manner.
The success of our business depends on our
ability to market and advertise the services we provide effectively.
Our ability to establish effective marketing campaigns
is the key to our success. Our advertisements promote our corporate image and our services. If we are unable to increase awareness of
our brand, the benefits of using our trading platform to invest in collectibles and artwork, and that such use of our platform is secure,
we may not be able to attract new traders. Our marketing activities were disrupted due to travel restrictions and public gathering bans
for large conferences and marketing events imposed by the government due to COVID-19 during the outbreak of COVID-19 and they might face
similar disruptions if there is a resurgence of COVID-19. Our marketing activities may not be successful in promoting our services or
in retaining and increasing our trader base. We cannot assure you that our marketing programs will be adequate to support our future growth,
which may result in a material adverse effect on our results of operations.
If we do not compete effectively, our results of operations could
be harmed.
The art e-commerce industry is highly fragmented
and competitive with relatively low entry barriers. We compete primarily on the basis of our technology, comprehensive customer service
and brand recognition. Our competitors may compete with us in the following ways:
●
provide services that are similar to ours, or that are more attractive to customers than ours;
●
provide products and services we do not offer;
●
offer aggressive rebates to gain market share and to promote their businesses;
●
adapt at a faster rate to market conditions, new technologies and customer demands;
●
offer better, faster and more reliable technology; and
●
market, promote and provide their services more effectively.
Although we do not compete against other trading
service providers solely based on prices, if our competitors offer their services at lower prices, we may be forced to provide aggressive
discounts or rebates to our customers and our commission and fees may decrease. Reduction in commissions and fees without a commensurate
reduction in expenses would lower our profitability.
12
In addition, there are over 10 art e-commerce
platforms operating in Hong Kong, through which individual customers can open accounts and trade all kinds of artworks on those exchanges.
Certain Internet companies also launched art e-commerce trading services.
Some of these competitors may have greater financial
resources or a larger customer base than we do, and if we fail to compete effectively, our market position, business prospects and results
of operations would be adversely affected.
The art e-commerce market is highly competitive
and many traditional art galleries and auction houses may provide a platform for artwork owners to sell their collections. However, their
trading model is substantially different from ours. As of December 31, 2022, there were over 10 active art e-commerce platforms operating
nationwide in China. The trading service providers compete with each other for customers and trading volume based on factors including
brand, technology, research and customer services.
Although some of our competitors may have greater
financial resources or larger customer bases than we do, we believe that our proprietary technology platform, our comprehensive customer
services and strong brand recognition in the industry, will enable us to compete effectively in the fast evolving art e-commerce trading
industry in Hong Kong and PRC.
Our competitors operate with different business
models, have different cost structures or participate selectively in different market segments. They may ultimately prove more successful
or more adaptable to new regulatory, technological and other developments. Many of our current and potential competitors have significantly
more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion,
sale and support of their service offerings. Our competitors may also have longer operating histories, a more extensive client base, greater
brand recognition and brand loyalty and broader partner relationships than us. Additionally, a current or potential competitor may acquire
one or more of our existing competitors or form a strategic alliance with one or more of our competitors. Our competitors may be better
at developing new products, offering more attractive terms or lower fees, responding faster to new technologies and undertaking more extensive
and effective marketing campaigns. In response to competition and in order to grow or maintain the volume of our business, we may have
to charge lower fees, which could materially and adversely affect our business and results of operations. If we are unable to compete
with such companies and meet the need for innovation in our industry, the demand for our services and products could stagnate or substantially
decline, we could experience reduced revenues or our marketplace could fail to achieve or maintain more widespread market acceptance,
any of which could harm our business and results of operations.
Our annual and interim results may fluctuate
significantly and may not fully reflect the underlying performance of our business.
Our annual and interim results of operations,
including the levels of our net revenues, expenses, net income (loss) and other key metrics, may vary significantly in the future due
to a variety of factors, some of which are outside of our control, and period-to-period comparisons of our operating results may not be
meaningful, especially given our limited operating history. Accordingly, the results for any one period are not necessarily an indication
of future performance. Fluctuations in annual or interim results may adversely affect the market price of our ordinary shares. Factors
that may cause fluctuations in our financial results include:
●
our ability to attract new clients and retain existing clients;
●
changes in our mix of services and introduction of new services;
●
the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;
●
our decision to manage client volume growth during the period;
●
the impact of competitors or competitive products and services;
13
●
increases in our costs and expenses that we may incur to grow and expand our operations and to remain competitive;
●
network outages or security breaches;
●
changes in the legal or regulatory environment or proceedings, including with respect to security, privacy, or enforcement by government regulators, including fines, orders or consent decrees;
●
general economic, industry and market conditions, including changes in Chinese or global business or macroeconomic conditions; and
●
the timing of expenses related to the development or acquisition of technologies or businesses.
●
health epidemics or pandemics, such as the coronavirus outbreak (COVID-19) and government's action to contain the spread of the pandemic.
Despite our marketing efforts, we may not
be able to promote and maintain our brand in an effective and cost-efficient way and our business and results of operations may be harmed
accordingly.
We believe that effectively developing and maintaining
awareness of our brand is critical to attracting new and retaining existing clients. Successful promotion of our brand and our ability
to attract quality clients depends largely on the effectiveness of our marketing efforts and the success of the channels we use to promote
our services.  Our efforts to build our brand have caused us to incur marketing and advertising expenses in the amount of approximately
$0.5 million in 2022 and $1.1 million in 2021, respectively. It is likely that our future marketing efforts will require us to incur significant
additional expenses as we expand our business. These efforts may not result in increased revenues in the immediate future or at all and,
even if they do, any increases in revenues may not offset the expenses incurred. If we fail to successfully promote and maintain our brand
while incurring substantial expenses, our results of operations and financial condition would be adversely affected, which may impair
our ability to grow our business.
Fraudulent activity in our marketplace could
negatively impact our operating results, brand and reputation and cause the use of our services to decrease.
We are subject to the risk of fraudulent activity
both in our marketplace and associated with traders and third parties handling their information. Our resources, technologies and fraud
detection tools may be insufficient to accurately detect and prevent fraud. Increases in fraudulent activity, either in our marketplace
or associated with participants of our marketplace, could negatively impact our brand and reputation, reduce the volume of transactions
facilitated through our platform and lead us to take additional steps to reduce fraud risk, which could increase our costs. High profile
fraudulent activity could even lead to regulatory intervention, and may divert our management's attention and cause us to incur
additional expenses and costs. Although we have not experienced any material business or reputational harm as a result of fraudulent activities
in the past, we cannot rule out the possibility that any of the foregoing may occur, causing harm to our business or reputation in the
future. If any of the foregoing were to occur, our results of operations and financial condition could be materially and adversely affected.
We may not be able to prevent others from
unauthorized use of our intellectual property, which could harm our business and competitive position.
We regard our trademarks, domain names, know-how,
proprietary technologies and similar intellectual property as critical to our success, and we rely on a combination of intellectual property
laws and contractual arrangements, including confidentiality and non-compete agreements with our employees and others, to protect our
proprietary rights. We cannot assure you that any of our intellectual property rights will not be challenged, invalidated, circumvented
or misappropriated, or such intellectual property will be sufficient to provide us with competitive advantages. In addition, because of
the rapid pace of technological change, parts of our business rely on technologies developed or licensed by third parties, and we may
not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms, or at all.
14
It is often difficult to register, maintain and
enforce intellectual property rights in China. Statutory laws and regulations are subject to judicial interpretation and enforcement and
may not be applied consistently due to the lack of clear guidance on statutory interpretation. Confidentiality, invention assignment and
non-compete agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach.
Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in China.
Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we take may be inadequate to prevent
the misappropriation of our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights,
such litigation could result in substantial costs and a diversion of our managerial and financial resources. We can provide no assurance
that we will prevail in such litigation. In addition, our trade secrets may be leaked or otherwise become available to, or be independently
discovered by, our competitors. To the extent that our employees or consultants use intellectual property owned by others in their work
for us, disputes may arise as to the rights in related know-how and inventions. Any failure in protecting or enforcing our intellectual
property rights could have a material adverse effect on our business, financial condition and results of operations.
Our annual effective income tax rate can
change significantly as a result of a combination of changes in our foreign earnings and other factors, including changes in tax laws
or changes made by regulatory authorities.
Our consolidated effective income tax rate is
equal to our total income tax expense (benefit) as a percentage of total book income (loss) before tax. Losses in one jurisdiction may
not be used to offset profits in other jurisdictions and may cause an increase in our tax rate. Changes in statutory income tax rates
and laws, as well as initiation of tax audits by local and foreign authorities, could impact the amount of income tax liability and income
taxes we are required to pay. In addition, any fluctuation in the earnings (or losses) of the jurisdictions and assumptions used in the
calculation of income taxes could have a significant effect on our consolidated effective income tax rate. Furthermore, our effective
tax rate could increase if we are unable to generate sufficient future taxable income in certain jurisdictions, or if we are otherwise
required to increase our valuation allowances against our deferred tax assets.
We are subject to taxation in multiple jurisdictions.
As a result, any adverse development in the tax laws of any of these jurisdictions or any disagreement with our tax positions could have
a material adverse effect on our business, consolidated financial condition or results of operations.
We are subject to taxation in, and to the tax
laws and regulations of, multiple jurisdictions, particularly in the People's Republic of China and Hong Kong. In addition, tax
authorities in any applicable jurisdiction, may disagree with the positions we have taken or intend to take regarding the tax treatment
or characterization of any of our transactions. In the event any applicable tax authorities effectively sustained their positions which
are different from our tax treatment of any of our transactions, it could have a significant adverse impact on our business, consolidated
results of our operations as well as consolidated financial condition.
We may be subject to intellectual property
infringement claims, which may be expensive to defend and may disrupt our business and operations.
We cannot be certain that our operations or any
aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how or other intellectual
property rights held by third parties. We may be from time to time in the future subject to legal proceedings and claims relating to the
intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights, know-how or other
intellectual property rights that are infringed by our products, services or other aspects of our business without our awareness. Holders
of such intellectual property rights may seek to enforce such intellectual property rights against us in China, the United States or other
jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management's time and other
resources from our business and operations to defend against these claims, regardless of their merits.
Additionally, the application and interpretation
of China's intellectual property laws and the procedures and standards for granting trademarks, patents, copyrights, know-how or
other intellectual property rights in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory
authorities would agree with our analysis. If we were found to have violated the intellectual property rights of others, we may be subject
to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees
or be forced to develop alternatives of our own. As a result, our business and results of operations may be materially and adversely affected.
15
From time to time we may evaluate and potentially
consummate strategic investments or acquisitions, which could require significant management attention, disrupt our business and adversely
affect our financial results.
We may evaluate and consider strategic investments,
combinations, acquisitions or alliances to further increase the value of our marketplace and better serve our clients. These transactions
could be material to our financial condition and results of operations if consummated. If we are able to identify an appropriate business
opportunity, we may not be able to successfully consummate the transaction and, even if we do consummate such a transaction, we may be
unable to obtain the benefits or avoid the difficulties and risks of such transaction.
Strategic investments or acquisitions will involve
risks commonly encountered in business relationships, including:
●
difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business;
●
inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits;
●
difficulties in retaining, training, motivating and integrating key personnel;
●
diversion of management's time and resources from our normal daily operations;
●
difficulties in successfully incorporating licensed or acquired technology and rights into our service offerings to customers;
●
difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations;
●
difficulties in retaining relationships with clients, employees and suppliers of the acquired business;
●
risks of entering markets in which we have limited or no prior experience;
●
regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business;
●
assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;
●
failure to successfully further develop the acquired technology;
●
liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;
●
potential disruptions to our ongoing businesses; and
●
unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions.
We may not make any investments or acquisitions,
or any future investments or acquisitions may not be successful, may not benefit our business strategy, may not generate sufficient revenues
to offset the associated acquisition costs or may not otherwise result in the intended benefits. In addition, we cannot assure you that
any future investment in or acquisition of new businesses or technology will lead to the successful development of new or enhanced products
and services or that any new or enhanced products and services, if developed, will achieve market acceptance or prove to be profitable.
16
Our business depends on the continued efforts
of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business
may be severely disrupted.
Our business operations depend on the continued
services of our senior management, particularly the executive officers named in this report. While we have the ability to provide different
incentives to our management, we cannot assure you that we can continue to retain their services. If one or more of our key executives
were unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, our future growth
may be constrained, our business may be severely disrupted and our financial condition and results of operations may be materially and
adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. In addition, although we have
entered into confidentiality and non-competition agreements with our management, there is no assurance that any member of our management
team will not join our competitors or form a competing business. If any dispute arises between our current or former officers and us,
we may have to incur substantial costs and expenses in order to enforce such agreements in China or Hong Kong, or we may be unable to
enforce them at all.
We have engaged in transactions with related parties, and
such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.
We have entered into a number of transactions
with related parties, including our shareholders, directors and executive officers. For example, we have entered into several
transactions with Nanjing Culture and Artwork Property Exchange Co., Ltd., Jinling Cultural Property Rights Exchange Co., Ltd. and Nanjing
Jinwang Art Purchase E-commerce Co., Ltd., which are controlled or owned by Mr. Huajun Gao and/or Mr. Aimin Kong, each is a 11.5% beneficial
shareholder of the Company. We also entered into advertising contract with Kashi Jinwang Art Purchase E-commerce Co., Ltd., as online
advertising service provider to promoting our collectibles and artworks. For the year ended December 31, 2022, our related parties accounts
payable, other payables, net revenues, cost of revenues, selling and marketing, and general and administrative expenses accounted for
0.0%, 1.1%, 0.9%, 30.5%, 0.6% and 3.7% of our total accounts payable, other payables, net revenues, cost of revenues, selling and marketing,
and general and administrative expenses, respectively. For the year ended December 31, 2021, our related parties accounts payable, other
payables, net revenues, cost of revenues, selling and marketing, and general and administrative expenses accounted for 0.0%, 0.0%, 0.6%,
30.1%, 2.3% and 2.7% of our total accounts payable, other payables, net revenues, cost of revenues, selling and marketing, and general
and administrative expenses, respectively. See "
Item 7.B. Related Party Transactions
."  We may in the future enter
into additional transactions with entities in which members of our board of directors and other related parties hold ownership interests.
Transactions with the entities in which related
parties hold ownership interests present potential for conflicts of interest, as the interests of these entities and their shareholders
may not align with the interests of the Company and our shareholders with respect to the negotiation of, and certain other matters related
to, our lease and technology services to such entities. Conflicts of interest may also arise in connection with the exercise of contractual
remedies under these transactions, such as the treatment of events of default.
Currently, our board of directors has authorized
the audit committee to review and approve all related party transaction. We rely on the laws of Cayman Islands, which provide that directors
owe a duty of care and a duty of loyalty to our Company. Nevertheless, we may have achieved more favorable terms if such transactions
had not been entered into with related parties and these transactions, individually or in the aggregate, may have an adverse effect on
our business and results of operations or may result in government enforcement actions or other litigation.
The relative lack of public company experience
of our management team may put us at a competitive disadvantage.
Our management team lacks public company experience,
which could impair our ability to comply with legal and regulatory requirements such as those imposed by the Sarbanes-Oxley Act of 2002,
("Sarbanes-Oxley"). Our senior management does not have much experience managing a publicly-traded company. Such responsibilities
include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may be unable
to implement programs and policies in an effective and timely manner or that adequately respond to the increased legal, regulatory and
reporting requirements associated with being a publicly traded company. Our failure to comply with all applicable requirements could lead
to the imposition of fines and penalties, distract our management from attending to the management and growth of our business, result
in a loss of investor confidence in our financial reports and have an adverse effect on our business and stock price.
17
If we fail to establish and maintain proper
internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could
be impaired.
Pursuant to Section 404 of the Sarbanes-Oxley
Act, we are required to file a report by our management on our internal control over financial reporting. However, while we remain an
emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued
by our independent registered public accounting firm. The presence of material weaknesses in internal control over financial reporting
could result in financial statement errors which, in turn, could lead to errors in our financial reports and/or delays in our financial
reporting, which could require us to restate our operating results. We might not identify one or more material weaknesses in our internal
controls in connection with evaluating our compliance with Section 404 of the Sarbanes-Oxley Act. In order to maintain and improve the
effectiveness of our disclosure controls and procedures and internal controls over financial reporting, we need to expend significant
resources and provide significant management oversight. Implementing any appropriate changes to our internal controls may require specific
compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take
a significant period of time to complete and divert management's attention from other business concerns. These changes may not,
however, be effective in achieving and maintaining the adequacy of our internal control.
If we are unable to conclude that we have effective
internal controls over financial reporting, investors may lose confidence in our operating results, the price of the ordinary shares could
decline and we may be subject to litigation or regulatory enforcement actions. In addition, if we are unable to meet the requirements
of Section 404 of the Sarbanes-Oxley Act, we may be subject to investigation or sanctions by the SEC and our ordinary shares may not be
able to remain listed on the Nasdaq Capital Market.
Competition for employees is intense, and
we may not be able to attract and retain the qualified and skilled employees needed to support our business.
We believe our success depends on the efforts
and talent of our employees, including risk management, information technology, financial and marketing personnel. Our future success
depends on our continued ability to attract, develop, motivate and retain qualified and skilled employees. Competition for highly skilled
marketing, real estate, technical, risk management and financial personnel is extremely intense. We may not be able to hire and retain
these personnel at compensation levels consistent with our existing compensation and salary structure. Some of the companies with which
we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment.
In addition, we invest significant time and expense
in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees,
we could incur significant expenses in hiring and training their replacements, and the quality of our products and services could diminish,
resulting in a material adverse effect to our business.
Increases in labor costs in the PRC may
adversely affect our business and results of operations.
The economy in China has experienced increases
in inflation and labor costs in recent years. As a result, average wages in the PRC are expected to continue to increase. In addition,
we are required by PRC laws and regulations to pay various statutory employee benefits, including pension, housing funds, medical insurance,
work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our
employees. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee benefits,
and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. We expect that
our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to control our labor costs or pass
on these increased labor costs to our users by increasing the fees of our services, our financial condition and results of operations
may be adversely affected.
18
If we cannot maintain our corporate culture
as we grow, we could lose the innovation, collaboration and focus that contribute to our business.
We believe that a critical component of our success
is our corporate culture, which we believe fosters innovation, encourages teamwork and cultivates creativity. As we develop the infrastructure
of a public company and continue to grow, we may find it difficult to maintain these valuable aspects of our corporate culture. Any failure
to preserve our culture could negatively impact our future success, including our ability to attract and retain employees, encourage innovation
and teamwork and effectively focus on and pursue our corporate objectives.
We do not have any business insurance coverage.
Insurance companies in China currently do not
offer as extensive an array of insurance products as insurance companies in more developed economies. Currently, we do not have any business
liability or disruption insurance to cover our operations. We have determined that the costs of insuring for these risks and the difficulties
associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Any uninsured
business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect
on our results of operations and financial condition.
We face risks related to health epidemics
and other outbreaks, including the coronavirus (COVID-19), which has caused and may continue to cause business disruptions, resulting
in a material, adverse impact to our financial condition and results of operations.
In recent years, there have been outbreaks of
epidemics in various countries, including China. Recently, there was an outbreak of a novel strain of coronavirus (COVID-19) in China,
which has spread rapidly to many parts of the world, including Hong Kong and the U.S. In March 2020, the World Health Organization declared
the COVID-19 a pandemic. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of office buildings
and facilities in China and in the U.S.
Our results of operations have been materially adversely affected by
the outbreak of COVID-19. During the outbreak of COVID-19 and government's efforts to contain the spread of the pandemic, our ability
to accept, appraise, list new products and provide warehousing services for collectibles and artwork products as well as our marketing
activities have been severely disrupted and hindered due to the office closure, travel and transportation restrictions imposed by the
government during the first half of 2020, which have caused a material negative impact on our business and results of operations in 2020.
Most of the businesses in China have reopened and resumed since the second half of 2020. However,
travel
restrictions, quarantine requirements and/or temporary closure of office buildings and facilities were imposed by local governments due
to the outbreak of Omicron variant in Hong Kong and many cities in China, including Shenzhen, Xi'an, Shanghai, Guangzhou, Nanjing,
Nanchang and Taiyuan in 2022.
In early December 2022, Chinese government eased the strict control measure for COVID-19, which has
led to surge in increased infections and disruption in our business operations in December 2022 and January 2023. The government authorities
may issue new orders of office closure, travel and transportation restrictions due to the resurgence of COVID-19 and new variants. Any
potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the
duration and severity of COVID-19 and the actions taken by governmental authorities and other entities to contain COVID-19 or treat its
impact, almost all of which are beyond our control. Potential impacts include, but are not limited to, the following:
●
temporary closure of offices and warehouse, travel restrictions, cancellation of marketing and promotion activities and in person meetings or suspension of transportation of collectibles and artworks between our customers and our warehouse, which may materially adversely affect our financial condition and operating results;
●
our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to market or invest in collectibles and artwork, which may materially adversely impact our revenue;
●
our customers may require additional time to pay us or fail to pay us at all, which could significantly increase our accounts receivable and require us to record additional allowances for doubtful accounts. We have provided and may continue to provide significant incentives to existing and potential customers, which may in turn materially adversely affect our financial condition and operating results;
●
the operations of our business partners, such as appraisal firms and express delivery companies have been and could continue to be negatively impacted by the further outbreak or resurgence of COVID-19, which may negatively impact our services to our customers, or result in loss of customers or disruption of our business, which may in turn materially adversely affect our financial condition and operating results;
●
many of our customers and business partners are individuals and small and medium-sized enterprises (SMEs), which may not have strong cash flows or be well capitalized, and may be vulnerable to a pandemic outbreak and slowing macroeconomic conditions. If the SMEs that we work with cannot weather the COVID-19 and the resulting economic impact, or cannot resume business as usual after a prolonged outbreak or resurgence of COVID-19, our revenues and business operations may be materially and adversely impacted;
●
the global stock markets have experienced, and may continue to experience, significant decline or volatility from the COVID-19 outbreak, which could materially adversely affect our stock price; and
19
The situation remains highly uncertain for any
further outbreak or resurgence of the COVID-19 and new variants. It is therefore difficult for the Company to estimate the impact on our
business or operating results that might be adversely affected by any further outbreak or resurgence of COVID-19 and new variants. Potential
impact to our results of operations will also depend on future developments and new information that may emerge regarding COVID-19 and
the actions taken by governmental authorities and other entities to contain COVID-19 and/or mitigate its impact, almost all of which are
beyond our control.
In general, our business could be materially adversely
affected by the effects of epidemics or pandemic, including, but not limited to, the COVID-19, avian influenza, severe acute respiratory
syndrome (SARS), the influenza A virus, Ebola virus, or other outbreaks. In response to an epidemic or other outbreaks, government and
other organizations may adopt regulations and policies that could lead to severe disruption to our daily operations, including temporary
closure of our offices and other facilities. These severe conditions may cause us and/or our partners to make internal adjustments, including
but not limited to, temporarily closing down businesses, limiting business hours, and setting restrictions on travel and/or visits with
clients and partners for a prolonged period of time. Various impacts arising from a severe condition may cause business disruptions, resulting
in a material, adverse impact to our financial condition and results of operations.
Risks Related to Our Corporate Structure
If the PRC government deems that the contractual
arrangements in relation to the consolidated variable interest entity do not comply with PRC regulatory restrictions on foreign investment
in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject
to severe penalties or be forced to relinquish our interests in those operations.
We are a Cayman Islands exempted company and our
PRC subsidiary is considered a foreign invested enterprise. To comply with PRC laws and regulations, we conduct our operations in China
through a series of contractual arrangements entered into among the WFOE, the VIE and its wholly owned subsidiaries and the shareholders
of the VIE. As a result of these contractual arrangements, we exert control over the VIE and consolidate its operating results in our
financial statements under U.S. GAAP. For a detailed description of these contractual arrangements, see "Corporate History and Structure."
In the opinion of our PRC counsel, Taikun Law
Firm, our current ownership structure, the ownership structure of our PRC subsidiary and consolidated VIE and its wholly owned subsidiaries,
and the contractual arrangements among the WFOE, the VIE and the shareholders of the VIE are not in violation of existing PRC laws, rules
and regulations; and these contractual arrangements are valid, binding and enforceable in accordance with their terms and applicable PRC
laws and regulations currently in effect. However, Taikun Law Firm has also advised us that there are substantial uncertainties regarding
the interpretation and application of current or future PRC laws and regulations and there can be no assurance that the PRC government
will ultimately take a view that is consistent with the opinion of our PRC counsel.
If the PRC government finds that our contractual
arrangements do not comply with future Chinese laws and regulations, the relevant PRC regulatory authorities, including the CSRC, would
have broad discretion in dealing with such violations or failures, including, without limitation:
●
discontinuing or placing restrictions or onerous conditions on our operations;
●
imposing fines, confiscating the income from the WFOE or the VIE and its subsidiaries, or imposing other requirements with which we or the VIE and its subsidiaries may not be able to comply;
●
requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over the VIE and its subsidiaries;
●
restricting or prohibiting our use of the proceeds of financings to fund our business and operations in China; or
●
taking other regulatory or enforcement actions that could be harmful to our business.
20
The imposition of any of these penalties would
result in a material and adverse effect on our ability to conduct our business. In addition, it is unclear what impact the PRC government
actions would have on us and on our ability to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial
statements, if the PRC government authorities were to find the VIE structure and contractual arrangements to be in violation of PRC laws
and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities of the VIE
and its subsidiaries or our right to receive substantially all of the economic benefits and residual returns from the VIE and its subsidiaries
and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate
the financial results of the VIE and its subsidiaries in our consolidated financial statements. Either of these results, or any other
significant penalties that might be imposed on us in this event, would have a material adverse effect on our financial condition and results
of operations.
We rely on contractual arrangements with
the VIE and the shareholders of the VIE for our business operations, which may not be as effective as direct ownership in providing operational
control.
We have relied and expect to continue to rely
on contractual arrangements with Jiangsu Yanggu Culture Development Co., Ltd. ("Jiangsu Yanggu") and Jiangsu Yanggu's
current management to operate our business. For a description of these contractual arrangements, see "Corporate History and Structure."
These contractual arrangements may not be as effective as direct ownership in providing us with control over the consolidated VIE and
its subsidiaries. For example, the consolidated variable interest entity and their shareholders could breach their contractual arrangements
with us by, among other things, failing to conduct their operations, including providing technical and warehouse services, or taking other
actions that are detrimental to our interests.
If we had direct ownership of the VIE and its
subsidiaries, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE and its
subsidiaries, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational
levels. However, under the current contractual arrangements, we rely on the performance by the consolidated variable interest entity and
its shareholders of their obligations under the contracts to exercise control over the consolidated VIE and its subsidiaries. The shareholders
of the consolidated variable interest entity may not act in the best interests of our Company or may not perform their obligations under
these contracts. Such risks exist throughout the period in which we intend to operate our business through the contractual arrangements
with the consolidated VIE and its subsidiaries. Although we have the right to replace any shareholder of the consolidated variable interest
entity under the contractual arrangements, if any shareholder of the consolidated variable interest entity is uncooperative or any dispute
relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC
laws and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. See
"—Any failure by the consolidated variable interest entity or its shareholders to perform their obligations under our contractual
arrangements with them would have a material adverse effect on our business
." Therefore, our contractual arrangements with the
consolidated VIE and its subsidiaries may not be as effective in ensuring our control over the relevant portion of our business operations
as direct ownership would be.
Any failure by the consolidated VIE or its
shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.
If the consolidated VIE or its shareholders fail
to perform their respective obligations under the contractual arrangements or if any physical instruments, such as chops and seals of
the VIE, are used without our authorization to enter into contractual arrangements in China, we may have to incur substantial costs and
expend additional resources to seek legal remedies under PRC laws including specific performance or injunctive relief, and/or claiming
damages, which we cannot assure you will be effective under PRC laws. For example, if the shareholders of the VIE were to refuse to transfer
their equity interest in the VIE to us or our designee if we exercise the purchase option pursuant to these contractual arrangements,
or if they were otherwise to act in bad faith toward us, then we may have to take legal action to compel them to perform their contractual
obligations.
All of the agreements under our contractual arrangements
are governed by PRC laws and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be
interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures. The legal system in
the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system
could limit our ability to enforce these contractual arrangements. Meanwhile, there are very few precedents and little formal guidance
as to how contractual arrangements in the context of a consolidated variable interest entity should be interpreted or enforced under PRC
laws. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary.
In addition, under PRC laws, rulings by arbitrators are final and parties cannot appeal arbitration results in court unless such rulings
are revoked or determined unenforceable by a competent court. If the losing parties fail to carry out the arbitration awards within a
prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition
proceedings, which would require additional expenses and delay. In the event that we are unable to enforce these contractual arrangements,
or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to
exert effective control over the consolidated VIE and its subsidiaries, and our ability to conduct our business may be negatively affected.
See "—
Risks Related to Doing Business in China— Uncertainties and quick change in the interpretation and enforcement
of Chinese laws and regulations with little advance notice could result in a material and negative impact on our business operations,
decrease the value of our securities and limit the legal protections available to you and us
.
"
21
The shareholders of the consolidated VIE
may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.
Forty percent of the equity interests of Jiangsu
Yanggu are held by Aimin Kong and Huajun Gao. Their interests in Jiangsu Yanggu may differ from the interests of our Company as a
whole. These shareholders may breach, or cause the consolidated variable interest entity to breach, the existing contractual arrangements
we have with them and the consolidated variable interest entity, which would have a material adverse effect on our ability to effectively
control the consolidated VIE and its subsidiaries and receive economic benefits from them. For example, the shareholders may be able to
cause our agreements with Jiangsu Yanggu to be performed in a manner adverse to us by, among other things, failing to remit payments due
under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise, any or all of
these shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor.
Currently, we do not have any arrangements to
address potential conflicts of interest between these shareholders and our Company, except that we could exercise our purchase option
under the exclusive option agreements with these shareholders to request them to transfer all of their equity interests in Jiangsu Yanggu
to a PRC entity or individual designated by us, to the extent permitted by PRC laws. If we cannot resolve any conflict of interest or
dispute between us and the major shareholders of Jiangsu Yanggu, we would have to rely on legal proceedings, which could result in the
disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.
Contractual arrangements in relation to
the consolidated variable interest entity and its subsidiaries may be subject to scrutiny by the PRC tax authorities and they may determine
that we or our PRC consolidated VIE and its subsidiaries owe additional taxes, which could negatively affect our financial condition
and the value of your investment.
Under applicable PRC laws and regulations, arrangements
and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable
year when the transactions are conducted. The PRC enterprise income tax law requires every enterprise in China to submit its annual enterprise
income tax return together with a report on transactions with its related parties to the relevant tax authorities. The tax authorities
may impose reasonable adjustments on taxation if they have identified any related party transactions that are inconsistent with arm's
length principles. We may face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements
between the WFOE, our wholly-owned subsidiary in China, the consolidated VIE in China, and the shareholders of the VIE were not entered
into on an arm's length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules
and regulations, and adjust the VIE's income in the form of a transfer pricing adjustment. A transfer pricing adjustment could,
among other things, result in a reduction of expense deductions recorded by the VIE and its subsidiaries for PRC tax purposes, which could
in turn increase their tax liabilities without reducing the WFOE's tax expenses. In addition, if the WFOE requests that the shareholders
of the VIE transfer their equity interests in the VIE at nominal or no value pursuant to these contractual arrangements, such transfer
could be viewed as a gift and subject the VIE to PRC income tax. Furthermore, the PRC tax authorities may impose late payment fees and
other penalties on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be
materially and adversely affected if the consolidated VIE and its subsidiaries tax liabilities increase or if they are required to pay
late payment fees and other penalties.
We may lose the ability to use and enjoy
assets held by the consolidated VIE and its subsidiaries that are material to the operations of our business if one or more of the entities
goes bankrupt or becomes subject to a dissolution or liquidation proceeding.
The consolidated VIE and its subsidiaries hold
certain assets that are material to the operation of our business, including certain domain names, supporting system and equipment for
our online trading platform. Under the contractual arrangements, the consolidated VIE may not and its shareholders may not cause them
to, in any manner, sell, transfer, mortgage or dispose of their assets or their legal or beneficial interests in the business without
our prior consent. However, in the event the consolidated VIE's shareholders breach these contractual arrangements and voluntarily
liquidate the consolidated VIE and its subsidiaries or the consolidated VIE and its subsidiaries declare bankruptcy and all or part of
their assets become subject to liens or rights of third-party creditors, or are otherwise disposed of without our consent, we may be unable
to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and
results of operations. If the consolidated VIE and its subsidiaries undergo a voluntary or involuntary liquidation proceeding, independent
third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could
materially and adversely affect our business, financial condition and results of operations.
22
Risks Related to Doing Business in China
Changes in China's economic, political
or social conditions or government policies could have a material adverse effect on our business and results of operations.
A substantial part of our operations are located
in China. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree
by political, economic and social conditions in China generally and by continued economic growth in China as a whole.
The Chinese economy differs from the economies
of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control
of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of improved corporate
governance in business enterprises, a substantial portion of productive assets in China are still owned by the government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese
government also exercises significant control over China's economic growth through allocating resources, controlling payment of
foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.
While the Chinese economy has experienced significant
growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government
has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit
the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may
be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese
government has implemented certain measures, including interest rate increases, to control the pace of economic growth. These measures
may cause decreased economic activity in China, and since 2012, China's economic growth has slowed down. Any prolonged slowdown
in the Chinese economy may reduce the demand for our products and services and materially and adversely affect our business and results
of operations.
Uncertainties and quick change in the interpretation
and enforcement of Chinese laws and regulations with little advance notice could result in a material and negative impact on our business
operations, decrease the value of our securities and limit the legal protections available to you and us.
The PRC legal system is based on written statutes,
and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system
continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these
laws, regulations and rules involves uncertainties. The enforcement of laws and that rules and regulations in China can change quickly
with little advance notice and the risk that the Chinese government may intervene or influence our operations at any time, or may exert
more control over offerings conducted overseas and/or foreign investment in China- based issuers, could result in a material change in
our operations and/or the value of our securities.
On July 6, 2021, the General Office of the Communist
Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal activities
in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant
governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over
China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.
On February 17, 2023, the CSRC released the New Overseas Listing Rules with five interpretive guidelines, which took effect on March 31,
2023. The New Overseas Listing Rules require Chinese domestic enterprises to complete filings with relevant governmental authorities and
report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing
in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; c) a domestic
company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of
shares or other means. According to the Notice on Arrangements for Overseas Securities Offering and Listing by Domestic Enterprises, published
by the CSRC on February 17, 2023, a company that (i) has already completed overseas listing or (ii) has already obtained the approval
for the offering or listing from overseas securities regulators or exchanges but has not completed such offering or listing before effective
date of the new rules and completes such offering or listing before September 30, 2023 will be considered as an existing listed company
and is not required to make any filing until it conducts a new offering in the future. Furthermore, upon the occurrence of any of the
material events specified below after an issuer has completed its offering and listed its securities on an overseas stock exchange, the
issuer shall submit a report thereof to the CSRC within 3 working days after the occurrence and public disclosure of the event: (i) change
of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other competent authorities; (iii)
change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting.  Any actions by the Chinese government
to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could
significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our
securities to significantly decline or be worthless.
23
On February 15, 2022, Cybersecurity Review Measures
published by Cyberspace Administration of China, National Development and Reform Commission, Ministry of Industry and Information Technology,
Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People's Bank of China, State
Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and State Cryptography Administration
became effective, which provides that, Critical Information Infrastructure Operators ("CIIOs") that intend to purchase internet
products and services and Online Platform Operators engaging in data processing activities that affect or may affect national security
shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published the Administration
Measures for Cyber Data Security (Draft for Public Comments), or the "Cyber Data Security Measure (Draft)", which requires
cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with
the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and Archives Administration
of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic company that seeks
to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations, enhance legal awareness
of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system,
and take necessary measures to fulfill confidentiality and archives administration obligations. On July 7, 2022, CAC promulgated the Measures
for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply
for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important
data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1
million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has
already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas
since January 1st of the previous year; and (iv) other circumstances under which the data cross-border transfer security assessment
is required as prescribed by the CAC. As confirmed by our PRC counsel Jiangsu Taikun Law Firm, we are currently not subject to cybersecurity
review with the Cyberspace Administration of China ("CAC") under these new measures, because we operate our online platforms
through our subsidiaries in Hong Kong which are not subject to the laws and regulations of China, and the VIE and its subsidiaries in
China provide marketing, warehouse storage and technical maintenance services and they are not cyberspace operators with personal information
of more than 1 million users or activities that affect or may affect national security. Nevertheless, the aforementioned measures and
any related implementation rules to be enacted may subject us to additional compliance requirement in the future.
We cannot rule out the possibility that the
PRC government will institute a licensing regime or pre-approval requirement covering our business operations in China at some point in
the future. If such a licensing regime or approval requirement were introduced, we cannot assure you that we would be able to obtain any
newly required license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability
to continue our operations in China.
From time to time, we may have to resort to administrative
and court proceedings to enforce our legal rights. Since PRC administrative and court authorities have significant discretion in interpreting
and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings
and the level of legal protection we enjoy in the PRC legal system than in more developed legal systems. Furthermore, the PRC legal system
is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have
retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation.
Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property) and
procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect
our business and impede our ability to continue our operations.
The Chinese government exerts substantial
influence over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could
result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer our
securities to investors and, and cause the value of our securities to significantly decline or be worthless.
The Chinese government has exercised and continues
to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability
to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations,
land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations
or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance
with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support
recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic
policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest
ourselves of any interest we then hold in Chinese properties.
24
As such, our business in China is subject to various
government and regulatory interferences. We could be subject to regulation by various political and regulatory entities, including various
local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and
newly adopted laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or indirectly,
by existing or future laws and regulations relating to its business or industry, which could result in a material change in our operation
and the value of our securities.
Furthermore, according to the newly published
New Overseas Listing Rules, although we are currently not required to obtain permission from any of the PRC federal or local government
and has not received any denial to list on the U.S. exchange, we are required to file with CSRC for future offerings. It is uncertain
when and whether we will be required to obtain permission from the PRC government to list and trade on U.S. exchanges in the future, and
even when such permission is obtained, whether it will be denied or rescinded, which could significantly limit or completely hinder our
ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or be
worthless.
The Holding Foreign Companies Accountable
Act, or the HFCA Act, and the related regulations are evolving quickly. Further implementations and interpretations of or amendments to
the HFCA Act or the related regulations, or a PCOAB's determination of its lack of sufficient access to inspect our auditor, might
pose regulatory risks to and impose restrictions on us because of our operations in mainland China. A potential consequence is that our
ordinary shares may be delisted by the exchange. The delisting of our ordinary shares, or the threat of our ordinary shares being delisted,
may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct full inspections
of our auditor deprives our investors of the benefits of such inspections.
The Holding Foreign Companies Accountable Act,
or the HFCA Act, was enacted on December 18, 2020. In accordance with the HFCA Act, trading in securities of any registrant on a
national securities exchange or in the over-the-counter trading market in the United States may be prohibited if the PCAOB determines
that it cannot inspect or fully investigate the registrant's auditor for three consecutive years beginning in 2021, and, as a result,
an exchange may determine to delist the securities of such registrant. On June 22, 2021, the U.S. Senate passed the Accelerating Holding
Foreign Companies Accountable Act, which, would amend the HFCA Act and require the SEC to prohibit an issuer's securities from trading
on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing
the time period before our securities may be prohibited from trading or delisted if our auditor is unable to meet the PCAOB inspection
requirement. On December 29, 2022, a legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated
Appropriations Act"), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things,
an identical provision to Accelerating Holding Foreign Companies Accountable Act, which reduces the number of consecutive non-inspection
years required for triggering the prohibitions under the HFCA Act from three years to two.
On November 5, 2021, the SEC adopted the PCAOB
rule to implement HFCA Act, which provides a framework for the PCAOB to determine 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 2, 2021, SEC adopted amendments to
finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants the SEC identifies
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 that the PCAOB is unable to inspect or investigate (the "Commission-Identified Issuers"). A Commission-Identified Issuer
will be required to comply with the submission and disclosure requirements in the annual report for each year in which it was identified.
If a registrant is identified as a Commission-Identified Issuer based on its annual report for the fiscal year ended December 31, 2021,
the registrant will be required to comply with the submission or disclosure requirements in its annual report filing covering the fiscal
year ended December 31, 2022.
25
On December 16, 2021, the PCAOB issued its determinations
(the "Determination") that they are unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered
in mainland China and in Hong Kong. The Determination includes lists of public accounting firms headquartered in mainland China and Hong
Kong that the PCAOB is unable to inspect or investigate completely.
On August 26, 2022, the PCAOB signed a Statement
of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People's Republic of China governing
inspections and investigations of audit firms based in China and Hong Kong.  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. However, should PRC authorities obstruct or otherwise fail
to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination.
The enactment of the HFCA Act and related regulations
and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information
could cause investors uncertainty for affected issuers and the market price of our ordinary shares could be adversely affected, and we
could be delisted if our auditor is unable to meet the PCAOB inspection requirement.
The lack of access to PCAOB inspections prevents
the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China and Hong Kong. As a result, investors
may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China and
Hong Kong makes it more difficult to evaluate the effectiveness of these accounting firm's audit procedures and quality control
procedures as compared to auditors outside of China that are subject to the PCAOB inspections.
Our auditor, Wei, Wei & Co., LLP, an independent
registered public accounting firm that is headquartered in the United States, as an auditor of companies that are traded publicly in the
United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts inspections
to assess its compliance with the applicable professional standards. Our auditor has been inspected by the PCAOB on a regular basis with
the last inspection in 2020 and it is not included in the PCAOB Determinations. However, we cannot assure you whether Nasdaq or regulatory
authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor's audit
procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience
as it relates to our audit. If it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because
of a position taken by an authority in a foreign jurisdiction or any other reasons, the lack of inspection could cause the trading in
our securities to be prohibited under the Holding Foreign Companies Accountable Act, and as a result Nasdaq may delist our securities.
If our securities are unable to be listed on another securities exchange, such a delisting would substantially impair your ability to
sell or purchase our securities when you wish to do so, and the risk and uncertainty associated with a potential delisting would have
a negative impact on the price of our ordinary shares. Further, new laws and regulations or changes in laws and regulations in both the
United States and China could affect our ability to list our ordinary shares on Nasdaq, which could materially impair the market for and
market price for our securities.
Regulatory bodies of the United States may
be limited in their ability to conduct investigations or inspections of our operations in China.
From time to time, the Company may receive requests
from certain U.S. agencies to investigate or inspect the Company's operations, or to otherwise provide information. While the Company
will be compliant with these requests from these regulators, there is no guarantee that such requests will be honored by those entities
who provide products or services to us or with whom we associate, especially those entities located in China. Although the authorities
in China may establish a regulatory cooperation mechanism with its counterparts of another country or region to monitor and oversee cross-border
securities activities, such regulatory cooperation with the securities regulatory authorities in the United States may not be efficient
in the absence of a practical cooperation mechanism. Besides, according to Article 177 of the PRC Securities Law, or "Article 177,"
which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection
activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide
documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory
authority of the State Council and the competent departments of the State Council. While detailed interpretation of or implementing rules
under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or
evidence collection activities within China may further increase difficulties faced by you in protecting your interests. Furthermore,
an on-site inspection of our facilities by any of these regulators may be limited or entirely prohibited. Such inspections, though permitted
by the Company and its affiliates, are subject to the unpredictability of the Chinese enforcers, and may therefore be impossible to facilitate.
26
Substantial
uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law
and how
it may impact the viability of our current corporate structure, corporate governance and business operations.
On March 15, 2019, the National People's
Congress, or the NPC, approved the Foreign Investment Law, which took effect on January 1, 2020 and replaced the trio of existing laws
regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint
Venture Enterprise Law and the Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations.
The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with
prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic
investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. For
instance, under the Foreign Investment Law, "foreign investment" refers to the investment activities directly or indirectly
conducted by foreign individuals, enterprises or other entities in China. Though it does not explicitly classify contractual arrangements
as a form of foreign investment, there is no assurance that foreign investment through contractual arrangements would not be interpreted
as a type of indirect foreign investment activity under the definition in the future. In addition, the definition contains a catch-all
provision which includes investments made by foreign investors through means stipulated in laws or administrative regulations or other
methods prescribed by the State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions promulgated
by the State Council to provide for contractual arrangements as a form of foreign investment. In any of these cases, it will be uncertain
whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment under
the PRC laws and regulations.
In addition, the Foreign Investment Law grants
national treatment to foreign invested entities, except for those foreign invested entities that operate in industries deemed to be either
"restricted" or "prohibited" pursuant to the "Negative List" released by or upon approval by the State
Council. Foreign investors are prohibited from making any investments in the industries which are listed as "prohibited" in
the Negative List; and, after satisfying certain additional requirements and conditions as set forth in the "Negative List"
(for instance, Chinese shareholders are required to control or hold a certain percentage of equity interest in a foreign invested enterprise),
are allowed to make investments in industries which are listed as "restricted" in the Negative List. For any foreign investor
that fails to comply with the Negative List, the competent authorities can ban its investment activities, require such investor to take
measures to correct its non-compliance activities and impose other penalties. Though the business we conduct through the variable interest
entity is not within the category in which foreign investment is currently restricted or prohibited under the Negative List or other PRC
Laws, we expect that in the future Jiangsu Yanggu will engage in marketing survey services for online marketplaces. Marketing survey services
are within the category in which foreign investment is restricted pursuant to the Negative List.
In the event any of our future business and operations
carried out through the VIE are treated as a foreign investment and are classified in the "restricted" or "prohibited"
industry in the "Negative List" under the Foreign Investment Law, and such contractual arrangements are deemed as invalid
and illegal, we may have to unwind such contractual arrangements and/or dispose of such business, which could materially and adversely
affect our business and impede our ability to continue our operations.
Any lack of requisite approvals, licenses
or permits applicable to our business may have a material and adverse impact on our business, financial condition and results of operations.
Our business is subject to governmental supervision
and regulation by the relevant PRC governmental authorities. Together, these government authorities promulgate and enforce regulations
that cover many aspects of the collectibles and artwork trading and related services exchange platform. As a result, in certain circumstances
it may be difficult to determine what actions or omissions may be deemed to be in violation of applicable laws and regulations.
We have obtained all of the applicable licenses
and permits for our current business in China. We cannot assure you that we will be able to obtain any new permits or licenses required
for conducting our business in China or will be able to maintain our existing licenses. If the PRC government determines
that we are operating without the proper approvals, licenses or permits or promulgates new laws and regulations that require additional
approvals or licenses or imposes additional restrictions on the operation of any part of our business, it has the power, among other things,
to levy fines, confiscate our income, revoke our business licenses, and require us to discontinue the relevant parts of our business or
to impose restrictions on the affected portion of our business. Any of these actions by the PRC government may have a material
adverse effect on our business and results of operations.
27
If any company incorporated in Hong Kong
operating online collectibles and/or artwork trading platform is subject to PRC current or future laws and regulations regarding collectible
or artwork trading business, our operation may be materially adversely affected due to the uncertainty whether we would be able to obtain
approval from the provincial government and complete the filing with "Inter-Ministerial Joint Meetings of Clean-up and Corrective
Actions of Various Trading Platforms" (the "Joint Meeting") led by the China Securities Regulatory Commission (the "CSRC").
According to "Decision Of The State Council
On Cleaning Up And Rectifying Various Trading Platforms And Taking Effective Precautions Against Financial Risks" ("Decision
No.38") promulgated by the State Council of the PRC on November 11, 2011 and effective on the same day, and "Opinions Of The
General Office Of The State Council On The Implementation Of The Clean-Up And Rectification Of Various Trading Platforms" ("Opinion
No.37") promulgated by the General Office of the State Council of the PRC on July 12, 2012 and effective on the same day, any trading
places and their branches that violate any of the following provisions shall be cleaned up and rectified. Such parties must not:
(1)
Divide any equity into equal shares for public offering. An "equal share public offering" is when a trading place uses its services and facilities to divide its equity into equal shares and sell them to investors. The relevant provisions of the company law and the securities law shall apply to the public issuance of shares by a joint stock company.
(2)
Adopt centralized trading. The "centralized trading methods" referred to in this opinion include collective bidding, continuous bidding, electronic matching, anonymous trading, market makers and other trading methods, except for agreement transfers and legal auctions.
(3)
Continuously list and trade the rights and interests in accordance with standardized trading units. The "standardized trading unit" referred to in this opinion refers to the minimum trading unit set for other equities other than equity, and trading at the minimum trading unit or integer multiples thereof. "Continuous listing transaction" refers to listing and selling the same trading variety within 5 trading days after buying or listing, and buying the same trading variety within 5 trading days after selling.
(4)
Have a cumulative number of equity holders exceeding 200. Except as otherwise provided for by laws and administrative regulations, the cumulative number of actual holders of any equity shall not exceed 200 during the term of the company's existence, no matter in the course of issuance or transfer.
(5)
Carry out standardized contract trading by centralized trading. The "standardized contract" referred to in this opinion includes two situations: one is a unified contract established by the trading place with fixed terms other than price, which stipulates the delivery of a certain amount of the subject matter at a certain time and place in the future. The other is a contract made by the exchange that gives the buyer the right to buy or sell the agreed subject matter at a specified price at a certain time in the future.
(6)
Without the approval of the relevant financial administrative department of the state council, establish either trading places for the trading of financial products such as insurance, credit and gold, or use any existing other trading places for the trading of financial products such as insurance, credit and gold.
28
Additionally, according to "Notice Concerning
The Issuance Of Minutes Of The Special Session On The Clean-Up And Rectification Of Stamp And Commemorative Coins Trading Places"
promulgated by the Office of the Joint Meeting on August 2, 2017, any stamps, coins and magcards using a stock issuance-like model to
trading places mainly trading stamps by a concentrated bidding and "T+0" transaction method should cease to operate. The stamps,
coins and magcards being illegally traded must be made off-line in time. Trading places which have ceased operations shall not re-start
operating unless they obtain approval from the provincial government and complete the required filing with the Joint Meeting. Provincial
governments should re-evaluate the necessity of transactions of stamps, coins and magcards, considering the development and interests
of the economic society, as well as risks, efficiencies and costs. If it is considered as necessary to maintain transactions of stamps,
coins and magcards, the provincial government may appoint a stamp, coins and magcards exchange to organize stamps, coins and magcards
transactions by way of transfer of property through agreements. Such exchange must have obtained permission from the provincial government,
passed the examination and acceptance check of provincial government and completed filings at relevant joint meetings. In addition, such
exchange must be in strict compliance with Decision No.38 and Opinion No.37 and shall not adopt or allow concentrated bidding or other
types of centralized trading, and the interval between the purchase and sale of the same item or vice versa shall not be less than 5 trading
days.
We are an international online trading platform
that provides state-of-the-art, convenient services for various types of collectibles and artwork, incorporated in Hong Kong. We provide
an on-line platform for our clients to trading coins, stamps, ancient coins, and other collectibles and artwork. According to Rules for
Trading Cultural And Art Collections (interim) (the "Trading Rules") of International Exchange, we do not provide an "equal
share public offering", which means dividing a trading subject into several shares, but only allow a physical subject to be traded
as a whole. After trading, the original owner and the successful bidder can pick up the goods from the relevant storage company.
Currently, we use a "T+0" bidding
method and allow our clients to centralize trading in our platform, which was not against Hong Kong current related laws and regulations
regarding artwork trading. And, as a Hong Kong online collectible and artwork trading platform, we believe those laws and regulations
regulating collectible and artwork trading in mainland China, such as Decision No.38 and Opinion No.37, do not apply to our trading platforms.
However, there may be substantial uncertainties regarding the interpretation and application of future PRC laws and regulations applicable
to our business and that the PRC government or any other governmental authorities may in future impose license requirements or take further
actions having material adverse effects on our business or finance.
We may rely on dividends and other distributions
on equity paid by our PRC subsidiary and the subsidiaries of the VIE to fund any cash and financing requirements we may have, and any
limitation on the ability of our PRC subsidiary or the VIE and the subsidiaries of the VIE to make payments to us could have a material
adverse effect on our ability to conduct our business.
We are a holding company, and will rely on dividends
and other distributions on equity paid by our PRC subsidiary and Hong Kong subsidiaries for our cash and financing requirements, including
the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If our subsidiaries,
the VIE or its subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability
to pay dividends or make other distributions to us. In addition, the PRC tax authorities may require Jiangsu Yanggu to adjust its taxable
income under the contractual arrangements it currently has in place with the consolidated variable interest entity in a manner that would
materially and adversely affect its ability to pay dividends and other distributions to us. See "—
Risks Related to Our
Corporate Structure—Contractual arrangements in relation to the consolidated VIE and its subsidiaries
may be subject
to scrutiny by the PRC tax authorities and they may determine that we or our PRC consolidated VIE and its subsidiaries owe additional
taxes, which could negatively affect our financial condition and the value of your investment
."
Under PRC laws and regulations, our PRC subsidiary,
as a wholly foreign-owned enterprise in China, may pay dividends only out of its respective accumulated after-tax profits as determined
in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise is required to set aside at
least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory reserve funds, until the aggregate amount
of such funds reaches 50% of its registered capital. At its discretion, a wholly foreign-owned enterprise may allocate a portion of its
after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus
funds are not distributable as cash dividends.
Any limitation on the ability of our PRC subsidiary
to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. See also "
Risks Related
to Doing Business in China
—
If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification
could result in unfavorable tax consequences to us and our non-PRC shareholders
."
29
We are a holding company and currently we conduct
our business operations within the PRC through the VIE and its subsidiaries. If our board and management decide to keep the profits of
the subsidiaries of the VIE for their business development and expansion instead of making dividends to the VIE, the VIE might not be
able to pay its service fees to the WFOE pursuant to the Technical Consultation and Service Agreement, and our WFOE will not be able to
make dividend distribution to the Company.
PRC regulation of loans to and direct investment
in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans
to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability
to fund and expand our business.
Under PRC laws and regulations, we are permitted
to utilize the proceeds from financings to fund our PRC subsidiary by making loans to or additional capital contributions to our PRC subsidiary,
subject to applicable government registration and approval requirements.
Any loans to our PRC subsidiary, which are treated
as foreign-invested enterprises under PRC laws, are subject to PRC regulations and foreign exchange loan registrations. For example, loans
by us to our PRC subsidiary to finance its activities cannot exceed statutory limits and must be registered with the local counterpart
of the State Administration of Foreign Exchange, or SAFE. The statutory limit for the total amount of foreign debts of a foreign-invested
company is the difference between the amount of total investment as approved by MOFCOM or its local counterpart and the amount of registered
capital of such foreign-invested company.
We may also decide to finance our PRC subsidiary
by means of capital contributions. These capital contributions must be approved by MOFCOM or its local counterpart. In addition, SAFE
issued a circular in September 2008, SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency
registered capital into RMB by restricting how the converted RMB may be used. SAFE Circular 142 provides that the RMB capital converted
from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved
by the applicable government authority and unless otherwise provided by law, may not be used for equity investments within the PRC. Although
on July 4, 2014, the SAFE issued the Circular of the SAFE on Relevant Issues Concerning the Pilot Reform in Certain Areas of the
Administrative Method of the Conversion of Foreign Exchange Funds by Foreign-invested Enterprises, or SAFE Circular 36, which launched
a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises in certain designated
areas from August 4, 2014 and some of the restrictions under SAFE Circular 142 will not apply to the settlement of the foreign exchange
capitals of the foreign-invested enterprises established within the designate areas and such enterprises mainly engaging in investment
are allowed to use its RMB capital converted from foreign exchange capitals to make equity investments, our PRC subsidiary is not established
within the designated areas. On March 30, 2015, SAFE promulgated Circular 19, to expand the reform nationwide. Circular 19 came into force
and replaced both Circular 142 and Circular 36 on June 1, 2015. Circular 19 allows foreign-invested enterprises to make equity investments
by using RMB funds converted from foreign exchange capital. However, Circular 19 continues to prohibit foreign-invested enterprises from,
among other things, using RMB funds converted from its foreign exchange capitals for expenditure beyond its business scope, providing
entrusted loans or repaying loans between non-financial enterprises. In addition, SAFE strengthened its oversight of the flow and use
of the RMB capital converted from foreign currency registered capital of a foreign-invested company. The use of such RMB capital may not
be altered without SAFE's approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such
loans have not been used. Violations of these Circulars could result in severe monetary or other penalties. These circulars may significantly
limit our ability to use RMB converted from securities offerings to fund the establishment of new entities in China by our PRC subsidiary,
to invest in or acquire any other PRC companies through our PRC subsidiary, or to establish new variable interest entities in the PRC.
In light of the various requirements imposed by
PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be
able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with
respect to future loans to our PRC subsidiary or future capital contributions by us to our PRC subsidiary. If we fail to complete such
registrations or obtain such approvals, our ability to use our overseas' financing to capitalize or otherwise fund our PRC operations
may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
30
Fluctuations in exchange rates could have
a material adverse effect on our results of operations and the value of your investment.
Our reporting currency is the U.S. dollar while
the functional currency for our PRC subsidiary and the consolidated VIE and its subsidiaries is RMB. As a result, fluctuations in the
exchange rate between the U.S. dollar and RMB will affect the relative purchasing power in RMB terms of our U.S. dollar assets. Gains
and losses from the remeasurement of assets and liabilities that are receivable or payable in RMB are included in our consolidated statements
of income and comprehensive income. The remeasurement has caused the U.S. dollar value of our results of operations to vary with exchange
rate fluctuations, and the U.S. dollar value of our results of operations will continue to vary with exchange rate fluctuations. A fluctuation
in the value of RMB relative to the U.S. dollar could reduce our profits from operations and the translated value of our net assets when
reported in U.S. dollars in our financial statements. This could have a negative impact on our business, financial condition or results
of operations as reported in U.S. dollars. If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends
on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on
the U.S. dollar amount available to us. In addition, fluctuations in currencies relative to the periods in which the earnings are generated
may make it more difficult to perform period-to-period comparisons of our reported results of operations.
There remains significant international pressure
on the PRC government to adopt a flexible currency policy. Any significant appreciation or depreciation of the RMB may materially and
adversely affect our revenues, earnings and financial position, and the value of, and any dividends payable on, our ordinary shares in
U.S. dollars. For example, to the extent that we need to convert U.S. dollars we receive from an offering into RMB to pay our operating
expenses, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion.
Conversely, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings,
which in turn could adversely affect the market price of our ordinary shares.
Very limited hedging options are available in
China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to
reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability
and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency
exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency. As
a result, fluctuations in exchange rates may have a material adverse effect on your investment.
Governmental control of currency conversion
may limit our ability to utilize our net revenues effectively and affect the value of your investment.
The PRC government imposes controls on the convertibility
of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive a substantial part of our
net revenues in RMB. Under our current corporate structure, our company in the Cayman Islands will rely on dividend payments from our
PRC subsidiary and Hong Kong subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange
regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions,
can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, our PRC
subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance
of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment
registrations by the beneficial owners of our Company who are PRC residents. But approval from or registration with appropriate government
authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the
repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign
currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies
to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders.
31
Failure to make adequate contributions to
various employee benefit plans as required by PRC regulations may subject us to penalties.
We are required under PRC laws and regulations
to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented
payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances,
of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different
levels of economic development in different locations. As of the date of this report, we believe that we have made adequate employee benefit
payments. If we fail to make adequate payments in the future, we may be required to make up the contributions for these plans in the amount
of 110% of the amount in the preceding month. If we fail to make or supplement contributions of social security premiums within the stipulated
period, the social security premiums collection agency may request information of the deposit accounts of the employer with banks and
other financial institutions. In an extreme situation, where we failed to contribute social security premiums in full amount and do not
provide guarantee, the social security premiums collection agency may apply to a Chinese court for seizure, foreclosure or auction of
our properties of value equivalent to the amount of social security premiums payable, and the proceeds from auction shall be used for
contribution of social security premiums.  If we are subject to deposit, seizure, foreclosure or auction in relation to the underpaid
employee benefits, our financial condition and results of operations may be adversely affected.
Our business is susceptible to fluctuations
in the art and collectibles markets of China and Hong Kong.
We conduct our business primarily in China. Our
business depends substantially on the conditions of the PRC and Hong Kong art and collectibles markets. Demand for collectibles and artwork
in China has grown rapidly in the recent decade but such growth is often coupled with volatility in market conditions and fluctuation
in prices. Fluctuations of supply and demand in China's art market are caused by economic, social, political and other factors,
such as the outbreak of COVID-19 and government's action to contain the spread of the pandemic as well as its impact on the overall
Chinese economy, interest rates, discretionary consumer spending and investment desires in art and collectibles. Over the years, governments
at both national and local levels have announced and implemented various policies and measures aimed to regulate the art and collectible
markets. These measures have affected and may continue to affect the conditions of China's art and collectible markets and cause
fluctuations in collectibles and artwork prices. To the extent fluctuations in the art market may adversely affect the trading volume
on our platforms, or require us to provide our services on unfavorable terms, our financial condition and results of operations may be
materially and adversely affected.
Our business is susceptible to fluctuations
of the commodities trade on our market.
Starting in 2019, we have listed certain commodities
such as teas, Yun Nan Ham and Chinese mitten crabs on our platform. Customer trading activities are to some extent influenced by the changes
in these commodity prices in international and domestic markets. As a result, our future operating results may be subject to the fluctuations
of these products due to the risks related to natural disasters such as drought, flood, snowstorms or other abnormal temperature changes,
extreme weather and health epidemics or pandemics, which are unpredictable and beyond our control. Any pandemic outbreak such as COVID-19
and the government's action to contain the spread of the pandemic could materially negatively impact our ability of listing, trading
and delivery of such products. We currently have teas and Chinese mitten crabs on our platform. The prices and trading for teas and Chinese
mitten crabs could also be affected by the outbreak of diseases to tea trees and crabs which could significantly decrease the quantity
and quality of these products for trading on our platform. The general trading activities of these commodities are also directly affected
by factors such as economic and political conditions, macro trends in business and finance, investors' interest level in these commodity
trading and legislative and regulatory changes. Any one or more of these factors, or other factors, may reduce the trading activity level
of these commodities on our platform and adversely affect our business and results of operations and cash flows.
32
The legal rights we hold to use certain
leased properties could be challenged by property owners or other third parties, which could prevent us from operating our business
or increase the costs associated with our business operations.
For all of our business facilities and warehouses
that we are currently using, we do not hold property ownership with respect to the premises under which those facilities are operated.
Instead, we rely on leases with the property owners. Our general practice requires us to examine the title certificates of the property
owners as part of our due diligence before entering into a lease with them. If we fail to identify encumbrances on the title,
our leases of such properties may be challenged or even invalidated by government authority or relevant dispute resolution institutions.
As a result, the development or operations of our facilities on such properties could be adversely affected.
In addition, we are subject to the risks of other
potential disputes with property owners and to the forced closure of our facilities. Such disputes and forced closures, whether resolved
in the favor of us, may divert our management's attention, harm our reputation, or otherwise disrupt and adversely affect our business.
The filing with the China Securities Regulatory
Commission ("CSRC") may be required in connection with any offerings and certain events of the Company under New Overseas
Listing Rules, and we cannot assure you that we will be able to timely make such filing, in which case we may face sanctions by the CSRC
or other PRC regulatory agencies for failure to timely file with the CSRC.
On February 17, 2023, the CSRC released the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the "New Overseas Listing Rules")
with five interpretive guidelines, which will take effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises
to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an
issuer making an application for initial public offering and listing in an overseas market; b) an issuer making a subsequent overseas
securities offering after having been listed on an overseas market; c) a domestic company seeking an overseas direct or indirect listing
of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. According to the Notice on Arrangements
for Overseas Securities Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has
already completed overseas listing or (ii) has already obtained the approval for the offering or listing from overseas securities regulators
or exchanges but has not completed such offering or listing before effective date of the new rules and also completes the offering or
listing before September 30, 2023 will be considered as an existing listed company and is not required to make any filing until it conducts
a new offering in the future. Furthermore, upon the occurrence of any material events specified below after an issuer has completed its
offering and listed its securities on an overseas stock exchange, the issuer shall submit a report to CSRC within 3 working days after
the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities
regulatory agencies or other competent authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or
mandatory delisting.
Our PRC counsel has advised us based on their
understanding of the current PRC laws, rules and regulations relating to the CSRC's filing requirements, we may not be required
to file with CSRC for our listing and trading of our Ordinary Shares on the Nasdaq in the context of this offering, if we could complete
the initial public offering or obtain the approval from the SEC or Nasdaq before March 31, 2023. After the above New Overseas Listing
Rules become effective on March 31, 2023, the relevant filing requirement by the CSRC and other governmental authorities will be required
in connection with this offering. Given the current PRC regulatory environment, it is uncertain when and whether we and our PRC subsidiaries
will be required to obtain other permissions or approvals from the PRC government to list on U.S. exchanges in the future, and even if
and when such permissions or approvals are obtained, whether they will be denied or rescinded. If we or any of our PRC subsidiaries do
not receive or maintain such permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or
applicable laws, regulations, or interpretations change and we or our subsidiaries are required to obtain such permissions or approvals
in the future, it could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors
and cause the value of our securities to significantly decline or become worthless.
PRC regulations relating to offshore investment
activities by PRC residents may limit our PRC subsidiary's ability to increase its registered capital or distribute profits to us
or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.
SAFE promulgated the Circular on Relevant Issues
Relating to Domestic Resident's Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular
37, in July 2014 that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment
or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities
must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic
information (including change of such PRC citizens or residents, name and operation term), increases or decreases in investment amount,
transfers or exchanges of shares, or mergers or divisions. SAFE Circular 37 was issued to replace the Notice on Relevant Issues Concerning
Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip Investments via Overseas Special Purpose Vehicles,
or SAFE Circular 75. SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning
Direct Investment in February 2015, which took effect on June 1, 2015. This notice has amended SAFE Circular 37 requiring PRC residents
or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing.
33
If our shareholders who are PRC residents or entities
do not complete their registration as required, our PRC subsidiary may be prohibited from distributing its profits and proceeds from any
reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to
our PRC subsidiary. Moreover, failure to comply with the SAFE registration described above could result in liability under PRC laws for
evasion of applicable foreign exchange restrictions.
Our major shareholders and executive officers
who directly or indirectly hold shares in our Company and are known to us as being PRC residents have completed the foreign exchange registrations
required.
However, we may not be informed of the identities
of all of the PRC residents or entities holding direct or indirect interest in our Company, nor can we compel our beneficial owners to
comply with SAFE registration requirements. As a result, we cannot assure you that all of our shareholders or beneficial owners who are
PRC residents or entities have complied with, and will in the future make or obtain any applicable registrations or approvals required
by SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the
foreign exchange registrations of our PRC subsidiary, could subject us to fines or legal sanctions, restrict our overseas or cross-border
investment activities, limit our PRC subsidiary's ability to make distributions or pay dividends to us or affect our ownership structure,
which could adversely affect our business and prospects.
Any failure to comply with PRC regulations
regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other
legal or administrative sanctions.
In February 2012, SAFE promulgated the Notices
on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed
Company, replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China
for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company,
subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiary
of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained
to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our
executive officers and other employees who are PRC citizens or who have resided in the PRC for a continuous period of not less than one
year will be subject to these regulations when they are granted options or other awards. Failure to complete the SAFE registrations may
subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiary and
limit our PRC subsidiary's ability to distribute dividends to us. We may face other regulatory uncertainties that could restrict
our ability to grant stock awards under incentive plans to our directors, executive officers and employees under PRC law. The Board of
Directors of the Company approved and adopted Oriental Culture Holding LTD 2021 Omnibus Equity Plan (the "Equity Plan") on
November 8, 2021, which was approved at the stockholders' meeting on December 16, 2021. The total aggregate ordinary shares of the
Company authorized for issuance during the term of the Equity Plan is limited to 4,000,000 shares and none has been granted as of the
date of this report. Our executive officers, director and other employees who are PRC citizens or who have resided in the PRC for a continuous
period of not less than one year and receive stock awards from the Company will be subject to the SAFE registration requirement.
If we are classified as a PRC resident enterprise
for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
Under the PRC Enterprise Income Tax Law and its
implementation rules, an enterprise established outside of the PRC with a "de facto management body" within the PRC is considered
a resident enterprise and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules
define the term "de facto management body" as the body that exercises full and substantial control over and overall management
of the business, production, personnel, accounts and properties of an enterprise. In April 2009, the State Administration of Taxation
issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the "de facto management
body" of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore
enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, the
criteria set forth in the circular may reflect the State Administration of Taxation's general position on how the "de facto
management body" test should be applied in determining the tax resident status of all offshore enterprises. According to Circular
82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident
by virtue of having its "de facto management body" in China and will be subject to PRC enterprise income tax on its global
income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the
PRC; (ii) decisions relating to the enterprise's financial and human resource matters are made or are subject to approval by
organizations or personnel in the PRC; (iii) the enterprise's primary assets, accounting books and records, company seals,
and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior
executives habitually reside in the PRC.
34
We believe none of our entities outside of China
is a PRC resident enterprise for PRC tax purposes. See "Taxation—People's Republic of China Taxation."
However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with
respect to the interpretation of the term "de facto management body." As all of our executive officers are based in China,
it remains unclear how the tax residency rule will apply to our case. If the PRC tax authorities determine that we or any of our subsidiaries
outside of China is a PRC resident enterprise for PRC enterprise income tax purposes, then we or such subsidiary could be subject to PRC
tax at a rate of 25% on its world-wide income, which could materially reduce our net income. In addition, we will also be subject to PRC
enterprise income tax reporting obligations. Furthermore, if the PRC tax authorities determine that we are a PRC resident enterprise for
enterprise income tax purposes, gains realized on the sale or other disposition of our ordinary shares may be subject to PRC tax, at a
rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any
applicable tax treaty), if such gains are deemed to be from PRC sources. It is unclear whether non-PRC shareholders of our Company would
be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated
as a PRC resident enterprise. Any such tax may reduce the returns on your investment in our ordinary shares.
Enhanced scrutiny over acquisition transactions
by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.
The PRC tax authorities have enhanced their scrutiny
over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests in a PRC resident enterprise,
by a non-resident enterprise by promulgating and implementing SAT Circular 59 and Circular 698, which became effective in January 2008,
and Circular 7 in replacement of some of the existing rules in Circular 698, which became effective in February 2015.
Under Circular 698, where a non-resident enterprise
conducts an "indirect transfer" by transferring the equity interests of a PRC "resident enterprise" indirectly
by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, may be subject
to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial
purposes. As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up to 10%. Circular 698 also provides
that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price
lower than the fair market value, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the
transaction.
In February 2015, the SAT issued Circular 7 to
replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly different
from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect transfers set forth under Circular 698 but
also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company.
In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and has introduced
safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Circular 7 also
brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable
assets. Where a non-resident enterprise conducts an "indirect transfer" by transferring the taxable assets indirectly
by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee,
or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a "substance
over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable
commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such
indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer
is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.
35
We face uncertainties on the reporting and consequences
on future private equity financing transactions, share exchange or other transactions involving the transfer of shares in our Company
by investors that are non-PRC resident enterprises. The PRC tax authorities may pursue such non-resident enterprises with respect
to a filing or the transferees with respect to withholding obligations, and request our PRC subsidiaries to assist in the filing. As a
result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed,
under Circular 59 or Circular 698 and Circular 7, and may be required to expend valuable resources to comply with Circular 59, Circular
698 and Circular 7 or to establish that we and our non-resident enterprises should not be taxed under these circulars, which may have
a material adverse effect on our financial condition and results of operations.
The PRC tax authorities have the discretion under
SAT Circular 59, Circular 698 and Circular 7 to make adjustments to the taxable capital gains based on the difference between the fair
value of the taxable assets transferred and the cost of investment. We plan to pursue acquisitions in the future that may involve complex
corporate structures. If we are considered a non-resident enterprise under the PRC Enterprise Income Tax Law and if the PRC tax authorities
make adjustments to the taxable income of the transactions under SAT Circular 59 or Circular 698 and Circular 7, our income tax costs
associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results
of operations.
If we cannot effectively secure our network,
customers' personal information, which we collect through our online platforms, it may be subject to leakage or theft, and if the
regulators believe we have failed to fulfill our network security obligations, our online platform may be required to suspend operations
to make rectification, which may have a material adverse effect on our operations and financial results due to the large amount of our
daily trading conducted online.
In China, regulatory authorities have implemented
and are considering a number of legislative and regulatory proposals concerning data protection. The PRC Civil Code, which is issued by
the PRC National People's Congress on May 28, 2020 and became effective on January 1, 2021, stipulates that the personal information
of a natural person shall be protected by the law. Any organization or individual shall legally obtain the personal information of others
when necessary and ensure the safety of such personal information, and shall not illegally collect, use, process or transmit the personal
information of others, or illegally buy or sell, provide or make public the personal information of others. On November 7, 2016, the Standing
Committee of the National People's Congress of the PRC (the "NPC") promulgated the Cybersecurity Law of the PRC ("Cybersecurity
Law") which became effective on June 1, 2017. Under this law, network operators must provide cybersecurity protection and protect
the integrity, confidentiality and availability of network data. The Cybersecurity Law also standardizes the collection and usage of personal
information and requires network operators to protect users' privacy security. If a network operator violates the Cybersecurity
Law, it can face various penalties, including but not limited to the suspension of related businesses, winding up, shutting down its websites,
and revocation of its business license, all of which may be imposed by the relevant authority, along with fines up to RMB 1 million (approximately
$1456,000) if severe damage occurred. The Personal Information Protection Law of the PRC was adopted on August 20, 2021 and became effective
on November 1, 2021 , stipulating that the personal information shall be processed with the consent of the individual on the premise of
full prior notification, and intensifying the punishment for illegal acts.
We
collect and process the personal information of the customers who register on our online platforms, for the purpose of managing and maintaining
our customers and their trading information. Nanjing Yanyu, one of the wholly-owned subsidiaries of Jiangsu Yanggu, which having a primary
business to provide technical support for International Exchange and HKDAEx's online collectibles, art and commodities e-commerce
platforms, established network security policies, including Data Security Management Measures, Data Center Network Security Management
Rules, Information Security Management Rules and an Information Security Emergency Plan. We also publish "Investor Information Protection
Policy" on our online platforms, to help the customers who register on our online platforms understand what, where and how their
private information be collected and used by International
Exchange,
HKDAEx and its affiliates and what measures we take to protect their personal information. Nonetheless, we cannot assure that our cybersecurity
protection policies and related technical measures are adequate to prevent network data in our online platforms from being breached, stolen
or tampered with. If our online platform network is at risk, we may be required by competent cybersecurity supervision authorities to
suspend our online platforms before rectification and we may be fined up to RMB 1 million (approximately $146,000) if it is found that
our online platforms have material security risks or if severe cybersecurity events occur due to failure of our network security protection.
36
Although the subsidiary of the VIE operates
and maintains the network platforms in mainland China, our main business, providing collectibles and artwork e-commerce services, is
conducted by International Exchange in Hong Kong. Therefore, our business model may be considered involving transfer of customers'
personal information across borders and we may be subject to the Measures for the Security Assessment of Data Cross-border Transfer.
We cannot guarantee that we can pass the safety assessment for cross-border transfers of personal information required by Measures for
the Security Assessment of Data Cross-border Transfer. If we fail this assessment, International Exchange may not use customers'
personal information stored in mainland China to process its trading on the online platform, which would result in a significant adverse
impact on our business operations.
On
July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on September 1,
2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC under the
following circumstances: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure
operator or data processor who processes personal information of over 1 million people provides personal information to overseas;
(iii) any data processor who provides personal information to overseas and has already provided personal information of more than
100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st of the previous year;
and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the
CAC.
We provide maintenance and warehouse services
to our online platforms for collectibles, artwork and commodities trading through the subsidiaries of the VIE in mainland China and we
don't transfer customers data cross-border. However, if we need to transfer customers data cross-border in the future and reach
the threshold requirements Measures for the Security Assessment of Data Cross-border Transfer, we cannot assure that we will pass this
safety assessment, which may have a material adverse effect on our operations and financial results.
The preferential tax treatment for Kashi
Longrui and Kashi Dongfang is only for 5 years and has expired in December 2022 and the expiration of preferential tax treatments will
materially and negatively affect our financial results.
Pursuant to the "Notice on Enterprise Income
Tax Preferential Policy of Xinjiang Kashi and Horgos Special Economic Development Zone" ("Circular 112") promulgated
by the Ministry of Finance and the State Taxation Administration on November 29, 2011 and effected on the same day, the "Several
Opinions of Supporting the Construction of Xinjiang Kashi and Horgos Special Economic Development Zone" ("Circular 33")
promulgated by the State Council on September 30, 2011 and effected on the same day, and the "Catalogue of Mainly Encouraged Developing
Industry with Preferential Enterprise Income Tax in Difficult Areas in Xinjiang"("Circular 85") promulgated by Ministry
of Finance, the State Administration of Taxation, National Development and Reform Commission and the Ministry of Industry and Information
Technology on July 20, 2016 and effected on January 1, 2016, from January 1, 2010 to December 31, 2020, which has been extended to December
31, 2030, enterprises fall into the scope of Circular 85 in Xinjiang Kashi and Horgos Special Economic Development Zone, shall be exempted
from enterprise income tax for five years from the tax year in which the first production and operation income is obtained.
37
Since Kashi Longrui Business Management Services
Co., Ltd. ("Kashi Longrui"), a subsidiary of the VIE was incorporated on July 19, 2018 in Xinjiang Kashi Special Economic
Development Zone ("Xinjiang Kashi") and its main business is marketing promotion and consulting, and since Kashi Dongfang
Cangpin Culture Development Co., Ltd. ("Kashi Dongfang"), a subsidiary of the VIE was incorporated on August 29, 2018 in Xinjiang
Kashi and its main business is providing online and offline joint custody and storage services, these two companies are exempted from
income tax for 5 years pursuant to the regulations above.
After
the expiration of their initial 5-year period ending in December 2022
,
Kashi Longrui and Kashi Dongfang will not be exempted from enterprise income tax and will be subject to the PRC Enterprise Income Tax
at the rate of 25% on its worldwide income, which will significantly reduce our profitability and negatively affect our financial results.
Risks Related to Doing Business in Hong
Kong
The Hong Kong legal system embodies uncertainties
which could limit the legal protections available to you and us.
As one of the conditions for the handover of the sovereignty of Hong
Kong to China, China had to accept some conditions such as Hong Kong's Basic Law before its return. The Basic Law ensured Hong Kong
will retain its own currency (the Hong Kong Dollar), legal system, parliamentary system and people's rights and freedom for fifty
years from 1997. This agreement has given Hong Kong the freedom to function in a high degree of autonomy. The Special Administrative Region
of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary and courts of last resort, immigration
and customs, public finance, currencies and extradition. Hong Kong continues using the English common law system.
However, if the PRC reneges on its agreement to
allow Hong Kong to function autonomously, this could potentially impact Hong Kong's common law legal system and may in turn bring
about uncertainty in, for example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our
business and operation. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective
as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system,
including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local
regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce
our agreements with our customers.
It will be difficult to acquire jurisdiction
and enforce liabilities against our officers, directors and assets based in Hong Kong.
Certain of our assets are located in Hong Kong
and our officers and our present directors reside outside of the United States. As a result, it may not be possible for United States
investors to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of United
States courts predicated upon civil liabilities and criminal penalties of our directors and officers under Federal securities laws.
We may have difficulty establishing adequate
management, legal and financial controls in Hong Kong, which could impair our planning processes and make it difficult to provide accurate
reports of our operating results.
Although we will be required to implement internal
controls, we may have difficulty in hiring and retaining a sufficient number of qualified employees to work in Hong Kong in these areas.
As a result of these factors, we may experience difficulty in establishing the required controls, making it difficult for management to
forecast its needs and to present the results of our operations accurately at all times. If we are unable to establish the required controls,
market makers may be reluctant to make a market in our stock and investors may be reluctant to purchase our stock, which would make it
difficult for you to sell any shares that you may own or acquire.
Our business may be affected by the Personal
Data (Privacy) Ordinance of Hong Kong.
Members of our leading online platforms in Hong
Kong, including China International Assets and Equity of Artworks Exchange Limited, would need to provide personal information during
registration and our online platforms may monitor the online behavior of the members so as to gather data for market trend analysis and
upgrade our website. As such, our business in Hong Kong is subject to Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong
Kong) ("PDPO"), which aims to protect the privacy of individuals personal data. The PDPO imposes a statutory duty on data
users to comply with the requirements of the six data protection principles (the "Data Protection Principles") contained in
Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection
Principle unless the act or practice, as the case may be, is required or permitted under the PDPO. If we violate the PDPO, we may be subject
to fines and/or other penalties and may incur legal costs and experience negative media coverage, which could adversely affect our business,
results of operations and reputation.
38
Risks Related to Our Ordinary Shares
Our ordinary shares may be thinly traded
and you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate
your shares.
Our ordinary shares may be "thinly-traded",
meaning that the number of persons interested in purchasing our ordinary shares at or near bid prices at any given time may be relatively
small or non-existent. This situation may be attributable to a number of factors, including the fact that we are relatively unknown to
stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume,
and that even if we came to the attention of such persons, they tend to be risk-averse and might be reluctant to follow an unproven company
such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned.  As a consequence,
there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned
issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect
on share price. A broad or active public trading market for our ordinary shares may not develop or be sustained.
The market price for our ordinary shares
may be volatile.
The market price for our ordinary shares may be
volatile and subject to wide fluctuations due to factors such as:
●
the perception of U.S. investors and regulators of U.S. listed Chinese companies;
●
actual or anticipated fluctuations in our operating results;
●
changes in financial estimates by securities research analysts;
●
negative publicity, studies or reports;
●
conditions in Chinese and Hong Kong art and collectible and related service markets;
●
our capability to catch up with the technology innovations in the industry;
●
changes in the economic performance or market valuations of other collectibles and artwork trading and related services companies;
●
announcements by us or our competitors of acquisitions, strategic partnerships, joint ventures or capital commitments;
●
addition or departure of key personnel;
●
fluctuations of exchange rates between RMB, Hong Kong dollar and the U.S. dollar;
●
general economic or political conditions in China and Hong Kong; and
●
health epidemics or pandemics, such as the outbreak of COVID-19 and government's action to contain the spread of the pandemic.
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.
39
Volatility in our ordinary shares price
may subject us to securities litigation.
The market for our ordinary shares may have, when
compared to seasoned issuers, significant price volatility and we expect that our share price may continue to be more volatile than that
of a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against
a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation.
Securities litigation could result in substantial costs and liabilities and could divert management's attention and resources.
In order to raise sufficient funds to enhance
operations, we may have to issue additional securities at prices which may result in substantial dilution to our shareholders.
If we raise additional funds through the sale
of equity or convertible debt, our current shareholders' percentage ownership will be reduced. In addition, these transactions may
dilute the value of ordinary shares outstanding. We may have to issue securities that may have rights, preferences and privileges senior
to our ordinary shares. We cannot provide assurance that we will be able to raise additional funds on terms acceptable to us, if at all.
If future financing is not available or is not available on acceptable terms, we may not be able to fund our future needs, which would
have a material adverse effect on our business plans, prospects, results of operations and financial condition.
We are not likely to pay cash dividends
in the foreseeable future.
We currently intend to retain any future earnings
for use in our operations and expansion of our business. Accordingly, we do not expect to pay any cash dividends in the foreseeable future,
but will review this policy as circumstances dictate. Should we determine to pay dividends in the future, our ability to do so will depend
upon the receipt of dividends or other payments from the WFOE. The WFOE may, from time to time, be subject to restrictions on its ability
to make distributions to us, including restrictions on the conversion of RMB into U.S. dollars or other hard currency and other regulatory
restrictions.
Our board of directors has complete discretion
as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary
resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under Cayman Islands law,
a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend
be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if
our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on,
among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions,
if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our
board of directors. Accordingly, the return on your investment in our ordinary shares will likely depend entirely upon any future price
appreciation of our ordinary shares. There is no guarantee that our ordinary shares will appreciate in value or even maintain the price
at which you purchased the ordinary shares. You may not realize a return on your investment in our ordinary shares and you may even lose
your entire investment in our ordinary shares.
You may face difficulties in protecting
your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the United
States and it may be difficult for a shareholder of ours to effect service of process or to enforce judgements obtained in the United
States courts.
Our corporate affairs are governed by our current
memorandum and articles of association and by the Companies Act (As Revised) and common law of the Cayman Islands. The rights of shareholders
to take legal action against our directors and us, actions by minority shareholders and the fiduciary responsibilities 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 English common law. Decisions of
the Privy Council (which is the final court of appeal for British overseas territories such as the Cayman Islands) are binding on a court
in the Cayman Islands. Decisions of the English courts, and particularly the Supreme Court of the United Kingdom and the Court of Appeal
are generally of persuasive authority but are not binding on the courts of the Cayman Islands. The rights of our shareholders and the
fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or
judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws as compared to
the United States, and provide significantly less protection to investors. In addition, Cayman Islands companies may not have standing
to initiate a shareholder derivative action before the United States federal courts. The Cayman Islands courts are also unlikely to impose
liabilities against us in original actions brought in the Cayman Islands, based on certain civil liability provisions of United States
securities laws.
Currently, all of our operations are conducted
outside the United States, and substantially all of our assets are located outside the United States. All of our directors and officers
are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets 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.
40
As a result of all of the above, our shareholders
may have more difficulty 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.
Our ordinary shares
may be delisted from the NASDAQ Stock Market ("NASDAQ").
On November 9, 2022, the Company received a letter
from the Nasdaq Stock Market ("Nasdaq") notifying the Company that, because the closing bid price for the Company's
ordinary shares listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer meets the minimum bid price requirement
for continued listing on Nasdaq under Nasdaq Marketplace Rule 5550(a)(2), which requires a minimum bid price of $1.00 per share
(the "Minimum Bid Price Requirement").
The notification has no immediate effect on the
listing of the Company's ordinary shares. In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has a period of
180 calendar days from the date of notification, until May 8, 2023 (the "Compliance Period"), to regain compliance with the
Minimum Bid Price Requirement. If at any time before the expiration of the Compliance Period the bid price of the
Company's ordinary shares closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide
written notification that the Company has achieved compliance with the Minimum Bid Price Requirement. If the Company does not
regain compliance by the end of the Compliance Period, the Company may be eligible for an additional 180 calendar day period to regain
compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares
and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need
to provide written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split,
if necessary. However, if it appears to Nasdaq that the Company will not be able to cure the deficiency, or if the Company is otherwise
not eligible, Nasdaq will provide notice that the Company's securities will be subject to delisting.
We are a foreign private issuer within the
meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public
companies.
We are a foreign private issuer within the meaning
of the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to United States domestic public companies.
For example:
●
we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company;
●
for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies;
●
we are not required to provide the same level of disclosure on certain issues, such as executive compensation;
●
we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;
●
we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and
●
we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction.
We are required to file an annual report on Form
20-F within four months of the end of each fiscal year. 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, you may not be afforded the
same protections or information that would be made available to you were you investing in a U.S. domestic issuer.
41
Because we are a foreign private issuer
and are exempt from certain NASDAQ corporate governance standards applicable to U.S. issuers, you may have less protection than you would
have if we were a domestic issuer.
The Nasdaq Listing Rules require listed companies
to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to
follow home country practice in lieu of the above requirements. On March 1, 2023, the Company has notified Nasdaq that it will follow
its home country practice in lieu of the provisions under Rule 5620(a), Rule 5635(a)(1), Rule 5635(b), Rule 5635(c) and Rule 5635(d) of
the NASDAQ Stock Market Marketplace Rules (the "Rules") by relying on the exemption provided for foreign private issuers under
Marketplace Rule 5615(a)(3). Rule 5620(a) requires that the Company to hold an annual meeting of shareholders no later than one year after
the end of the Company's fiscal year-end; Rule 5635(a)(1) of the Rules requires shareholder approval for the issuance of securities in
connection with the acquisition of the stock or assets of another company; Rule 5635(b) of the Rules requires shareholder approval for
the issuance of securities when the issuance will result in a change of control of the company; Rule 5635(c) of the Rules requires shareholder
approval for share incentive plans; and Rule 5635(d) of the Rules requires shareholder approval for the issuance of securities, other
than in a public offering, equal to 20% or more of the voting power outstanding before the issuance for less than the greater of book
or market value of the stock. The corporate governance practice in our home country, the Cayman Islands, does not require the Company
to follow or comply with the requirements of Rule 5620(a), Rule 5635(a)(1), Rule 5635(b), Rule 5635(c) and Rule 5635(d). We will comply
with other corporate governance requirements of the Nasdaq Listing Rules. However, we may consider following home country practice in
lieu of additional requirements under the Nasdaq Listing Rules with respect to certain corporate governance standards in the future which
may afford less protection to investors.
We are an "emerging growth company"
within the meaning of the Securities Act, and  we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies, this could make it more difficult to compare our performance with other public companies
.
We are an "emerging growth company"
within the meaning of the Securities Act, as modified by the JOBS Act. Section 102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that
have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange
Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to
opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an
election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard
is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt
the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial
statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out
of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
As an "emerging growth company"
under applicable law, we will be subject to reduced disclosure requirements. Such reduced disclosure may make our ordinary shares less
attractive to investors.
For as long as we remain an "emerging growth
company", as defined in the JOBS Act, we will elect to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not "emerging growth companies", including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding
advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.  Because
of these reduced regulatory requirements, our shareholders would be left without information or rights available to shareholders of more
mature companies. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for
our ordinary shares and our share price may be more volatile.
If we are classified as a passive foreign
investment company, United States taxpayers who own our ordinary shares may have adverse United States federal income tax consequences.
We will be a "passive foreign investment
company," or "PFIC," if, in any particular taxable year, either (a) 75% or more of our gross income for such year
consists of certain types of "passive" income or (b) 50% or more of the average quarterly value of our assets (as determined
on the basis of fair market value) during such year produce or are held for the production of passive income (the "asset test").
Although the law in this regard is unclear, we intend to treat the VIE (including its subsidiaries) as being owned by us for U.S. federal
income tax purposes, not only because we exercise effective control over the operation of such entity but also because we are entitled
to substantially all of its economic benefits, and, as a result, we consolidate its results of operations in our consolidated financial
statements. Assuming that we are the owner of the VIE (including its subsidiaries) for U.S. federal income tax purposes, and based upon
our current and expected income and assets, including goodwill, and the value of our ordinary shares, we do not believe that we were a
PFIC for the taxable year ended December 31, 2022 and we do not expect to be a PFIC for the foreseeable future. However, there can
be no assurance that we will not be a PFIC for the current taxable year. In addition, there can be no assurance that we will not be a
PFIC for any future taxable year. PFIC status is a factual determination that must be tested each taxable year and will depend on the
composition of our assets and income in each such taxable year.
42
We will be classified as a PFIC for any taxable
year if either (i) at least 75% of our gross income for the taxable year is passive income or (ii) at least 50% of the value
of our assets (based on a quarterly value of the assets during the taxable year) is attributable to assets that produce or are held for
the production of passive income. In determining the average percentage value of our gross assets, the aggregate value of our assets will
generally be deemed to be equal to our market capitalization (determined by the sum of the aggregate value of our outstanding equity)
plus our liabilities. Accordingly, we could become a PFIC if our market capitalization were to decrease significantly while we hold substantial
cash, cash equivalents or other assets that produce or are held for the production of passive income. In addition, because there are uncertainties
in the application of the relevant PFIC rules, it is possible that the Internal Revenue Service, or IRS, may challenge our classification
of certain income and assets as non-passive or our valuation of our tangible and intangible assets, which could result in a determination
that we were a PFIC for the current or subsequent taxable years.
If we were classified as a PFIC in any taxable
year in which a U.S. Holder (as defined in "Item 10. Additional Information—10.E. Taxation—United States Federal Income
Taxation") holds the ordinary shares, the U.S. Holder would generally be subject to additional taxes and interest charges on certain
"excess" distributions we make and on the gain, if any, recognized on the disposition or deemed disposition of such U.S. Holder's
ordinary shares, even if we are no longer a PFIC in the year of distribution or disposition. Moreover, such U.S. Holder would also be
subject to special U.S. tax reporting requirements. For more information on the U.S. tax consequences to U.S. Holders that would result
from our classification as a PFIC, see "
Item 10. Additional Information—10.E. Taxation—United States federal income
taxation—Passive foreign investment company
."
Our principal shareholders have, and will
have substantial influence over our Company and their interests may not be aligned with the interests of our other shareholders.
As of April 27, 2023, Mun Wah Wan, chairman of
our board of directors, beneficially owns 6.6% of our outstanding ordinary shares through HKFAEx Group Limited, which is owned by The
Pride Group Holdings Limited, of which Mun Wah Wan is the sole shareholder, and each of Aimin Kong and Huajun Gao, beneficially owns
11.5% of our outstanding ordinary shares through Oriental Culture Investment Development LTD and Oriental Culture Investment Communication
LTD, respectively, and, collectively, such three individuals beneficially own approximately 30% of our total outstanding ordinary shares.
As a result of their significant shareholding, these shareholders have, and will continue to have, substantial influence over our business,
including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and
other significant corporate actions. They may take actions that are not in the best interests of us or our other shareholders. This concentration
of ownership may discourage, delay or prevent a change in control of our Company, which could deprive our shareholders of an opportunity
to receive a premium for their shares as part of a sale of our Company and might reduce the market price of our ordinary shares.
43
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
We are an online provider of collectible and artwork
e-commerce services, which allow collectors, artists, art dealers and owners to access a much bigger art and collectable trading market
where they can engage with a wider range of collectible or artwork investors than they could likely encounter without our platforms. We
currently facilitate trading by individual and institutional customers of all kinds of collectibles, artwork and certain commodities on
our leading online platforms owned by our subsidiaries in Hong Kong, namely the China International Assets and Equity of Artworks Exchange
Limited and HKDAEx Limited. We commenced our operations in March 2018 and our customer trading volume has been growing rapidly since then.
We also provide online and offline integrated marketing, storage and technical maintenance services to our customers in China. We, Oriental
Culture Holding LTD, are a holding company with operations conducted via our subsidiaries, variable interest entity and its subsidiaries.
We were incorporated under the laws of the Cayman
Islands as an offshore holding company on November 29, 2018, and we own 100% of the equity interest in Oriental Culture Development LTD
("Oriental Culture BVI"), which was incorporated on December 6, 2018 under the laws of British Virgin Islands.
Through Oriental Culture BVI, we own 100% of the
equity interest in HK Oriental Culture Investment Development Limited ("Oriental Culture HK"), a company formed under the
laws of Hong Kong on January 3, 2019. Through Oriental Culture HK, we directly own 100% of the equity interest in Nanjing Rongke Business
Consulting Service Co., Ltd. (the "WFOE" or "Nanjing Rongke"), a wholly-owned PRC subsidiary of Oriental Culture
HK. The WFOE entered into a series of agreements with Jiangsu Yanggu Culture Development Co., Ltd. ("Jiangsu Yanggu") and
Jiangsu Yanggu's shareholders, through which we effectively control and derive all of the economic interest and benefits from Jiangsu
Yanggu.
On November 22, 2013, China International Assets
and Equity of Artworks Exchange Limited (the "International Exchange") was incorporated under Hong Kong law. International
Exchange provides an online platform to facilitate collectible and artwork trading e-commerce and became our subsidiary as a result of
the reorganization of the common control of Oriental Culture and International Exchange.
Jiangsu Yanggu Culture Development Co., Ltd. (the
"VIE") was incorporated on August 23, 2017, and is the holding company for all its wholly owned PRC subsidiaries. Nanjing
Yanqing Information Technology Co., Ltd., ("Nanjing Yanqing") was incorporated on May 17, 2018  and Nanjing Yanyu Information
Technology Co., Ltd. ("Nanjing Yanyu") was incorporated on June 7, 2018 and commenced operations in July 2018. Their primary
business is to provide technical and other support for International Exchange and HKDAEx's online collectible, art and commodities
e-commerce business, and to sell software applications and provide support services to our affiliates and third parties.
Kashi Longrui Business Management Services Co.,
Ltd. ("Kashi Longrui"), a wholly-owned subsidiary of Nanjing Yanqing, was incorporated on July 19, 2018 and commenced operations
in August 2018. Its primary business is to provide online and offline marketing services for our e-commerce platform's members and
other related services.
Kashi Dongfang Cangpin Culture Development Co.,
Ltd. ("Kashi Dongfang"), a wholly-owned subsidiary of Nanjing Yanqing, was incorporated on August 29, 2018 and commenced operations
in September 2018. Its primary focus is to provide online and offline warehouse management services for our e-commerce platform's
members.
Zhongcang Warehouse Co., Ltd. ("Zhongcang")
was incorporated on July 19, 2018 and is a joint venture by Kashi Longrui with third parties, namely Zhonglianxin Industry Group (Hunan)
Co., Ltd., Nanjing Zhonghao Culture Media Limited, and Zhengjiang Culture Tourism International Cultural and Creative Industry Park Development
Co., Ltd. to provide warehouse services to our customers. Kashi Longrui owned 18% of Zhongcang.
On April 18, 2018, HKDAEx Limited ("HKDAEx")
was incorporated under Hong Kong law. On May 9, 2019, we acquired all of the outstanding equity interests of HKDAEx from its original
shareholder-HKFAEX Group Limited ("HKFAEX") for a consideration of 2,400,000 ordinary shares (pre forward share split) of
the Company. Effective from May 9, 2019, HKDAEx became our wholly-owned subsidiary. HKDAEx provides our customers with an online trading
platform for products and commodities other than collectible and artwork in Hong Kong.
On November 8, 2019, the shareholders of the Company
adopted the Second Amended and Restated Articles of Association to effect a 2 for 1 forward share split of the total authorized and issued
and outstanding shares of the Company. As a result of the 2 for 1 forward share split, the Company's total authorized shares are
1,000,000,000 shares comprising of (i) 900,000,000 ordinary shares with a par value of $0.00005 each and (ii) 100,000,000 preferred shares
with a par value of $0.00005 each, and the Company's issued and outstanding ordinary shares increased from 12,400,000 shares to
24,800,000 shares. In addition, all existing shareholders agreed to surrender to the Company as treasury shares, 12.5% of the then outstanding
ordinary shares (3,100,000 ordinary shares) for no consideration.
On May 28, 2020, all existing shareholders of
the Company agreed to surrender an additional 6,510,000 ordinary shares, or 30% of the Company's then outstanding ordinary shares,
at no consideration to be reserved as treasury shares of the Company.
On December 1, 2020, the Company completed its IPO of 5,065,000 ordinary
shares and 59,400 option shares at a public offering price of $4.00 per share, par value US$0.00005 per share, resulting in net proceeds
to the Company of approximately $17.3 million after deducting underwriting commission, offering costs and other expenses.
44
In March 2022, Jiangsu Yanggu signed a Capital
Increase Investment Agreement ("Agreement") with Noble Family New Retail Co., Ltd. ("Noble Family"), Beijing Wen
Jiao Technology Co., Ltd. ("BJWJ") and two investors to acquire shares and increase capital of Beijing Jiu Yu Ling Jing Technology
Co., Ltd. ("JYLJ"). Pursuant to the Agreement, Jiangsu Yanggu will acquire 11.875% equity interest of JYLJ through a cash
contribution of RMB 6 million (approximately $923,076) and providing certain internet development resources and technical support to JYLJ.
Noble Family and BJWJ, the existing shareholders of JYLJ and two new investors will also make contributions in cash for an aggregate of
RMB44 million (approximately $6.77 million) and certain initial work and business resources to JYJL. After this capital increase, Jiangsu
Yanggu has become the third largest shareholder of JYLJ. JYJL primarily engages in wine and alcohol product merchants and customers, as
well as product launch, brand showcase, marketing and promotion and it is currently in the process of developing a "Wine and Spirits"
metaverse, and the amount raised through increase of share capital will be mainly used for this development.
Our principal executive offices are located at
Room 1402, Richmake Commercial Building, 198-200 Queen's Road Central, Hong Kong. Our telephone number at this address is (852)
2110-3909. Our registered office in the Cayman Islands is located at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay
Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands. Investors should contact us for any inquiries through the address and telephone
number of our principal executive offices.
The SEC maintains a web site at www.sec.gov that
contains reports and other information regarding issuers that file electronically with the SEC using its EDGAR system.
See "Item 5. Operating and Financial Review
and Prospects — B. Liquidity and Capital Resources — Capital Expenditures" for a discussion of our capital expenditures.
B. Business Overview
We are an online provider of collectible and artwork
e-commerce services, which allow collectors, artists and art dealers and owners to access a much bigger art trading market where they
can engage with a wider range of collectibles and artwork investors than they could likely encounter without our platforms. We currently
facilitate trading by individual and institutional customers of all kinds of collectibles and artwork and certain commodities on our leading
online platforms owned by our subsidiaries in Hong Kong, namely the China International Assets and Equity of Artworks Exchange Limited
and HKDAEx Limited. We commenced our operations in March 2018 and our customer trading volume has been growing rapidly since then. We
also provide online and offline integrated marketing, storage and technical maintenance services to our customers in China.
According to the report of "E-commerce in
China 2021" released by Ministry of Commerce of People's Republic of China on November 16, 2022, China's e-commerce
continued to grow in 2021. Data of National Bureau of Statistics of China indicates that in 2021, the national e-commerce transaction
volume reached RMB 42.3 trillion (approximately $6.13 trillion, based on the central parity rate of March 15, 2023), an increase of 19.6%
year-on-year.
On many mainstream e-commerce platforms, cultural
products such as arts and crafts flourished and developed rapidly, and art and collectibles e-commerce are gradually growing. Online trading
has become a major trend of the global art and collectibles trade. As a comprehensive service provider with extensive cultural and art
collection and collectibles market operations and marketing experience, we seize current development opportunities to provide online and
offline services for the domestic and international art and collectibles trading business. We plan to build a complete art and collectibles
business e-commerce service chain to serve the industry.
We provide customers of our online platform with
comprehensive services, including account opening, art investment education, market information, research, real-time customer support,
and artwork and collectibles warehousing services. Most services are delivered online through our proprietary client software and call
center. Our client software provides not only market information and analysis, but also interactive functions including live discussion
boards and instant messaging with customer service representatives, which we believe enhances our customers' engagement. Internally,
we legally collect and analyze customer behavior and communications data from our client software, customer relationship management system
and the exchanges, which allow us to better understand, attract and serve our customers.
We provide industry solutions and related software
products, system development and technical support services for our e-commerce platform customers.
We strive to minimize conflicts of interest with
our customers, which we believe is essential for our long-term success. Under the trading rules of the two trading platforms we operate
on, we do not set, quote or influence the trading prices, and cannot access our customers' money.
Our Services
We provide customers of our online platform with
comprehensive services, including the following:
Investor Education
We believe that investor education is critical
in preparing potential customers for online collectibles and artwork trading. We have developed a set of educational programs designed
to target customers with a variety of experience levels and investment preferences. Our education programs include basic rules and processes
of online collectibles and artwork trading, fundamental analysis methods and technical analysis methods. Most of our educational resources
are easily accessible through PC and APP versions of our client software. Certain materials are also available on our websites.
45
Market Information
We provide comprehensive market information to
our customers, including real-time price quotes, technical indicators, relevant market news and macroeconomic data and news. Market information
is accessible by our customers and potential customers through PC and APP versions of our client software and our website.
Customer Support
We are committed to providing high-quality customer
support. Most of our services, including investor education, market information and research support services, are accessible through
our client software, which we believe provides a positive experience for our customers due to its user-friendliness and easy access. Besides
our client software, we have a dedicated team of customer service personnel that handles real-time customer inquiries about our software,
market news and research reports, and other questions, via call, text message and online instant message.
We request that all our customer representatives
conduct customer communications via our communication system that is closely monitored by us.
In addition, we receive customer complaints from
time to time. To ensure that reasonable complaints made by each customer are adequately addressed and for risk management purposes, we
have established a customer complaint department at our customer service center. For a complaint received, our customer compliant officer
will first confirm details of the complaint with the customer and then verify the facts with the relevant department. Based on our verification
results and our internal policy, we seek to resolve complaints through discussions with the customer. The complaint and our response are
recorded in the CRM system, and feedback is also provided to relevant departments. We also report complaints to the compliance department,
which will check for noncompliance and advise the relevant department to take rectification measures, if necessary.
Technology Infrastructure
The client software and the CRM system comprise
our core technology infrastructure and enable us to move each key phase of our business operation online.
Our Trading Platforms
Our proprietary platform is an all-electronic
trading system, consisting of host computers, client-side terminals and related communication system. Our trading system supports the
trading and payment/settlement of collectibles, artworks and commodities. It is an electronic platform developed by a third-party software
development company and customized for us, primarily consisting of a matching system, a transaction monitoring system, an account managing
system and a settlement system.
Matching is a core function of our trading platforms.
Our system concludes transactions by matching all of the transactions submitted by the traders. The transaction monitoring system is responsible
for monitoring the daily transactions in real-time to ensure fairness and accuracy in our trading platforms. The settlement system verifies
and reconciles daily statistical data with the banks' transaction system, and completes the registration and settlement (or payment)
of collectibles or artwork units once the transaction data is verified.
Through our trading platform, we provide customers
with timely and comprehensive market information, investor education programs, simulated trading, research reports, quantitative analysis
tools and interactive customer support functions.
Our website www.ocgroup.hk is an essential part
of our trading platforms.
The website is important as it is the gateway
to our trading platforms. It publishes our membership and trading rules, trading information disclosure, and product introductions, and
provides services to traders, such as account management. Traders may open, close and manage their accounts with us on our website. A
client-end terminal may be downloaded from our website. Through the terminal, traders may access their account with us and conduct transactions
in collectibles or artwork units, such as purchasing and selling and submitting inquiries. Data transmission between the traders and our
trading system is encrypted to prevent data leaks.
46
Our trading system hardware platform, clearing
system hardware platform and disaster recovery system are hosted on Ali Cloud. The real-time data synchronization functionality which
we provide ensures the safety of transaction data.
We provide industry solutions and related software
products, system development and technical support services for our cooperation e-commerce platform customers.
Offering and trading of collectibles, artwork
and commodities on our platform
Offering and trading of collectibles, artwork
and commodities on our platform involves a number of parties, namely, Original Owners, Offering Agents, and Traders.
●
An Original Owner is the original
owner of the collectible, artwork or commodity to be offered and traded on our platform. The Original Owner must have good and marketable
title to the collectible or artwork and have the right to dispose of the collectible or artwork.
●
An Offering Agent is an entity
that is experienced with collectibles, artwork or commodity or their investment and has a good reputation. The Offering Agent is engaged
by the Original Owner to assist him or her with the offering and trading of collectibles, artwork or commodity, such as preparation of
listing applications and assigning an investment value, research, organizing promotions and marketing activities, communicating with
potential investors, and similar functions. In general, Kashi Longrui will carry out this business.
●
A Trader is anyone who is 18
years or older or any entity that maintains a trading account with us through our electronic trading platform and participates in the
trading of collectibles, artwork or commodity. Once a Trader acquires one or more units of collectibles and artwork, the Trader becomes
the owner of that collectible and artwork.
Additional parties such as insurer, appraisal
firm and custodian for collectibles or artwork may be retained in connection with the offering and trading of collectibles or artwork
on our system.
The Original Owner and the Offering Agent are
required to comply with our rules in connection with the offering of collectibles, artwork or commodity. If we discover any violation,
we will require that they take corrective actions. If the Offering Agent engages in fraudulent activities, such as putting out false or
misleading advertisements or disclosure on the collectible, artwork or commodity, it may be barred from participating in any offering
for up to two years, in addition to any legal liabilities.
47
For the main signer to apply for the listing, the process is as follows:
For publicly list collectibles and artworks hosted
on our platforms:
48
We strive to minimize conflicts of interest with our customers, which
we believe is essential for our long-term success. Under the trading rules of the two exchanges on which we operate, we do not set, quote
or influence the trading prices, and cannot access our customers' money.
Main Trading Rules for Individual Customers
Traders log in to their own account through the
customer platform for trading. The transaction application shall be deemed to be the transaction commission submitted by the dealer to
the online platform. Once the transaction is completed, the ownership of the corresponding physical object will belong to the purchaser
of the transaction. For the completion of physical delivery for the items, the physical holder can apply for delivery or voluntarily deposit
the collectibles, artwork or commodity in a cooperative third-party storage company. The applicant for the transaction must fulfill the
corresponding obligations and settle with the other party in accordance with the method determined by these rules.
We monitor and regulate the conduct of traders
on a daily basis through our real-time monitoring system. If there are irregular trading activities that may affect the trading price
and volume of collectible, artwork units or commodities, we will seek clarification from the trader(s) by sending inquiries and notices,
conducting interviews, and the like. If there is any violation of our trading rules, we may take the following action:
●
issue oral or written warnings;
●
request that the trader submit
a written commitment;
●
issue a reprimand;
●
impose a fine;
●
suspend or limit trading activities;
or
●
revoke the qualifications of
the trader.
The exchanges have not adopted any deposit-based
leveraged trading system. Customers can only use the funds as they are deposited.
Sales and Marketing
Our marketing activities include promoting our
brand to increase recognition, attracting new customers through targeted marketing and promoting our client software, which has a broader
reach of users who might become our potential customers.
We are currently marketing our electronic trading platform through
participation in culture and art exhibitions and internet advertising, both through online and traditional marketing channels. Although
the in-person meetings and culture and art exhibitions were suspended in China during the outbreak of COVID-19 during the first half of
2020. In addition,
travel restrictions, quarantine requirements and/or temporary closure of office
buildings and facilities were imposed by local governments due to the outbreak of Omicron variant in Hong Kong and many cities in China,
including Shenzhen, Xi'an, Shanghai, Guangzhou, Nanjing, Nanchang and Taiyuan in 2022.
In early December 2022, Chinese government
eased the strict control measure for COVID-19, which has led to surge in increased infections and disruption in our business operations
in December 2022 and January 2023 and our marketing activities have been negatively impacted in the cities that governments have imposed
such restrictions.
Our online marketing relies mainly on search engine
marketing and displaying advertisements on portal websites. We also actively promote our client software through mobile application stores.
In addition, we promote our brand and software through our corporate pages on popular interactive social media such as Weibo and WeChat.
We promote our brands through other traditional
media channels such as by placing advertisements in newspapers and magazines.
We focus on investing in cost-effective marketing
initiatives and continuously evaluate the effectiveness of various marketing channels to optimize the allocation of our marketing spending.
49
Interested persons who provide their contact information
to us become our potential customers. We also promote our client software through various websites and app stores. A guest version of
our software is free to download and use. Through simple online registration, people get free access to the user version of our client
software and become our potential customers. We do not conduct cold calls. Additionally, we encourage existing traders to introduce new
traders.
Our customer representatives interact with potential
customers regarding online collectibles, artwork and commodity trading, our client software and services through call, text message and
instant messaging function in our client software. Our representatives begin building relationships with our customers in anticipation
that they will open trading accounts with us.
A potential customer who opens and activates a
trading account with us becomes our customer. We provide more services to customers compared to potential customers, including free usage
of the customer version of the client software which has richer features, as well as access to more comprehensive research reports and
technical analysis tools.
Our Customers
Our
customers are the Traders and Original Owners. Because we have listed only 31 types
of
collectibles, artwork and commodities in 2022 and we are constantly marketing and increasing our customer base, it is difficult to ascertain
if the loss of a single customer, or a few customers, would have a material adverse effect on us. No one customer constitutes in the
aggregate 10% or more of our consolidated revenue.
Customers can open trading accounts through the
online account creation link on our official websites, International Exchange and HKDAEx. Before the customer can finish opening an account,
our websites provide Risks and Warnings, a Market Entry Agreement and Transaction Rules for the customer to review and confirm before
they are able to move to the next steps. Our transaction rules specifies the qualification requirements for the customer to open and activate
a trading account, as follows:
A trader is a person who
opens a trading account with the exchange platform and participates in the trades of cultural and art collections.
Trader's Qualification
(a) Natural person. A natural
person who trades cultural and art collections and commodities on the exchange platform must provide account opening information (a personal
information form, a copy of passport or ID card from mainland China, Hong Kong, Macao or Taiwan) and meet the following requirements:
1)
Meet the legal age requirement
in the jurisdiction where he/she is located, and have the ability and capacity to take full civil responsibility and assume liability;
2)
Have certain knowledge of the
cultural and art collection investment market, and have certain investment experience in the cultural and art collection market;
3)
Have a deep understanding of
the trading model and investment risk of the cultural and art collections with the exchange's trading platform, and have strong
risk identification ability and risk tolerance;
4)
Have certain internet and computer
operation capabilities, abide by relevant laws and regulations, and engage in cultural and art collection trading activities according
to relevant laws and regulations; and
5)
Other conditions as stipulated
by the exchange.
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(b) Institutions. Institutions
that conduct cultural and art collection and commodities trading must provide various supporting materials (original and photocopy of
corporate legal personhood certificate, business license, organization code certificate, tax registration certificate, etc.) and meet
the following requirements:
1)
Must be an enterprise, legal
entity or other organization that lawfully operates under laws at home and abroad, and no law, regulatory requirement, or the rules of
this exchange platform may prohibit or restrict the investment of such entity;
2)
Have a deep understanding of
the trading model and investment risk of the cultural and art collections with the exchange's trading platform, and have strong
risk identification ability and risk tolerance; and
3)
Understand the risks of investing
in the cultural and art collections, and have completed the internal approval and authorization procedures stipulated by the statutes
and / or company charter/bylaws.
A potential customer is required to read these
rules, and click to confirm that he/she has read such rules before he/she can proceed to the next step of opening an account.
Our customer service staff will review each application
and all materials submitted to ensure they are complete. Once an application is approved by the customer service manager, the customer
will receive notification and obtain a trading account number and initial login password, which are automatically generated by our system.
After completion of the account opening process,
a customer can link his or her personal bank account to his or her trading deposit account, which is an independent depository account
under his/her trading account. We cannot access our customers' money, but we can monitor their trading activities and account balances
in real time through the exchange's information system. Customers can freely withdraw funds from their accounts so long as the minimum
deposit requirements for their trading positions are met. After a trading account is activated, it becomes a "tradable" account
and will remain tradable until the account is closed. We define "active" accounts as tradable accounts that have executed
at least one trade during a relevant period.
We believe that the growth of tradable accounts
and active accounts, combined with our strategy to focus on premier customers, has historically contributed to the significant growth
of our trading volume.
Competition
The
art e-commerce market is highly competitive and many traditional art galleries and auction houses may provide a platform for collectibles
or artwork owners to sell their collections. However, their trading model is substantially different from ours. As of December 31, 2022,
there were over 10 active art e-commerce platforms operating nationwide in China. The trading service providers compete with
each
other for customers and trading volume based on factors including brand, technology, research and customer services.
Intellectual Property
We regard our trademarks, domain names, know-how,
proprietary technologies and similar intellectual property as critical to our success, and we rely on trademark law, trade secret law
and confidentiality and invention assignment agreements with our employees and others to protect our proprietary rights.
We have one registered trademark in China that
we acquired from a third party. This trademark is a graphic trademark with registration No. 5120703. We submitted the transfer documents
to the Trademark Office of the State Administration for Industry and Commerce of the PRC on January 29, 2019, and the transfer of ownership
to us was completed on July 6, 2019.
We have one software copyright registration and
own 6 domain names. The software copyright name is "Entrusted Warehouse Management System V1.0." which has been upgraded in
2021. We also own the software for our app which has not been registered with Copyright Protection Center of China.
Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy or otherwise obtain and use our intellectual property. Monitoring unauthorized use of
our intellectual property is difficult and costly, and we cannot be certain that the steps we have taken will prevent misappropriation
of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which
could result in substantial costs and diversion of our resources.
51
In addition, third parties may initiate litigation
against us alleging infringement of their proprietary rights or declaring their non-infringement of our intellectual property rights.
In the event of a successful claim of infringement and our failure or inability to develop non-infringing technology or license the infringed
or similar technology on a timely basis, our business could be harmed. Moreover, even if we are able to license the infringed or similar
technology, license fees could be substantial and may adversely affect our results of operations.
See "
Risk Factors—Risks Related
to Our Business—We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business
and competitive position
." and
"—We may be subject to intellectual property infringement claims, which may be
expensive to defend and may disrupt our business and operations.
"
Regulations
This section sets forth a summary of the most
significant rules and regulations that affect our business activities in China and Hong Kong.
PRC Regulations
PRC Laws and Regulations relating to Foreign Investment
The PRC Foreign Investment Law
On March 15, 2019, the National People's
Congress approved the Foreign Investment Law, which has taken effect on January 1, 2020 and replaced three existing laws on foreign
investments in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise
Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign
Investment Law embodies a regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international
practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic invested enterprises in China.
The Foreign Investment Law establishes the basic framework for the access to, and the promotion, protection and administration
of foreign investments in view of investment protection and fair competition.
According to the Foreign Investment Law,
"foreign investment" refers to investment activities directly or indirectly conducted by one or more natural persons, business
entities, or otherwise organizations of a foreign country (collectively referred to as "foreign investor") within China, and
the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors,
establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets,
or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other
investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative regulations,
or the State Council.
According to the Foreign Investment Law,
the State Council will publish or approve to publish a catalogue for special administrative measures, or the "Negative List."
The Foreign Investment Law grants national treatment to foreign invested entities, except for those foreign invested entities
that operate in industries deemed to be either "restricted" or "prohibited" in the "Negative List".
However, it is unclear whether any updated "Negative List" to be published by the State Council in the future will be different
from the current Special Administrative Measures for Market Access of Foreign Investment (Negative List) promulgated by the NDRC
and the MOFCOM on December 27, 2021. The Foreign Investment Law provides that foreign invested entities operating in foreign
restricted or prohibited industries will require market entry clearance and other approvals from relevant PRC governmental authorities.
Furthermore, the Foreign Investment Law provides
that foreign invested enterprises established according to the existing laws regulating foreign investment may maintain their structure
and corporate governance within five years after the implementing of the Foreign Investment Law.
In addition, the Foreign Investment Law also
provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that
local governments shall abide by their commitments to the foreign investors; foreign-invested enterprises are allowed to issue stocks
and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation
shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; mandatory technology
transfer is prohibited; and the capital contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual
property rights, indemnity or compensation legally obtained, or proceeds received upon settlement by foreign investors within China, may
be freely remitted inward and outward in RMB or a foreign currency. Also, foreign investors or the foreign investment enterprise should
be imposed legal liabilities for failing to report investment information in accordance with the requirements.
52
Regulations on Overseas Listings
On February 17, 2023, the CSRC released the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the "New Overseas Listing Rules")
with five interpretive guidelines, which will take effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises
to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an
issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities
offering after having been listed on an overseas market; c) a domestic company seeking an overseas direct or indirect listing of its assets
through single or multiple acquisition(s), share swap, transfer of shares or other means. According to the Notice on Arrangements for
Overseas Securities Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already
completed overseas listing or (ii) has already obtained the approval for the offering or listing from overseas securities regulators or
exchanges but has not completed such offering or listing before effective date of the new rules and completes such offering or listing
before September 30, 2023 will be considered as an existing listed company and is not required to make any filing until it conducts a
new offering in the future. Furthermore, upon the occurrence of any of the material events specified below after an issuer has completed
its offering and listed its securities on an overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working
days after the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas
securities regulatory agencies or other competent authorities; (iii) change of listing status or transfer of listing segment; or (iv)
voluntary or mandatory delisting.
Negative List Relating to Foreign Investment
Investment activities in the PRC by foreign investors
are principally governed by the Guidance Catalog of Industries for Foreign Investment promulgated and as amended from time to time by
MOFCOM and National Development and Reform Commission (the "NDRC") and MOFCOM. The NDRC and the MOFCOM promulgated the Special
Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition) (the "2021 National Negative List") and
the Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2021 Edition) (the "2021
FTZ Negative List") (collectively the "2021 Negative Lists") on December 27, 2021, which took effect on January 1, 2022.
Industries listed in the 2021 Negative Lists are divided into two categories: restricted and prohibited. Industries not listed in the
2021 Negative Lists are generally deemed as constituting a third "permitted" category.  Establishment of wholly foreign-owned
enterprises is generally allowed in permitted industries. Some restricted industries are limited to equity or contractual joint ventures,
while in some cases Chinese partners are required to hold the majority interests in such joint ventures. In addition, restricted category
projects are subject to higher-level government approvals. Foreign investors are not allowed to invest in industries in the prohibited
category. Industries not listed in the Negative List are generally open to foreign investment unless specifically restricted by other
PRC regulations.
Though the business we conduct through the variable
interest entity is not within the category in which foreign investment is currently restricted or prohibited under the Negative List or
other PRC Laws, we expect that in the future Jiangsu Yanggu will engage in marketing survey services for online marketplaces. Marketing
survey services are within the category in which foreign investment is restricted pursuant to the Negative List. In addition, we intend
to centralize our management and operation in the PRC to avoid being restricted from conducting certain business activities which are
important for our current or future business but are currently restricted or might be restricted in the future. As such, we believe the
VIE agreements between the WFOE and the variable interest entity are necessary and essential for our business operations without the equity
ownership of VIE. These contractual arrangements with the variable interest entity and its shareholders enable us to exercise effective
control over the variable interest entity and hence consolidate their financial results as the VIE without being deemed as a foreign invested
company.
PRC Laws and Regulations relating to Wholly Foreign-owned Enterprises
The establishment, operation and management of
corporate entities in China are governed by the PRC Company Law, which was promulgated by the Standing Committee of the National People's
Congress on December 29, 1993 and became effective on July 1, 1994. It was last amended on October 26, 2018 and the amendments became
effective on the same day. Under the PRC Company Law, companies are generally classified into two categories, namely, limited liability
companies and joint stock limited companies. The PRC Company Law also applies to limited liability companies and joint stock limited companies
with foreign investors. Where there are otherwise different provisions in any law on foreign investment, such provisions shall prevail.
The Law of the PRC on Wholly Foreign-invested Enterprises was promulgated and became effective on April 12, 1986, and was last amended
and became effective on October 1, 2016. The Implementing Regulations of the PRC Law on Foreign-invested Enterprises were promulgated
by the State Council on October 28, 1990. They were last amended on February 19, 2014 and the amendments became effective on March 1,
2014. The Provisional Measures on Administration of Filing for Establishment and Change of Foreign Investment Enterprises were promulgated
by MOFCOM and became effective on October 8, 2016, and were last amended on July 20, 2017 with immediate effect. The above-mentioned laws
formed the legal framework for the PRC Government to regulate the WFOEs. These laws and regulations governed the establishment, modification,
including changes to registered capital, shareholders, corporate form, merger and split, dissolution and termination of the WFOEs before
January 1, 2020. On January 1, 2020, the Law of the PRC on Wholly Foreign-invested Enterprises and the Implementing Regulations of the
PRC Law on Foreign-invested Enterprises were abolished by the Foreign Investment Law and its implementing rules, the Provisional Measures
on Administration of Filing for Establishment and Change of Foreign Investment Enterprises was replaced by the Measures of Foreign Investment
Information Report promulgated by MOFCOM on December 30, 2019 (effective as of January 1, 2020).
According to the above regulations, a WFOE should
get approval by or filed with MOFCOM before its establishment and operation. Nanjing Rongke Business Consulting Service Co., Ltd. is a
WFOE since established, and has filed with the local administration of MOFCOM. Its establishment and operation are in compliance with
the above-mentioned laws.
53
PRC Laws and Regulations Related to Art Trading and Related Service
Industry
PRC Law relating to Property Rights
The Civil Code of the People's Republic
of China ("Civil Code") was released on May 28, 2020 and became effective on January 1, 2021, which has replaced Property
Right Law of China. According to The Civil Code, the creation and transfer of property rights in movable property shall be effective upon
delivery. But if the parties have agreed that the transferor may continue to take possession of the property, the property right shall
be effective when the agreement takes effect. According to our Trading Rules, the owner of collectibles or artworks shall entrust our
cooperative warehousing company to hold and transport the collectibles or artworks sold on our platform. In practice, the winning bidder
will receive delivery of the order on our platform after bid closing, and can collect the collectibles or artwork at the cooperative warehousing
company by showing the delivery order. The delivery order is treated as the agreement between the owner of the collectibles or artwork
and the bid winner to transfer the property rights in the collectibles or artwork. Accordingly, upon the winning bidder's receipt
of the delivery order, the winning bidder owns the property rights of the collectibles or artworks purchased on our platform.
PRC Laws and Regulations relating to Trading
Exchange
According to "Decision Of The State Council
On Cleaning Up And Rectifying Various Trading Places And Taking Effective Precautions Against Financial Risks" ("Decision
No. 38") promulgated by the State Council of the PRC on November 11, 2011 and effective on the same day, and "Opinions Of
The General Office Of The State Council On The Implementation Of The Clean-Up And Rectification Of Various Trading Venues" ("Opinion
No. 37") promulgated by the General Office of the State Council of the PRC on July 12, 2012 and effective on the same day, any trading
places and their branches that violate any of the following provisions shall be cleaned up and rectified. Such parties must not
(1)
Divide any equity into equal
shares for public offering. An "equal share public offering" is when a trading place uses its services and facilities to
divide its equity into equal shares and sell them to investors. The relevant provisions of the company law and the securities law shall
apply to the public issuance of shares by a joint stock company.
(2)
Adopt centralized trading. The
"centralized trading methods" referred to in this opinion include collective bidding, continuous bidding, electronic matching,
anonymous trading, market makers and other trading methods, except for agreement transfers and legal auctions.
(3)
Continuously list and trade
the rights and interests in accordance with standardized trading units. The "standardized trading unit" referred to in this
opinion refers to the minimum trading unit set for other equities other than equity, and trading at the minimum trading unit or integer
multiples thereof. "Continuous listing transaction" refers to listing and selling the same trading variety within 5 trading
days after buying or listing, and buying the same trading variety within 5 trading days after selling.
54
(4)
Have a cumulative number of
equity holders exceeding 200. Except as otherwise provided for by laws and administrative regulations, the cumulative number of actual
holders of any equity shall not exceed 200 during the term of the company's existence, no matter by the way of issuance or transfer.
(5)
Carry out standardized contract
trading by centralized trading. The "standardized contract" referred to in this opinion includes two situations: one is a
unified contract established by the trading place with fixed terms other than price, which stipulates the delivery of a certain amount
of the subject matter at a certain time and place in the future. The other is a contract made by the exchange that gives the buyer the
right to buy or sell the agreed subject matter at a specified price at a certain time in the future.
(6)
Without the approval of the
relevant financial administrative department of the state council, establish either trading places for the trading of financial products
such as insurance, credit and gold, or use any other existing trading places for the trading of financial products such as insurance,
credit and gold.
Additionally, according to "Notice Concerning
The Issuance Of Minutes Of The Special Session On The Clean-Up And Rectification Of Stamp And Commemorative Coins Trading Places"
promulgated by the Office of the Joint Meeting on August 2, 2017, any stamps, coins and magcards using a stock issuance-like model to
trading places mainly trading stamps by a concentrated bidding and "T+0" transaction method should cease to operate. The stamps,
coins and magcards being illegally traded must be made off-line in time. Trading places which have ceased operations shall not re-start
operating unless they obtain approval from the provincial government and complete the required filing with the Joint Meeting. Provincial
governments should re-evaluate the necessity of transactions of stamps, coins and magcards, considering the development and interests
of the economic society, as well as risks, efficiencies and costs. Provided that a provincial government does considers it necessary to
maintain transactions of stamps, coins and magcards, the provincial government may appoint a stamps, coins and magcards exchange to organize
stamps, coins and magcards transactions by way of transfer of property through agreements. Such exchange must have obtained permission
from the provincial government, passed the examination and acceptance check of the provincial government and completed filings at relevant
joint meetings. In addition, such exchange must be in strict compliance with Decision No.38 and Opinion No.37, shall not adopt or allow
concentrated bidding or other types of centralized trading, and the interval between sale and purchase of a same commodity shall not be
less than 5 trading days.
Measures Of Jiangsu Province on The Supervision
and Administration of Trading Exchanges ("Jiangsu Trading Exchange Measures") were issued by the Jiangsu Financial Supervision
Bureau on March 1, 2023. According to Jiangsu Trading Exchange Measures, trading exchanges that are established in the administrative
region of the Jiangsu province with its name contains the words "exchange" or "trading center" engaging in equity
or commodity trading, excluding vehicles and real estate trading places and trading exchanges of financial products approved by the financial
management department of the State Council are subject to this Jiangsu Trading Exchange Measures and shall obtain prior approval. The
branch offices of the trading exchanges from other provinces are subject to these measures as well. The subsidiaries of the VIE in China
do not use any name of trading center or trading exchange and they only provide maintenance, supporting and warehouse services to the
trading platforms in Hong Kong.
Additionally, there is a Notice On Further Strengthening
The Supervision Of All Kinds Of Trading Places In The Province, released by Jiangsu Financial Office on July 25, 2016, according to which,
the "accredited investor" in any trading place should meet the following criteria and provide assets proof when opening an
account:
(1)
The investor's available
fund balance at the time of opening an escrow account shall not be less than RMB 500,000 (approximately $70,000); and
(2)
The market value of the investor's
assets shall not be less than RMB 2 million (approximately $290,000).
Also, all of the trading places in Jiangsu must
use Jiangsu Exchange Depository and Clearing Co., Ltd. ("JS Clearing") to register investors and investment information and
settle investors' funds.
55
Regulations on Intellectual Property Rights
The PRC has adopted comprehensive legislation
governing intellectual property rights, including copyrights, patents, trademarks and domain names.
Copyrights.
The Copyright Law was adopted
in 1990 and amended in 2001, 2010 and 2020. The amended version in 2020 came into effect on June 1, 2021. The amended Copyright Law extends
copyright protection to internet activities, products disseminated over the internet and software products. In addition, there is a voluntary
registration system administered by the China Copyright Protection Center. The amended Copyright Law also requires registration of a copyright
pledge. According to the Copyright Law, an infringer will be subject to various civil liabilities, which include stopping the infringement,
eliminating the damages, apologizing to the copyright owners and compensating the losses of copyright owners. The Copyright Law further
provides that the infringer must compensate the actual loss suffered by the copyright owner. If the actual loss of the copyright owner
is difficult to calculate, the illegal income received by the infringer as a result of the infringement will be deemed as the actual loss
or if such illegal income is also difficult to calculate, the court can decide the amount of the actual loss up to RMB5,000,000. Under
the Copyright Law, the term of protection for copyrighted software of legal persons is 50 years and ends on December 31 of the 50
th
year from the date of first publishing of the software.
Patents.
The Patent Law of the PRC promulgated
in December 2008, which became effective in October 2009 and was recently amended by the Standing Committee of the National People's
Congress of China on October 17, 2020 and became effective on June 1, 2021, provides for patentable inventions, utility models and designs.
An invention or utility model for which patents may be granted shall have novelty, creativity and practical applicability. The State Intellectual
Property Office under the State Council is responsible for examining and approving patent applications. The protection period is 20 years
for inventions and 10 years for utility models and designs, all of which commence from the date of application of patent rights. The protection
period has been slightly amended in recent amendment which became effective on June 1, 2021. The terms of protection for invention and
utility patents will still be 20 years and 10 years, respectively, in general. The term of protection for a design patent will be extended
from 10 years to 15 years. In addition, for invention patents, in situations where a patent is only granted after 4 years or more from
its filing date or 3 years or more after a request for substantive examination date, the applicant can request for an extension of protection
term for any unreasonable delay.
Trademarks
. The Trademark Law of the PRC
promulgated in August 2013 which took effect in May 2014 (the "Trademark Law") and was last amended on April 23, 2019 which
became effective on November 11, 2019. Its implementation rules protect registered trademarks. The Trademark Office of National Intellectual
Property Administration, PRC, formerly the PRC Trademark Office of the State Administration of Market Regulation is responsible for the
registration and administration of trademarks throughout the PRC. The Trademark Law has adopted a "first-to-file" principle
with respect to trademark registration. The validity period of registered trademarks is 10 years from the date of approval of trademark
application, and may be renewed for another 10 years provided relevant application procedures have been completed within 12 months before
the end of the validity period.
Domain Names
. Domain names are protected
under the Administrative Measures for the Internet Domain Names of the PRC promulgated by the Ministry of Industry and Information Technology
of the PRC effective on December 20, 2004 and the Administrative Measures for Internet Domain Names promulgated by MIIT, effective on
November 1, 2017 (the "Domain Name Measures"). MIIT is the major regulatory body responsible for the administration of the
PRC internet domain names. The Domain Names Measures has adopted a "first-to-file" principle with respect to the registration
of domain names.
PRC Laws and Regulations Relating to Mergers and Acquisitions
The Regulations on Mergers and Acquisitions of
Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in August 2006 and amended in 2009,
requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled
by PRC companies or individuals to obtain the approval of the China Securities Regulatory Commission, or the CSRC, prior to the listing
and trading of such special purpose vehicle's securities on an overseas stock exchange. In September 2006, the CSRC published a
notice on its official website specifying documents and materials required to be submitted to it by a special purpose vehicle seeking
CSRC approval of its overseas listings. The application of the M&A Rules remains unclear. Our PRC counsel has advised us based on
their understanding of the current PRC laws, rules and regulations that the CSRC's approval should not be required for the listing
and trading of our ordinary shares on NASDAQ, given that: (i) we established our PRC subsidiary, the WFOE, by means of direct investment
rather than by merger with or acquisition of PRC domestic companies; and (ii) no explicit provision in the M&A Rules classifies the
respective contractual arrangements between the WFOE, Jiangsu Yanggu and its shareholders as a type of acquisition transaction falling
under the M&A Rules.
56
PRC Laws and Regulations Relating to Foreign Exchange
General administration of foreign exchange
The principal regulation governing foreign currency
exchange in the PRC is the
Administrative Regulations of the PRC on Foreign Exchange
(the "Foreign Exchange Regulations"),
which were promulgated on January 29, 1996, became effective on April 1, 1996 and were last amended on August 5, 2008. Under these rules,
Renminbi is generally freely convertible for payments of current account items, such as trade- and service-related foreign exchange transactions
and dividend payments, but not freely convertible for capital account items, such as capital transfer, direct investment, investment in
securities, derivative products or loans unless prior approval by competent authorities for the administration of foreign exchange is
obtained. Under the Foreign Exchange Regulations, foreign-invested enterprises in the PRC may purchase foreign exchange without the approval
of SAFE to pay dividends by providing certain evidentiary documents, including board resolutions, tax certificates, or for trade- and
services-related foreign exchange transactions, by providing commercial documents evidencing such transactions.
Circular No. 75, Circular No. 37 and Circular
No. 13
Circular 37 was released by SAFE on July 4, 2014
and abolished Circular 75 which had been in effect since November 1, 2005. Pursuant to Circular 37, a PRC resident should apply to SAFE
for foreign exchange registration of overseas investments before it makes any capital contribution to a special purpose vehicle, or SPV,
using his or her legitimate domestic or offshore assets or interests. SPVs are offshore enterprises directly established or indirectly
controlled by domestic residents for the purpose of investment and financing by utilizing domestic or offshore assets or interests they
legally hold. Following any significant change in a registered offshore SPV, such as capital increase, reduction, equity transfer or swap,
consolidation or division involving domestic resident individuals, the domestic individuals shall amend the registration with SAFE. Where
an SPV intends to repatriate funds raised after completion of offshore financing to the PRC, it shall comply with relevant PRC regulations
on foreign investment and foreign debt management. A foreign-invested enterprise established through return investment shall complete
relevant foreign exchange registration formalities in accordance with the prevailing foreign exchange administration regulations on foreign
direct investment and truthfully disclose information on the actual controller of its shareholders.
If any shareholder who is a PRC resident (as determined
by the Circular No. 37) holds any interest in an offshore SPV and fails to fulfil the required foreign exchange registration with the
local SAFE branches, the PRC subsidiaries of that offshore SPV may be prohibited from distributing their profits and dividends to their
offshore parent company or from carrying out other subsequent cross-border foreign exchange activities. The offshore SPV may also be restricted
in its ability to contribute additional capital to its PRC subsidiaries. Where a domestic resident fails to complete relevant foreign
exchange registration as required, fails to truthfully disclose information on the actual controller of the enterprise involved in the
return investment or otherwise makes false statements, the foreign exchange control authority may order them to take remedial actions,
issue a warning, and impose a fine of less than RMB 300,000 (approximately $43,000) on an institution or less than RMB 50,000 (approximately
$7,000) on an individual.
Circular 13 was issued by SAFE on February 13,
2015, and became effective on June 1, 2015. Pursuant to Circular 13, a domestic resident who makes a capital contribution to an SPV using
his or her legitimate domestic or offshore assets or interests is no longer required to apply to SAFE for foreign exchange registration
of his or her overseas investments. Instead, he or she shall register with a bank in the place where the assets or interests of the domestic
enterprise in which he or she has interests are located if the domestic resident individually seeks to make a capital contribution to
the SPV using his or her legitimate domestic assets or interests; or he or she shall register with a local bank at his or her permanent
residence if the domestic resident individually seeks to make a capital contribution to the SPV using his or her legitimate offshore assets
or interests.
As of the date of this report, the individual
shareholders of Jiangsu Yanggu known as Chinese citizens, who also owned our shares, have completed registrations in accordance with Circular
37.
57
Circular 19 and Circular 16
Circular 19 was promulgated by SAFE on March 30,
2015, and became effective on June 1, 2015. According to Circular 19, foreign exchange capital of foreign-invested enterprises shall be
granted the benefits of Discretional Foreign Exchange Settlement ("Discretional Foreign Exchange Settlement"). With Discretional
Foreign Exchange Settlement, foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and
interests of monetary contribution has been confirmed by the local foreign exchange bureau, or for which book entry registration of monetary
contribution has been completed by the bank, can be settled at the bank based on the actual operational needs of the foreign-invested
enterprise. The allowed Discretional Foreign Exchange Settlement percentage of the foreign exchange capital of a foreign-invested enterprise
has been temporarily set to be 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated account and
if a foreign-invested enterprise needs to make any further payment from such account, it will still need to provide supporting documents
and to complete the review process with its bank. Furthermore, Circular 19 stipulates that foreign-invested enterprises shall make bona
fide use of their capital for their own needs within their business scopes. The capital of a foreign-invested enterprise and the Renminbi
if obtained from foreign exchange settlement shall not be used for the following purposes:
●
directly or indirectly used
for expenses beyond its business scope or prohibited by relevant laws or regulations;
●
directly or indirectly used
for investment in securities unless otherwise provided by relevant laws or regulations;
●
directly or indirectly used
for entrusted loan in Renminbi (unless within its permitted scope of business), repayment of inter-company loans (including advances
by a third party) or repayment of bank loans in Renminbi that have been sub-lent to a third party; and
●
directly or indirectly used
for expenses related to the purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises).
Circular 16 was issued by SAFE on June 9, 2016.
Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to Renminbi on a
self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange capital items (including but
not limited to foreign currency capital and foreign debts) on a self-discretionary basis applicable to all enterprises registered in the
PRC. Circular 16 reiterates the principle that an enterprise's Renminbi converted from foreign currency denominated capital may
not be directly or indirectly used for purposes beyond its business scope or purposes prohibited by PRC laws or regulations, and such
converted Renminbi shall not be provided as loans to nonaffiliated entities.
Circulars 16 and 19 address foreign direct investments
into the PRC, and stipulate the procedures applicable to foreign exchange settlement. If and when proceeds in foreign currency raised
in any offering are settled to RMB, our WFOE would be subject to Circular 19 or Circular 16.
Dividend distribution
The Foreign Investment Law, promulgated in March
15, 2019 and became effective on January 1, 2020, and the Implementation Regulations for the Foreign Investment Law, promulgated in December
26, 2019 and became effective on January 1, 2020, are the key regulations governing distribution of dividends of foreign-invested enterprises.
According to these regulations, a wholly foreign-owned
enterprise in China, or a WFOE, may pay dividends only out of its accumulated profits, if any, determined in accordance with PRC accounting
standards and regulations. In addition, a WFOE is required to allocate at least 10% of its accumulated after-tax profits each year, if
any, to statutory reserve funds unless its reserves have reached 50% of the registered capital of the enterprises. These reserves are
not distributable as cash dividends. The proportional ratio for withdrawal of rewards and welfare funds for employees shall be determined
at the discretion of the WFOE. Profits of a WFOE shall not be distributed before the losses thereof before the previous accounting years
have been made up. Any undistributed profit for the previous accounting years may be distributed together with the distributable profit
for the current accounting year.
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In the event that a PRC shareholder holding interests
in a special purpose vehicle fails to fulfill the required SAFE registration pursuant to Circular 37 and Circular 13, the PRC subsidiaries
of that special purpose vehicle may be prohibited from making distributions of profit to the offshore parent and from carrying out subsequent
cross-border foreign exchange activities and the special purpose vehicle may be restricted in their ability to contribute additional capital
into its PRC subsidiary. And, failure to comply with the various SAFE registration requirements described above could result in liability
under PRC law for foreign exchange evasion, including (i) up to 30% of the total amount of foreign exchange remitted overseas and
deemed to have been evasive and (ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total
amount of remitted foreign exchange deemed evasive. Furthermore, the persons-in-charge and other persons at our PRC subsidiaries who are
held directly liable for the violations may be subject to criminal sanctions. These regulations apply to our direct and indirect shareholders
who are PRC residents and may apply to any offshore acquisitions and share transfer that we make in the future if our shares are issued
to PRC residents. See "
Risk Factors—Risks Related to Doing Business in China—PRC regulations relating to offshore
investment activities by PRC residents may limit our PRC subsidiary's ability to increase its registered capital or distribute profits
to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.
"
PRC Laws and Regulations relating to Taxation
Enterprise Income Tax
The
Enterprise Income Tax Law of the People's
Republic of China
(the "EIT Law") was promulgated by the Standing Committee of the National People's Congress on
March 16, 2007 and became effective on January 1, 2008, and was most recently amended on December 29, 2018 (also the effective date).
The
Implementation Rules of the EIT Law
(the "Implementation Rules") were promulgated by the State Council on December
6, 2007 and became effective on January 1, 2008. According to the EIT Law and the Implementation Rules, enterprises are divided into resident
enterprises and non-resident enterprises. Resident enterprises shall pay enterprise income tax on their incomes obtained in and outside
the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC shall pay enterprise income tax on the incomes
obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises with no institutions in the PRC, and
non-resident enterprises whose incomes having no substantial connection with their institutions in the PRC, shall pay enterprise income
tax on their incomes obtained in the PRC at a reduced rate of 10%.
The
Arrangement between China Mainland and
Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes
on Income
(the "Arrangement") was promulgated by the State Administration of Taxation ("SAT") on August 21,
2006 and came into effect on December 8, 2006. According to the Arrangement, a company incorporated in Hong Kong will be subject to withholding
tax at the lower rate of 5% on dividends it receives from a company incorporated in the PRC if it holds a 25% interest or more in the
PRC company. The
Notice on the Understanding and Identification of the Beneficial Owners in the Tax Treaty
(the "Notice")
was promulgated by SAT and became effective on October 27, 2009. According to the Notice, a beneficial ownership analysis will be used
based on a substance-over-form principle to determine whether or not to grant tax treaty benefits.
The WFOE, Jiangsu Yanggu and its subsidiaries
are resident enterprises and pay EIT tax at the rate of 25% in PRC. It is more likely than not that the Company and its offshore subsidiary
would be treated as a non-resident enterprise for PRC tax purposes. Please see Section of "
Taxation - People's Republic
of China Enterprise Taxation
".
Value-added Tax and Business Tax
The
Provisional Regulations on Value-Added
Tax of the PRC
(the "VAT Regulations") were promulgated by the State Council on December 13, 1993 and took effect on January
1, 1994, which were last amended on November 19, 2017. The
Rules for the Implementation of the Provisional Regulations on Value Added
Tax of the PRC
(the "Rules") were promulgated by the Ministry of Finance ("MOF") on December 25, 1993 and
were last amended on October 28, 2011. Pursuant to the VAT Regulations and the Rules, entities or individuals in the PRC engaged in the
sale of goods, the provision of processing, repairs and replacement services and the importation of goods are required to pay VAT, on
the value added during the course of the sale of goods or provision of services. Unless otherwise specified, the applicable VAT rate for
the sale or importation of goods and provision of processing, repair and replacing services is 17%. On April 4, 2018, the Ministry
of Finance and the State Administration of Taxation issued the Notice on Adjustment of VAT Rates, which came into effect on May 1,
2018. According to the abovementioned notice, the taxable goods previously subject to VAT rates of 17% and 11%, respectively, become subject
to lower VAT rates of 16% and 10%, respectively, starting from May 1, 2018. Furthermore, according to the Announcement on Relevant
Policies for Deepening Value-added Tax Reform jointly promulgated by the Ministry of Finance, the State Administration of Taxation and
the General Administration of Customs, which became effective on April 1, 2019, the taxable goods previously subject to VAT rates
of 16% and 10%, respectively, become subject to lower VAT rates of 13% and 9%, respectively, starting from April 1, 2019.
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The SAT and the MOF jointly promulgated the
Circular
on Comprehensively Promoting the Pilot Program of the Collection of Valued-added Tax in lieu of Business Tax
on March 23, 2016, which
became effective on 1 May 2016. Pursuant to the pilot plan and relevant notices, VAT is generally imposed in lieu of business tax in certain
service industries, including technology services and advertising services, on a nationwide basis. VAT of a rate of 6% applies to revenue
derived from the provision of certain services. Certain small taxpayers under PRC law are subject to reduced value-added tax at a rate
of 3%. Unlike business tax, a taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output VAT chargeable
on the services provided.
According to the above-regulations, our PRC subsidiary
and consolidated affiliated entities are generally subject to a 6% VAT rate.
Dividend Withholding Tax
The Enterprise Income Tax Law provides that since
January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not
have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is
not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the
PRC.
Pursuant to an
Arrangement Between the Mainland
of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Incomes
("Double Tax Avoidance Arrangement") and other applicable PRC laws, if a Hong Kong resident
enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double
Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives
from a PRC resident enterprise may be reduced to 5%. However, based on the
Circular on Certain Issues with Respect to the Enforcement
of Dividend Provisions in Tax Treaties
(the "SAT Circular 81") issued on February 20, 2009 by SAT, if the relevant PRC
tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement
that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.
According to the
Circular on Several Questions
regarding the "Beneficial Owner" in Tax Treaties
, which was issued on February 3, 2018 by the SAT and took effect on April
1, 2018, when determining the applicant's status of the "beneficial owner" regarding tax treatments in connection with
dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated
to pay more than 50% of his or her income in twelve months to residents in third country or region, whether the business operated by the
applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy
any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed
according to the actual circumstances of the specific cases. This circular further provides that applicants who intend to prove his or
her status of the "beneficial owner" shall submit the relevant documents to the relevant tax bureau according to the
Announcement
on Issuing the Measures for the Administration of Non-Resident Taxpayers' Enjoyment of the Treatment under Tax Agreements.
PRC Laws and Regulations relating to Employment and Social Welfare
Labor Law of the PRC
Pursuant to the Labor Law of the PRC, which was
promulgated by the Standing Committee of the NPC on July 5, 1994 with an effective date of January 1, 1995 and was last amended on December
29, 2018 and the Labor Contract Law of the PRC, which was promulgated on June 29, 2007, became effective on January 1, 2008 and was last
amended on December 28, 2012, with the amendments coming into effect on July 1, 2013, enterprises and institutions shall ensure the safety
and hygiene of a workplace, strictly comply with applicable rules and standards on workplace safety and hygiene in China, and educate
employees on such rules and standards.
Furthermore, employers and employees shall enter
into written employment contracts to establish their employment relationships. Employers are required to inform their employees about
their job responsibilities, working conditions, occupational hazards, remuneration and other matters with which the employees may be concerned.
Employers shall pay remuneration to employees on time and in full accordance with the commitments set forth in their employment contracts
and with the relevant PRC laws and regulations. Jiangsu Yanggu and its subsidiaries have entered into written employment contracts with
all of the employees and performed its obligations required under the relevant PRC laws and regulations.
60
Social Insurance and Housing Fund
Pursuant to the
Social Insurance Law of the
PRC
, which was promulgated by the Standing Committee of the NPC on October 28, 2010 and became effective on July 1, 2011, and was
last amended on December 29, 2018, with the amendments coming into effect on the same day, employers in the PRC shall provide their employees
with welfare schemes covering basic pension insurance, basic medical insurance, unemployment insurance, maternity insurance, and occupational
injury insurance. Without force majeure reasons, employers must not suspend or reduce their payment of social insurance for employees,
otherwise, competent governmental authorities will have the power to enforce employers to pay up social insurance within a prescribed
time limit, and a fine of 0.05% of the unpaid social insurance will be charged on the part of the employers per day commencing from the
first day of default. Provided that the employers still fail to make the payment within the prescribed time limit, a fine of over one
time and up to three times of the unpaid sum of social insurance will be charged.
In accordance with the
Regulations on Management
of Housing Provident Fund
, which were promulgated by the State Council on April 3, 1999 and last amended on March 24, 2019, employers
must register at the designated administrative centers and open bank accounts for depositing employees' housing funds. Employer
and employee are also required to pay and deposit housing funds, with an amount no less than 5% of the monthly average salary of the employee
in the preceding year in full and on time. Employers must not suspend or reduce the payment of house provident funds for their employees.
Under the circumstances where financial difficulties do exist due to which an employer is unable to pay or pay up house provident funds,
permission of labor union of the employer and approval of the local house provident funds commission must first be obtained before the
employer can suspend or reduce their payment of house provident funds. Where an employer does not open accounts of house provident funds
for its employees, the relevant authorities will have the power to demand such employer to do so within a prescribed period, failure of
which can result in a fine of over RMB 10,000 (approximately $1,500) and up to RMB 50,000 (approximately $7,000) charged on the employer.
Moreover, under the cases where competent authorities have given notice to the employer for paying up house provident funds but the employer
still fails to do so, an application for enforcement can be filed to the court in this regard.
PRC Laws and Regulations Related to internet information security
and privacy protection
The PRC Civil Code
On May 28, 2020, the National People's Congress
of the PRC issued the PRC Civil Code, which became effective on January 1, 2021. The PRC Civil Code stipulates that the personal information
of a natural person shall be protected by the law. Any organization or individual shall legally obtain the personal information of others
when necessary and ensure the safety of such personal information, and shall not illegally collect, use, process or transmit the personal
information of others, or illegally buy or sell, provide or make public the personal information of others.
Cybersecurity Law of the PRC
On November 7, 2016, the Standing Committee of
the National People's Congress of the PRC (the "SCNPC") promulgated the Cybersecurity Law of the PRC ("Cybersecurity
Law") which became effective on June 1, 2017. Under this law, network operators must provide cybersecurity protection and protect
the integrity, confidentiality and availability of network data. The Cybersecurity Law also standardizes the collection and usage of personal
information and requires network operators to protect users' privacy security. If a network operator violates the Cybersecurity
Law, it can face various penalties, including but not limited to warning, confiscation of illegal earnings, suspension of related business
for rectification, shutting down its websites, and revocation of its business license or relevant permits, all of which may be imposed
by the relevant authority, along with fines of up to RMB 1 million (approximately $146,000) depending on the severity of the circumstances.
On February 15, 2022, Cybersecurity Review Measures
published by Cyberspace Administration of China or the CAC, National Development and Reform Commission, Ministry of Industry and Information
Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People's Bank of
China, State Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and State Cryptography
Administration became effective, which provides that, Critical Information Infrastructure Operators ("CIIOs") that intend
to purchase internet products and services and Online Platform Operators engaging in data processing activities that affect or may affect
national security shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published
the Administration Measures for Cyber Data Security (Draft for Public Comments), or the "Cyber Data Security Measure (Draft)",
which requires cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity
review with the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and
Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic
company that seeks to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations,
enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives
administration system, and take necessary measures to fulfill confidentiality and archives administration obligations.
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Measures for the Security Assessment of Data
Cross-border Transfer
On July 7, 2022, CAC promulgated the Measures
for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply
for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers
important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information
of over 1 million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas
and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people
to overseas since January 1st of the previous year and ; and (iv) other circumstances under which the data cross-border transfer
security assessment is required as prescribed by the CAC.
Personal Information Protection Law of the PRC
On August 20, 2021, the SCNPC promulgated the
Personal Information Protection Law of the People's Republic of China (the "Personal Information Protection Law"), effective
from November 1, 2021. The Personal Information Protection Law requires, among others, that (i) the processing of personal information
should have a clear and reasonable purpose which should be directly related to the processing purpose, in a method that has the least
impact on personal rights and interests, and (ii) the collection of personal information should be limited to the minimum scope necessary
to achieve the processing purpose to avoid the excessive collection of personal information. Different types of personal information and
personal information processing will be subject to various rules on consent, transfer, and security. Entities handling personal information
bear responsibilities for their personal information handling activities, and shall adopt necessary measures to safeguard the security
of the personal information they handle. Otherwise, the entities handling personal information could be ordered to correct, or suspend
or terminate the provision of services, and face confiscation of illegal income, fines or other penalties.
Hong Kong Regulations
As we provide a trading service business in Hong
Kong, our business operations are subject to various regulations and rules promulgated by the Hong Kong government. The following is a
brief summary of the Hong Kong laws and regulations that currently and materially affect our business. This section does not purport to
be a comprehensive summary of all present and proposed regulations and legislation relating to the industries in which we operate.
Hong Kong Laws and Regulations relating to Protection of Personal
Data
Personal Data (Privacy) Ordinance
(Chapter
486 of the Laws of Hong Kong) ("PDPO"), which came into full effect in Hong Kong in 1996 aims to protect the privacy of individuals
of their personal data. The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles
(the "Data Protection Principles") contained in Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an
act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice, as the case may be, is required
or permitted under the PDPO. The six Data Protection Principles are:
●
Principle 1 — purpose
and manner of collection of personal data;
●
Principle 2 — accuracy
and duration of retention of personal data;
●
Principle 3 — use of personal
data;
62
●
Principle 4 — security
of personal data;
●
Principle 5 — information
to be generally available; and
●
Principle 6 — access to
personal data.
Non-compliance with a Data Protection Principle
may lead to a complaint to the Privacy Commissioner for Personal Data (the "Privacy Commissioner"). The Privacy Commissioner
may serve an enforcement notice to direct the data user to remedy the contravention. A data user who contravenes an enforcement notice
commits an offence which may lead to a fine and imprisonment.
The PDPO also gives data subjects certain rights, inter
alia:
●
the right to be informed by
a data user whether the data user holds personal data of which the individual is the data subject;
●
if the data user holds such
data, to be supplied with a copy of such data; and
●
the right to request correction
of any data they consider to be inaccurate.
The PDPO criminalizes, including but not limited
to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request
and the unauthorized disclosure of personal data obtained without the relevant data user's consent.
Hong Kong Laws and Regulations relating to Trade Description
Trade Descriptions Ordinance
(Chapter 362
of the Laws of Hong Kong) ("TDO"), which came into full effect in Hong Kong on April 1, 1981 aims to prohibit false or misleading
trade descriptions and statements to goods and services provided to the customers during or after a commercial transaction. Pursuant to
the TDO, any person in the course of any trade or business applies a false trade description to any goods or supply or offers to supply
them commits an offence and a person also commits the same offence if he/she is in possession for sale or for any purpose of trade or
manufacture of any goods with a false description. The TDO also provides that traders may commit an offence if they engage in a commercial
practice that has a misleading omission of material information of the goods, an aggressive commercial practice, involves bait advertising,
bait and switch or wrong acceptance of payment.
Hong Kong Laws and Regulations relating to
Sales of Goods
Pursuant to
Sale of Goods Ordinance
(Chapter
26 of the Laws of Hong Kong) ("SOGO"), which came into full effect in Hong Kong on August 1, 1896, in every contract of sale,
there is an implied warranty that the goods are free, and will remain free until the time when the property is to pass,
from any charge or encumbrance not disclosed or known to the buyer before the contract is made and that the buyer will enjoy quiet
possession of the goods except so far as it may be disturbed by the owner or other person entitled to the benefit of any charge or
encumbrance so disclosed or known. The SOGO provides that there is an implied condition that the goods shall correspond with the
description where there is a contract for the sale of goods by description, and there is any implied condition or warranty as
to the quality or fitness for any particular purpose of goods supplied under a contract of sale. Where the seller sells
goods in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable
quality.
Hong Kong Laws and Regulations relating to
Supply of Services
Pursuant to
Supply of Services (Implied Terms)
Ordinance
(Chapter 457 of the Laws of Hong Kong) ("SSITO"), which came into full effect in Hong Kong on October 21, 1994,
in a contact for the supply of a service where the supplier is acting in the course of a business, there is an implied term that
the supplier will carry out the service with reasonable care and skill. The SSITO provides that where, under a contract for the supply
of a service by a supplier acting in the course of a business, the time for the service to be carried out is not fixed by the contract,
is not left to be fixed in a manner agreed by the contract or is not determined by the course of dealing between the parties, there is
an implied term that the supplier will carry out the service within a reasonable time.
63
Hong Kong Laws and Regulations relating to
Exemption Clauses in a Contract
Control of Exemption Clauses Ordinance
(Chapter 71 of the Laws of Hong Kong) ("CECO"), which came into full effect in Hong Kong on December 1, 1990 aims to limit
the scope where the seller may limit its liability via the terms of the contracts. The CECO provides that unless the concerned terms satisfy
the test of reasonableness, a person dealing as consumer cannot by reference to any contract term be made to indemnify another person
(whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract.
Hong Kong Laws and Regulations relating to
Obscene and Indecent Article
Pursuant to
Control of Obscene and Indecent
Articles Ordinance
(Chapter 390 of the Laws of Hong Kong) ("COIAO"), which came into full effect in Hong Kong on September
1, 1987, any person who publishes, possesses for the purpose of publication or imports for the purpose of the publication, any obscene
article, whether or not he knows that it is an obscene article, may commit an offence and may be liable for a fine and imprisonment. The
COIAO provides that it may be an offence to publish any indecent article without sealing such articles in wrappers and displaying a notice
as prescribed by the COIAO. It may also be an offence to publish any indecent article to a person under 18, whether or not it is known
that it is an indecent article or that such person is under 18.
Hong Kong Laws and Regulations relating to
Copyright
Copyright Ordinance
(Chapter 528 of the
Laws of Hong Kong) ("Copyright Ordinance"), which came into full effect in Hong Kong on July 13, 2001 provides comprehensive
protection for recognized categories of work including artistic work. The Copyright Ordinance restricts certain acts such as copying and/or
issuing or making available copies to the public of a copyright work without the authorization from the copyright owner as it may constitute
primary infringement. The Copyright Ordinance provides that a person may also incur liability for secondary infringement if that person
possesses, sells, distributes or deals with a copy of a work which is, and which he knows or has reason to believe to be, an infringing
copy of work for the purposes of or in the course of any trade or business without the consent of the copyright owner.
Hong Kong Laws and Regulations relating to
Competition
Competition Ordinance
(Chapter 619 of the
Laws of Hong Kong) ("Competition Ordinance"), which came into full effect in Hong Kong on December 14, 2015 prohibits and
deters undertakings in all sectors from adopting anti-competitive conduct which has the object or effect of preventing, restricting or
distorting competition in Hong Kong. The key prohibitions include (i) prohibition of agreements between businesses which have the
object or effect of preventing, restricting or distorting competition in Hong Kong; and (ii) prohibiting companies with a substantial
degree of market power from abusing their power by engaging in conduct that has the object or effect of preventing, restricting or distorting
competition in Hong Kong. The penalties for breaches of the Competition Ordinance include, but are not limited to, financial penalties
of up to 10% of the total gross revenues obtained in Hong Kong for each year of infringement, up to a maximum of three years in which
the contravention occurs.
Hong Kong Laws and Regulations relating to
Employment
Pursuant to
Employment Ordinance
(Chapter
57 of the Laws of Hong Kong) ("EO"), which came into full effect in Hong Kong on September 27, 1968, all employees covered
by the EO are entitled to basic protection under the EO including but not limited to payment of wages, restrictions on wages deductions
and the granting of statutory holidays.
Pursuant to
Mandatory Provident Fund Schemes
Ordinance
(Chapter 485 of the Laws of Hong Kong) ("MPFSO"), which came into full effect in Hong Kong on December 1, 2000,
every employer must take all practicable steps to ensure that the employee becomes a member of a Mandatory Provident Fund (MPF) scheme.
An employer who fails to comply with such a requirement may face a fine and imprisonment. The MPFSO provides that an employer who
is employing a relevant employee must, for each contribution period, from the employer's own funds, contribute to the relevant
MPF scheme the amount determined in accordance with the MPFSO.
Pursuant to
Employees' Compensation Ordinance
(Chapter 282 of the Laws of Hong Kong) ("ECO"), which came into full effect in Hong Kong on December 1, 1953, all employers
are required to take out insurance policies to cover their liabilities under the ECO and at common law for injuries at work in respect
of all of their employees. An employer failing to do so may be liable to a fine and imprisonment.
64
C. Organizational structure
Below is the Company's corporate structure chart as of the date
of this report.
Variable Interest Entity Arrangements
In establishing our business, we have used a variable
interest entity, or VIE, structure. In the PRC, investment activities by foreign investors are principally governed by the NDRC and the
MOFCOM which promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition) (the "2021
National Negative List") and the Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade
Zones (2021 Edition) (the "2021 FTZ Negative List") (collectively the "2021 Negative Lists") on December 27, 2021,
which took effect on January 1, 2022. Industries listed in the 2021 Negative Lists are divided into two categories: restricted and prohibited.
Industries not listed in the 2021 Negative Lists are generally deemed as constituting a third "permitted" category. .
Our Company and the WFOE are considered as foreign investors or foreign invested enterprises under PRC law.
65
Though the business we conduct through the variable
interest entity is not within the category in which foreign investment is currently restricted or prohibited under the Negative List or
other PRC Laws, we expect that in the future Jiangsu Yanggu will engage in marketing survey services for online marketplaces. Marketing
survey services are within the category in which foreign investment is restricted pursuant to the Negative List. In addition, we intend
to centralize our management and operation in the PRC to avoid being restricted in conducting certain business activities which are important
for our current or future business but are currently restricted or might be restricted in the future. As such, we believe the agreements
between the WFOE and the variable interest entity are necessary and essential for our business operation without the equity ownership
of the VIE. These contractual arrangements with the variable interest entity and its shareholders enable us to exercise effective control
over the variable interest entity and hence consolidate the financial results of the VIE and its wholly owned subsidiaries without being
deemed as a foreign invested company.
In our case, the WFOE effectively assumed management
of the business activities of the variable interest entity through a series of agreements which are referred to as the VIE Agreements.
The VIE Agreements are comprised of a series of agreements, including a Technical Consultation and Service Agreement, an Equity Pledge
Agreement, an Equity Option Agreement, and a Voting Rights Proxy and Financial Supporting Agreement. Through the VIE Agreements, the WFOE
has the right to advise, consult, manage and operate the variable interest entity for an annual consulting service fee in the amount of
100% of the variable interest entity's net profit as determined under PRC accounting standards. The shareholders of the variable
interest entity have pledged all of their rights, title and equity interest in the variable interest entity as security for the WFOE to
collect consulting services fees provided to the variable interest entity through the Equity Pledge Agreement. In order to further reinforce
the WFOE's right to control and operate the variable interest entity, the variable interest entity's shareholders have granted
the WFOE an exclusive right and option to acquire all of their equity interests in the variable interest entity through the Equity Option
Agreement.
The material terms of the VIE Agreements with
Jiangsu Yanggu and its shareholders are as follows:
Technical Consultation and Service Agreement.
Pursuant
to the Technical Consultation and Service Agreement between the WFOE and Jiangsu Yanggu dated May 8, 2019, the WFOE has the exclusive
right to provide consultation and services to Jiangsu Yanggu in the areas of management, human resources, technology and intellectual
property rights. For such services, Jiangsu Yanggu agrees to pay service fees in the amount of 100% of its net income and the WFOE has
the obligation to absorb 100% of Jiangsu Yanggu's losses. The WFOE exclusively owns any intellectual property rights arising from
the performance of this Technical Consultation and Service Agreement. The amount of service fees and the payment term can be amended by
the WFOE with consultation with Jiangsu Yanggu for implementation. The term of the Technical Consultation and Service Agreement is 20
years. The WFOE may terminate this agreement at any time by giving 30 days' written notice to Jiangsu Yanggu.
Equity Pledge Agreement
. Pursuant
to the Equity Pledge Agreement among the WFOE, Jiangsu Yanggu and Jiangsu Yanggu's shareholders dated May 8, 2019, amended on January
28, 2021 (collectively, the "Pledge"), each of Jiangsu Yanggu's shareholders pledged all of their equity interests in
Jiangsu Yanggu to the WFOE to guarantee Jiangsu Yanggu's performance of relevant obligations and indebtedness under the Technical
Consultation and Service Agreement and other control agreements (collectively, the "Control Agreement"). If Jiangsu Yanggu
breaches its obligations under the Control Agreement, the WFOE, as pledgee, will be entitled to certain rights, including the right to
dispose of the pledged equity interests in order to recover the damages associated with such breaches. The Pledge shall be continuously
valid until all of Jiangsu Yanggu's shareholders are no longer shareholders of Jiangsu Yanggu, or until the satisfaction of all
Jiangsu Yanggu's obligations under the Control Agreement.
66
Equity Option Agreement.
Pursuant
to the Equity Option Agreement among the WFOE, Jiangsu Yanggu and Jiangsu Yanggu's shareholders dated May 8, 2019, amended on January
28, 2021, WFOE has the exclusive right to require that Jiangsu Yanggu's shareholders fulfill and complete all approval and registration
procedures required under PRC laws for the WFOE to purchase, or designate one or more persons to purchase, such shareholders' equity
interests in Jiangsu Yanggu, in one or multiple transactions, at any time or from time to time, at the WFOE's sole and absolute
discretion. The purchase price shall be the lowest price allowed by PRC laws. The Equity Option Agreements shall remain effective until
all of the equity interests owned by Jiangsu Yanggu's shareholders have been legally transferred to the WFOE or its designee(s).
Voting Rights Proxy and Financial Supporting
Agreements.
Pursuant to the Voting Rights Proxy and Financial Supporting Agreement among the WFOE, Jiangsu Yanggu and Jiangsu
Yanggu's shareholders dated May 8, 2019, amended on January 28, 2021, Jiangsu Yanggu's shareholders irrevocably appointed
the WFOE or the WFOE's designee to exercise all of his or her rights as a shareholder of Jiangsu Yanggu under the Articles of Association
of Jiangsu Yanggu, including but not limited to the power to exercise all such shareholder's voting rights with respect to all matters
to be discussed and voted in Jiangsu Yanggu shareholder meetings. The term of the Voting Rights Proxy and Financial Supporting Agreements
is 20 years.
D. Property, Plants and Equipment
Our
principal executive offices are located in Hong Kong where we lease approximately 51 square meters of office space. We also lease approximately
2,500 square meters of office space in China. Our leased premises are leased from unrelated third parties and related parties who either
have valid title to the relevant properties or proper authorization from the title holder to sublease the property. On November 4, 2021,
Kashi Dongfang and Kashi Longrui, the wholly owned subsidiaries of Jiangsu Yanggu, jointly entered into an agreement acquired an office
building from Nanjing Z-COM Wireless Communication Technology Co., Ltd. for a total amount of RMB60 million (approximately $9.2 million).
The office building is located at Building 30, #699-22, Xuanwu Avenue, Xuanwu District, Nanjing City, Jiangsu Province, which is approximately
6,840 square meters. The land use rights for the land occupied by the building was acquired by means of purchase and remains valid until
December 20, 2056. The Company is decorating the building and expects to complete by the end of August 2023, which will be used as our
office space in China
.
We believe that we will have adequate facilities
to accommodate our future expansion plans. Currently, we lease the following properties to conduct our business:
Property
Lessee
Annual Rent
Termination
Date
Purposes/Use
No. 2, Youzishan Road, Dongba Street, Gaochun District
Jiangsu Yanggu
Rent free due to preferential treatment by local government for registered enterprises
November 1, 2029
Office
Room 501, 14
th
Floor, Shannxi Building, Kashi Avenue, Kashi, Xinjiang, China
Kashi Longrui
RMB 25,000 (approximately $3,572)
June 30, 2023
Office
4th Floor, Block F4, Zi Dong International Creative Park, No 1 Zidong Road, Qixia District, Nanjing, Jiangsu, China
Kashi Longrui
RMB 1,080,000 (approximately $154,285)
December 31, 2023
Office
Room 1402, Richmake Commercial Building, 198-200 Queen's Road Central, Hong Kong
International Exchange
HK$211,920 (approximately $27,344)
July 15, 2024
Office
67
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not Applicable
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the
following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial
statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-looking
statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those set forth under "Item 3. Key Information—D.
Risk Factors" or in other parts of this annual report on Form 20-F.
5A. Operating Results
Overview
We are an online provider of collectibles and
artwork e-commerce services, which allow collectors, artists and art dealers and owners to access a much bigger collectable and art trading
market where they can engage with a wider range of collectibles and artwork investors than they could likely encounter without our platforms.
We currently facilitate trading by individual and institutional customers of all kinds of collectibles and artwork and certain commodities
on our leading online platforms owned by our subsidiaries in Hong Kong, namely the China International Assets and Equity of Artworks Exchange
Limited and HKDAEx Limited. We commenced our operations in March 2018 and our customer trading volume has been growing rapidly since then.
We also provide online and offline integrated marketing, storage and technical maintenance services to our customers in China.
According to the report of "E-commerce in
China 2021" released by Ministry of Commerce of People's Republic of China on November 16, 2022, China's e-commerce
continued to grow in 2021. Data of National Bureau of Statistics of China indicates that in 2021, the national e-commerce transaction
volume reached RMB 42.3 trillion (approximately $6.13 trillion), an increase of 19.6% year-on-year.
On many mainstream e-commerce platforms, sales
of cultural products such as arts and crafts have flourished and developed rapidly, and art and collectibles related e-commerce business
is gradually growing. Online trading has become a major trend of the global art and collectibles trade. As a comprehensive service provider
with rich cultural and art collection and collectibles market operations and marketing experience, we seize current development opportunities
and provide online and offline supporting services for domestic and international art and collectibles e-commerce business. We plan to
build a complete art and collectibles business e-commerce service chain to serve the industry.
We provide customers of our online platform with
comprehensive services, including account opening, art investment education, market information, research, real-time customer support,
and artwork and collectibles warehousing services. Most services are delivered online through our proprietary client software and call
center. Our client software provides not only market information and analysis, but also interactive functions including live discussion
boards and instant messaging with customer service representatives, which we believe enhances our customers' engagement. Internally,
we legally collect and analyze customer behavior and communications data from our client software, customer relationship management system
and the exchanges, which allow us to better understand, attract and serve our customers.
We provide industry solutions and related software
products, system development and technical support services for our cooperation with e-commerce platform customers.
We strive to minimize conflicts of interest with
our customers, which we believe is essential for our long-term success. Under the trading rules of the two exchange platforms we operate
on, we do not set, quote or influence the trading prices, and cannot access our customers' money.
Impact of COVID-19
Beginning in late 2019, there was an outbreak
of COVID-19 (coronavirus) which spread quickly across many parts of China, the U.S. and worldwide. In March 2020, the World Health Organization
declared the COVID-19 as a pandemic. Although the COVID-19 has mostly under control worldwide, the outbreak of the
Omicron
variant
has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in many parts
of China for in 2022. Our business and results of operations have been affected due to office closures and disruption in logistics in
various parts of China.
China started easing the strict lockdown procedures
in early December 2022, which has led to surge in COVID infections and disrupt our business operations in December 2022 and January 2023.
Any future impact of COVID-19 on our operation results will depend on, to a large extent, future developments and new information that
may emerge regarding the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain COVID-19
or treat its impact, almost all of which are beyond our control.
68
Impact of investigation from our related party
On July 1, 2022, Mr. Huajun Gao and Mr. Aiming
Kong, each an 11.5% shareholder of Oriental Culture Holding LTD (the "Company"), were detained by Nan County Public Safety
Bureau of Yiyang City, Hunan Province, China. On July 26, 2022, Nan County People's Procuratorate approved the arrest of Mr. Gao
and Mr. Kong with charge of illegal business operation of Nanjing Jinwang Art Purchase E-commerce Co., Ltd., a company controlled by Mr.
Gao and Mr. Kong ("Nanjing Jinwang"). On July 1, 2022, the bank accounts of Nanjing Jinwang were frozen by Nan County Public
Safety Bureau, including a trust account into which the customers of the Company deposit their security deposits in order to trade on
the Company's two online trading platforms which the Company has entrusted Nanjing Jinwang for escrow.
Also, on July 1, 2022, Nan County Public Safety
Bureau froze certain bank accounts of Kashi Longrui Business Management Services Co., Ltd. ("Kashi Longrui"), Kashi Dongfang
Cangpin Culture Development Co., Ltd. ("Kashi Dongfang") and Nanjing Yanyu Information Technology Co., Ltd. ("Nanjing
Yanyu"), all subsidiaries of Jiangsu Yanggu Culture Development Co., Ltd., the variable interest entity of the Company in China
because they, each had business relationship with Nanjing Jinwang.
Neither the Company nor its VIE or subsidiaries of its VIE has received
any notification for enforcement charges from Nan County Public Safety Bureau, other than cash and short term investment in the frozen
bank accounts with balances totaling approximately $16.5 million and due from Nangjng Jinwang of approximately $3.4 million relating to
the Nanjing Jinwang investigation as described above as of December 31, 2022. Currently the customers can freely transfer their deposits
and make their withdrawals based on their actual needs. Mr. Gao and Mr. Kong are not officers, directors or employees of the Company,
its VIE or subsidiaries of the VIE.
Due to the investigation of Nanjing Jinwang and
frozen bank accounts, the business operations of the Company have been materially and negatively impacted as its customers experienced
difficulties withdrawing their security deposits through online banking and have concerns regarding their deposited funds. The Company
has taken remedial measures to assist its customers in withdrawing security deposits, such as through manual and in person application
with the bank to transfer funds, so that they will have confidence in the Company and continue to list and trade art and collectible products
on the online platforms of the Company. However, there can be no assurance that these measures will restore customer confidence in using
the Company's services efficiently or at all.
The investigation of Mr. Gao, Mr. Kong and Nanjing Jinwang is
ongoing. The Company has and will continue to communicate with Nan County Public Safety Bureau and other government authorities
to obtain more information regarding the investigation and to attempt to unfreeze the bank accounts for the subsidiaries of the VIE. The
Company will monitor the development of the investigation and will provide additional information concerning its impact on the Company's
business in due course.
This investigation from our related party as well
as the outbreak of Omicron variant in China had negative impact on our revenue and net income for the year ended December 31, 2022. Our
revenue decreased approximately $19.8 million from approximately $37.6 million for the year ended December 31, 2021 to approximately $17.8
million for the same period of 2022 and our net income decreased approximately $8.2 million from approximately $11.4 million for the year
ended December 31, 2021 to approximately $3.2 million for the same period of 2022.
69
Key Factors Affecting Our Results
We believe the key factors affecting our financial
condition and results of operations include the following:
Number of Active Traders
Our results of operations are dependent on the
number of active traders using our platform. Active traders is defined as the total number of individuals who placed trades and traded
collectibles, artwork and commodities on our platforms during the relevant period. We had approximately 142,000, 159,000 and 77,000 traders
that participated in trading collectibles, artwork and commodities on our platforms for the years ended December 31, 2022, 2021 and 2020,
respectively. The number of traders in 2020 was affected by outbreak of COVID-19 while in 2021 the number of traders increased by 106%
as most of COVID-19 in PRC were under control in 2021. In 2022, due to outbreak of Omicron variant and impact of frozen bank accounts
caused by the investigation of our related party, number of traders decreased by 11%.
Number of Transactions
During the years ended December 31, 2022, 2021
and 2020, our platforms facilitated and completed approximately 96 million, 135 million and 48 million transactions, respectively. The
change in the number of transactions was due to the change in the number of active traders and trading activities due to reason mentioned
above.
Transaction Value
Transaction value is defined as the dollar amount
of the purchase and sale of the ownership units of the collectibles, artwork and commodities after they are listed on our platforms.
During the years ended December 31, 2022, 2021 and 2020, total transaction value amounted to approximately $8.6 billion, $15.6 billion
and $4.6 billion, respectively. The change in total transaction value was due to the change in number of products listed and number of
transactions for the year ended December 31, 2022, 2021 and 2020. The numbers of new collectibles/artwork and commodities that were successfully
listed on our platforms decreased from 199 for the year ended December 31, 2021 to 31 for the year ended December 31, 2022.
Average Transaction Value Per Trader
Average
transaction value per trader is calculated by dividing the total number of active traders from total transaction value during the relevant
period. During the years ended December 31, 2022, 2021 and 2020, our average transaction value per client was approximately $0.06 million,
$0.1 million and $0.06 million, respectively. The decrease of average transaction value is due to decrease in transaction value as stated
above.
Results of Operations
The tables in the following discussion summarize
our consolidated statements of income and comprehensive income for the periods indicated. This information should be read together with
our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period
are not necessarily of the results that may be expected for any future period.
70
Years Ended December 31, 2022 vs. December 31, 2021
For the Years Ended
December 31,
Variance
2022
2021
Amount
%
Net revenues
$
17,646,814
$
37,363,303
$
(19,716,489
)
(52.8
)%
Net revenues – related parties
166,325
233,157
(66,832
)
(28.7
)%
Total operating revenues
17,813,139
37,596,460
(19,783,321
)
(52.6
)%
Less: cost of revenues
(996,459
)
(2,425,420
)
1,428,961
(58.9
)%
Gross profit
16,816,680
35,171,040
(18,354,360
)
(52.2
)%
Operating expenses
(14,227,329
)
(24,285,574
)
10,058,245
(41.4
)%
Income from operations
2,589,351
10,885,466
(8,296,115
)
(76.2
)%
Other income, net
651,147
558,807
92,340
16.5
%
Income before income taxes
3,240,498
11,444,273
(8,203,775
)
(71.7
)%
Provision for income taxes
4,812
-
4,812
100.0
%
Net income
3,235,686
11,444,273
(8,208,587
)
(71.7
)%
Foreign currency translation adjustment
(2,273,012
)
174,841
(2,447,853
)
(1,400.0
)%
Comprehensive income
$
962,674
$
11,619,114
(10,656,440
)
(91.7
)%
Weighted average number of ordinary shares outstanding – basic and diluted
21,108,143
20,484,272
623,871
3.0
%
Basic and diluted earnings per share
$
0.15
$
0.56
$
(0.41
)
(72.6
)%
Revenues:
The following table sets forth the principal components
of our net revenues by amounts and percentages of our net revenues for the periods indicated:
For the Years Ended December 31,
Variance
2022
2021
Amount
%
Revenue
%
Revenue
%
Listing services fees
(1)
$
1,244,251
7.0
$
6,900,561
18.3
$
(5,656,310
)
(82.0
)%
Transaction fees
(2)
13,643,958
76.6
24,462,861
65.1
(10,818,903
)
(44.2
)%
Marketing services fees
(3)
2,749,224
15.4
5,750,901
15.3
(3,001,677
)
(52.2
)%
Other revenues
(4)
*
175,706
1.0
482,137
1.3
(306,431
)
(63.6
)%
Total operating revenues
$
17,813,139
100.0
$
37,596,460
100.0
$
(19,783,321
)
(52.6
)%
*
Including $166,325 and $233,157
from related parties for the years ended December 31, 2022 and 2021, respectively.
(1)
Listing
service fees
: Our performance obligation is to provide listings on our platform. Listing service fees are calculated based on a percentage
of the listing value of collectibles, artwork and commodities. Listing value is the total offering price of the collectible, artwork
and commodities when the ownership of the units are initially listed on our trading platforms. We utilize an appraised value as a basis
to determine the appropriate listing value for each collectible, artwork or commodities, or portfolio of collectibles, artwork or commodities.
We recognize the related revenue upon our completion of our performance obligation to the customer and its item is successfully listed
for trading on our platforms. Our standard listing fees for artwork and collectibles range from 3% to 8% and 2.3% to 10.0% for each of
the years ended December 31, 2022 and 2021 and standard listing fees for commodities was 3% to 8% and 1% to 6% of the initial listing
value for each of 2022 and 2021. The rate is dependent on the type of listings and is negotiated on a case by case basis. In 2022, we
also had listing for silver coins, which the listing price is charged on per coin basis instead of a percentage of listing value. The
average listing period is approximately three months.
71
Total listing service fees decreased by approximately
$5.7 million or 82.0% from approximately $6.9 million for the year ended December 31, 2021 to approximately $1.2 million for the same
period in 2022. Our listing service fees are calculated based on a percentage of the listing value of collectibles, artwork and commodities
of new products. During the years ended December 31, 2022 and 2021, total listing value of listed artwork, collectibles and commodities
amounted to approximately $0.4 billion and $1.0 billion, respectively. In addition, there were less listing values generated by new products
listings with approximately $44.9 million and $58.3 million for 2022 and 2021, respectively. The numbers of new collectibles/artwork
and commodities that were successfully listed on our platforms decreased from 199 for the year ended December 31, 2021 to 31 for the
year ended December 31, 2022. The decrease in our listings was mainly due to impact from outbreak of COVID Omicron variant in 2022 and
the freeze of bank accounts caused by the investigation of our related party in second half of 2022 which reduced overall customers listing.
(2) Transaction fee revenue
: Transaction
fee revenue is generally calculated based on the transaction value of collectibles, artwork or commodities per transaction for our services
to facilitate the trading transactions. Transaction value is the dollar amount of the purchase and sale of the collectibles, artwork or
commodities after it is listed on our platform. We typically charge from 0.15% to 0.3% of the transaction value per transaction from both
the purchase and sale side of the transaction resulting in an aggregate of 0.3% to 0.6% of total transaction value. Sometimes, we charge
a predetermined transaction rate, which is negotiated on a case by case basis, for selected traders with specific large transactions.
Transaction fee revenue also includes predetermined monthly transaction fees, which are negotiated on a case by case basis for selected
traders with high trading volume, and is recognized and earned over the specified service period.
In 2018, the Company started a customer reward
points program, pursuant to which reward points were issued for opening a new account or referring customers to open accounts with us
during our promotion period. In that regard, customers are required to redeem certain reward points for new listings in addition to the
regular listing services fees. If a customer does not own any reward points, he/she can purchase them from other customers on our platform.
We do not record revenue when customers redeem any points as it is considered as a prerequisite for a new listing in addition to the regular
services fees. The points are traded by and among our customers on the platform and we charge a transaction fee from such points trading.
Transaction fee revenue from the trading of points amounted to approximately $1.1 million and $3.4 million for the years ended December
31, 2022 and 2021, respectively.
Total transaction fee revenue decreased by approximately
$10.9 million or 44.2% from approximately $24.5 million for the year ended December 31, 2021 to approximately $13.6 million for the same
period in 2022. The decrease was due to the decrease in total transaction value. Transaction fee revenue is calculated based on a certain
percentage of the transaction value per transaction. Our total transaction value decreased from approximately US$15.6 billion the year
ended December 31, 2021 to approximately $8.6 billion for the same period in 2022. The decrease in our transaction was mainly due to impact
from resurgence of COVID variant in the first half of 2022 and freeze of bank accounts caused by the investigation of our related party
in second half of 2022 which reduced overall customers transactions.
(3) Marketing service fees
: Marketing service
fees is what we charge for promoting and marketing our customers' collectible or artwork. The services include assisting our customers
in connection with his/her listing and trading of his/her collectible/artwork on our platform, which mainly includes consulting and supporting
services of the marketability for the collectible/artwork; assessing its market value and market acceptance for the collectible/artwork;
and assisting in the application and legal protection required for the customer's collectible/artwork to be approved for listing
on our platform. For marketing service contracts in which the related performance obligations can be completed within a short period of
time, the Company recognizes the related revenue upon the completion of its performance obligations.
Marketing service agreements also include providing
promotion services for customers' items as where to place ads on well-known cultural or art exchange websites in China, to provide
online and offline marketing services including cooperation with auction houses and participate in industry-related exhibitions and fairs.
The marketing service fees are charged on a negotiated fixed fee basis, which is based on the type of the listing session that the customer
applies for and whether the customer has listed and sold its collectibles on other platforms before, and they were not based on   the
value of the underlying collectible, artwork and commodities. Marketing service contracts and fees are recognized upon the completion
of all performance obligations.
72
Marketing service fees decreased by approximately
$3.0 million or 52.2% from approximately $5.8 million for the year ended December 31, 2021 to approximately $2.8 million for the same
period in 2022. The decrease was due to decreasing of type of artwork we promote. During the year ended December 31, 2021 and 2022, 199
and 31 types of collectibles/artwork were successfully listed on our platforms, of which we promoted 64 and 31 types of newly listed collectibles
and artwork for our customers, respectively. The overall decrease was due to decrease in listing and transactions for reasons stated
above.
(4) Other revenues
: Other revenues primarily
includes services fees for IT technical support and agency recommendation fees. IT technical support fees are negotiated on a case by
case basis and is recognized when the related services have been performed based on the specific terms of the contract. Agency recommendation
fees are mainly revenue generated from providing consulting and training services to certain traders/agents. Upon completion of the training
and consulting, these qualified traders/agents may introduce our platform and services to potential customers to list their collectibles
and artwork with us for a fee or promote their own products on our platform. Total other revenues decreased by $306,431 or 63.6% from
$482,137, which included $233,157 from providing technological services to our related parties for the same period in 2021 to $175,706,
which included $166,325 from providing technological services to our related parties for the same period in 2022. The decrease was primarily
because we provided less consulting and training services to traders for the year ended December 31, 2022.
Cost of Revenues
Cost of revenues decreased by approximately $1.4
million or 58.9% from approximately $2.4 million including approximately $0.7 million from a related party for the year ended December
31, 2021 to approximately $1.0 million including approximately $0.3 million from a related party for the same period in 2022. The decrease
in cost of revenues was primarily due to the decrease in warehouse storage fees of approximately $0.4 million, decrease in verification
related fees of approximately $0.7 million. The warehouse storage fees were charged based on certain percentage of listing value of commodities,
decrease in warehouse storage fee was due to overall decrease in overall listing value of products.
Gross Profit
Gross profit decreased by approximately $18.4
million or 52.2% from approximately $35.2 million for the year ended December 31, 2021 to approximately $16.8 million for the year ended
December 31, 2022. Gross margin for the years ended December 31, 2022 and 2021 were approximately 94% and approximately 94%, respectively.
Selling and Marketing Expenses
Selling expenses decreased by approximately $8.2
million, or 51.7%, from approximately $16.0 million including approximately $0.4 million to a related party for the year ended December
31, 2021 to approximately $7.7 million including approximately $44,000 to a related party for the same period in 2022. The decrease was
primarily due to the decrease in marketing expenses of approximately $8.4 million as we paid less commissions due to less new listings
and traders introduced by third parties. The Company has two types of reward program, one is to rebate directly to customers while the
other is to reward third party sales agents. Rebates to customers are considered as a reduction in sales price, so the rebate is instantaneous
while rebates to third party sales agents is usually paid in one to three months in arrears.
General and Administrative
Expenses
Our
general and administrative expenses decreased by approximately $1.8 million, or 21.8% from approximately $8.3 million including approximately
$0.2 million to a related party for the year ended December 31, 2021 to approximately $6.5 million including approximately $0.2 million
to a related party for the same period in 2022. The decrease in our general and administrative expenses was primarily due to decreased
professional fees of approximately $0.6 million, decreased consulting expenses for business development of approximately
$1.0 million, decreased travel and meeting related fees of approximately $0.3 million and decreased
office and management expenses of approximately $0.2 million, because of the controlling measures and travel restrictions taken by Chinese
government due to outbreak of COVID-19 in 2022, offset by increased depreciation and amortization expenses of approximately $0.3 million
due to new furniture and vehicle purchased
during the year
ended December 31, 2022.
73
Other Income
Total other income increased by approximately
$0.1 million, or 16.5%, from approximately $0.6 million for the year ended December 31, 2021 to approximately $0.7 million for the same
period in 2022. The increase was mainly due to the increase of approximately $0.1 million in rental income that we subleased part of our
office space to the third party. Other income also included government subsidies of approximately $240,000 to promote local business development
and a VAT refund of $61,000. As part of VAT reform in 2019, a taxpayer in certain service industries was allowed to reclaim an additional
10% of input VAT credit against the amount of VAT payable from April 1, 2019 to December 31, 2022.
Provision for Income
Taxes
Our provision for income taxes amounted to $4,812
and nil for the year ended December 31, 2022 and 2021, respectively. We generated most of our income from the subsidiaries of our VIE
that had preferential tax treatment which are formed and registered in Kashi in Xinjiang Provence, China. We also have provided 100% allowance
on net operating losses from our VIE which incurred losses.
Net Income
Our net income decreased by approximately $8.2
million, or 71.7%, from $11.4 million for the year ended December 31, 2021 to approximately $3.2 million for the same period in 2022.
Such change was the result of the combination of the changes as discussed above.
Foreign Currency Translation Adjustment
Changes in foreign currency translation adjustment are mainly due to
the fluctuation of foreign exchange rates between RMB/HKD (the functional currency of our operating entities) and the USD dollar (reporting
currency).
Results of Operations
The tables in the following discussion summarize
our consolidated statements of income and comprehensive income for the periods indicated. This information should be read together with
our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period
are not necessarily of the results that may be expected for any future period.
Years Ended December 31, 2021 vs. December 31, 2020
For the Years Ended
December 31,
Variance
2021
2020
Amount
%
Net revenues
$
37,363,303
$
17,225,630
$
20,137,673
116.9
%
Net revenues – related parties
233,157
213,172
19,985
9.4
%
Total operating revenues
37,596,460
17,438,802
20,157,658
115.6
%
Less: cost of revenues
(2,425,420
)
(2,642,163
)
216,743
(8.2
)%
Gross profit
35,171,040
14,796,639
20,374,401
137.7
%
Operating expenses
(24,285,574
)
(13,150,551
)
(11,135,023
)
84.7
%
Income from operations
10,885,466
1,646,088
9,239,378
561.3
%
Other income, net
558,807
402,019
156,788
39.0
%
Income before income taxes
11,444,273
2,048,107
9,396,166
458.8
%
Provision for income taxes
-
-
-
-
%
Net income
11,444,273
2,048,107
9,396,166
458.8
%
Foreign currency translation adjustment
174,841
1,144,657
(969,816
)
(84.7
)%
Comprehensive income
$
11,619,114
$
3,192,764
8,426,350
263.9
%
Weighted average number of ordinary shares outstanding – basic and diluted
20,484,272
15,615,729
-
-
Basic and diluted earnings per share
$
0.56
$
0.13
$
0.43
330.8
%
74
Revenues:
The following table sets forth the principal components
of our net revenues by amounts and percentages of our net revenues for the periods indicated:
For the Years Ended December 31,
2021
2020
Variance
Revenue
%
Revenue
%
Amount
%
Listing services fees
(1)
$
6,900,561
18.3
$
8,405,211
48.2
$
(1,504,650
)
(18.0
)%
Transaction fees
(2)
24,462,861
65.1
7,075,283
40.5
17,387,578
246
%
Marketing services fees
(3)
5,750,901
15.3
1,370,164
7.9
4,380,737
320
%
Other revenues
(4)
*
482,137
1.3
588,144
3.4
(106,007
)
(18.0
)%
Total operating revenues
$
37,596,460
100.0
$
17,438,802
100.0
$
20,157,658
116
%
*
Including $233,157 and $213,172
from related parties for the years ended December 31, 2021 and 2020, respectively.
(1) Listing service fees
: Our performance
obligation is to provide listings on our platform. Listing service fees are calculated based on a percentage of the listing value of collectibles,
artwork and commodities. Listing value is the total offering price of the collectible, artwork and commodities when the ownership units
are initially listed on our trading platform. We utilize an appraised value as a basis to determine the appropriate listing value for
each collectible , artwork or commodities, or portfolio of collectibles, artwork or commodities. We recognize the related revenue upon
our completion of our performance obligation to the customer and its item is successfully listed for trading on our platform. Our standard
listing fees for artwork and collectibles range from 2.3% to 10.0% for each of the years ended December 31, 2021 and 2020 and standard
listing fees for commodities was 1% to 6% of the initial listing value for both years. The rate is dependent on the type of listings and
is negotiated on a case by case basis. In 2021, we also had listing for silver coins, which the listing price is charged on per coin basis
instead of a percentage of listing value. The average listing period is around three months.
Total listing service fees decreased by approximately
$1.5 million or 18.0% from $8,405,211 for the year ended December 31, 2020 to $6,900,561 for the same period in 2021. Our listing service
fees are calculated based on a percentage of the listing value of collectibles, artwork and commodities of new products. During the years
ended December 31, 2021 and 2020, total listing value of listed artwork, collectibles and commodities amounted to approximately $1.0 billion
and $0.8 billion, respectively, however, there were less listing value generated by new products listings with approximately $58.3 million
and $88.4 million for new products listed in 2021 and 2020, respectively. The number in new collectibles/artwork and commodities were
successfully listed on our platforms increased from 188 for the year ended December 31, 2020 to 199 for the year ended December 31, 2021.
The total number of collectibles/artwork and commodities that were listed on our platforms increased from 303 for the year ended December
31, 2020 to 494 for the year ended December 31, 2021.
(2) Transaction fee revenue
: Transaction
fee revenue is generally calculated based on the transaction value of collectibles, artwork or commodities per transaction for our services
to facilitate the trading transactions. Transaction value is the dollar amount of the purchase and sale of the collectibles, artwork or
commodities after it is listed on our platform. We typically charge from 0.15% to 0.3% of the transaction value per transaction from both
the purchase and sale side of the transaction resulting in an aggregate of 0.3% to 0.6% of total transaction value. Sometimes, we charge
a predetermined transaction rate, which is negotiated on a case by case basis, for selected traders with specific large transactions.
Transaction fee revenue also includes predetermined monthly transaction fees, which are negotiated on a case by case basis for selected
traders with high trading volume, and is recognized and earned over the specified service period.
75
In 2018, the Company started a customer reward
points program, pursuant to which reward points were issued for opening a new account or referring customers to open accounts with us
during our promotion period. In that regard, customers are required to redeem certain reward points for new listings in addition to the
regular listing services fees. If a customer does not own any reward points, he/she can purchase them from other customers on our platform.
We do not record revenue when customers redeem any points as it is considered as a prerequisite for a new listing in addition to the regular
services fees. The points are traded by and among our customers on the platform and we charge a transaction fee from such points trading.
Transaction fee revenue from the trading of points amounted to approximately $3.4 million and $2.6 million for the years ended December
31, 2021 and 2020, respectively.
Total transaction fee revenue increased by approximately
$17.4 million or 246.0% from approximately $7.08 million for the year ended December 31, 2020 to approximately $24.5 million for the same
period in 2021. The increase was due to the increase in total transaction value. Transaction fee revenue is calculated based on a certain
percentage of the transaction value per transaction. Our total transaction value increased from approximately $4.6 billion the year ended
December 31, 2020 to approximately $15.6 billion for the same period in 2021. We have focused our effort in promoting existing products
traded on the platform by increasing our marketing expenses/activities in 2021 which resulted in increased transactions and transaction
value of our existing customers and products.
(3) Marketing service fees
: Marketing service
fees is what we charge for promoting and marketing our customers' collectible or artwork. The services include assisting our customers
in connection with his/her listing and trading of his/her collectible/artwork on our platform, which mainly includes consulting and supporting
services of the marketability for the collectible/artwork; assessing its market value and market acceptance for the collectible/artwork;
and assisting in the application and legal protection required for the customer's collectible/artwork to be approved for listing
on our platform. For marketing service contracts in which the related performance obligations can be completed within a short period of
time, the Company recognizes the related revenue upon the completion of its performance obligations.
Marketing service agreements also include providing
promotion services for customers' items as where to place ads on well-known cultural or art exchange websites in China, to provide
online and offline marketing services including cooperation with auction houses and participate in industry-related exhibitions and fairs.
The marketing service fees are charged on a negotiated fixed fee basis, which is based on the type of the listing session that the customer
applies for and whether the customer has listed and sold its collectibles on other platforms before, and they were not based on   the
value of the underlying collectible, artwork and commodities. Marketing service contracts and fees are recognized upon the completion
of all performance obligations.
Marketing service fees increased by approximately
$4.4 million or 319.7% from $1,370,164 for the year ended December 31, 2020 to $5,750,901 for the same period in 2021. The increase was
due to promoting additional types of artwork. During the year ended December 31, 2020 and 2021, 188 and 199 types of collectibles/artwork
were successfully listed on our platforms, of which we promoted 24 and 64 types of newly listed collectibles and artwork for our customers,
respectively.
(4) Other revenues
: Other revenues primarily
includes services fees for IT technical support and agency recommendation fees. IT technical support fees are negotiated on a case by
case basis and is recognized when the related services have been performed based on the specific terms of the contract. Agency recommendation
fees are mainly revenue generated from providing consulting and training services to certain traders/agents. Upon completion of the training
and consulting, these qualified traders/agents may introduce our platform and services to potential customers to list their collectibles
and artwork with us for a fee or promote their own products on our platform. Total other revenues decreased by approximately $106,000
or 18.0% from $588,144, which included of $213,172 from providing technological services to our related parties for the same period in
2020 to $482,137, which included of $233,157 from providing technological services to our related parties for the same period in 2021.
The decrease was primarily because we provided less consulting and training services to traders for the year ended December 31, 2021.
76
Cost of Revenues
Cost of revenues decreased by approximately $0.2
million or 8.2% from $2,642,163 including $1,734,761 from a related party for the year ended December 31, 2020 to $2,425,420 including
$730,007 from a related party for the same period in 2021. The decrease in cost of revenues was primarily due to the decrease in warehouse
storage fees of approximately $1.0 million offset by increase in appraisal fees and related services of approximately $0.7 million. The
warehouse storage fees were charged based on certain percentage of listing value of commodities, decrease in warehouse storage fee was
due to overall decrease in overall listing value of products, and certain new customers were transferred from other trading sites which
they were already paid their own warehouse fees before, therefore the Company did not need to pay for warehouse fees for those new traders.
Gross Profit
Gross profit increased by approximately $20.4
million or 137.7% from $14,796,639 for the year ended December 31, 2020 to $35,171,040 for the year ended December 31, 2021. Gross margin
for the years ended December 31, 2021 and 2020 were approximately 94% and approximately 85%, respectively. The increase in gross margin
was due mainly to the increased revenue and the decrease in costs in 2021 as a result of recovering from COVID-19.
Selling and Marketing Expenses
Selling expenses increased by approximately $9.9
million, or 165.8%, from 6,004,883 including $1,762,652 to a related party for the year ended December 31, 2020 to $15,958,450 including
$359,968 to a related party for the same period in 2021. The increase was primarily due to the increase in commission expenses of approximately
$10.2 million as our transaction fee revenue increased where we paid a percentage of transaction fees for third-party referrals of new
traders. The Company has two types of reward program, one is to rebate directly to customers while the other type is to reward the sales
agents. Rebates to customers are considered a reduction in sales price, so the rebate is instantaneous, while rebate to sales agents are
usually paid in one to three months in arrears. Our selling expenses to related party decreased by 79.6% as we reduced our advertising
activities on our related party's website where we focus our advertising efforts on other venues. Our total other marketing expenses
were at comparable levels in 2021 compared to 2020.
General and Administrative
Expenses
Our general and administrative expenses increased
by approximately $1.2 million, or 16.7% from $7,145,668 including $201,865 to a related party for the year ended December 31, 2020 to
$8,327,124 including $223,284 to a related party for the same period in 2021. The increase in our general and administrative expenses
was primarily due to increased compensation costs including salaries, bonuses of approximately $0.6 million, increased office, travel,
IT, training and meeting expenses of approximately $1.3 million as our business recovered from the pandemic and incurred more business
activities, offset by a decrease of approximately $0.8 million for the costs related to going public in 2020.
77
Other Income
Total other income increased by approximately
$0.2 million, or 39.0%, from $402,019 for the same period in 2020 to $558,807 for the same period in 2021. The increase in other income
was primarily due to the increase in interest income and gain from short term investment of approximately $0.1 million. Other income also
included government subsidies of approximately $115,000 to promote local business development and a VAT refund of $78,000. As part of
VAT reform in 2019, a taxpayer in certain service industries was allowed to reclaim an additional 10% of input VAT credit against the
amount of VAT payable from April 1, 2019 to December 31, 2021.
Provision for Income
Taxes
Our provision for income taxes amounted to nil
for both years ended December 31, 2021 and 2020. We generated most of our income from the subsidiaries of our VIE that had preferential
tax treatment which are formed and registered in Kashi in Xinjiang Provence, China. We also have provided 100% allowance on net operating
losses from our VIE which incurred losses.
Net Income
Our net income increased by approximately $9.4
million, or 458.8%, from $2.0 million for the year ended December 31, 2020 to approximately $11.4 million for the same period in 2021.
Such change was the result of the combination of the changes as discussed above.
Foreign Currency Translation Adjustment
Changes in foreign currency translation
adjustment are mainly due to the fluctuation of foreign exchange rates between RMB/HKD (the functional currency of our operating
entities) and the USD dollar (reporting currency).
5B. Liquidity and Capital Resources
Liquidity and Capital Resources
We had approximately $33.7 million of cash and
cash equivalents and short term investments, including approximately $16.5 million restricted cash and cash equivalents and short term
investments. We had approximately $38.4 million of working capital as of December 31, 2022. In assessing our liquidity, we monitor and
analyze our cash on-hand and our operating and capital expenditure commitments. To date, we have financed our operations primarily through
cash flows from operations, short-term investment, private placement and public offering.
On December 7, 2021, we entered into Securities
Purchase Agreements ("Agreements") with two investors ("Investors"), pursuant to which we agreed to sell to the
Investors in private placements, 600,000 ordinary shares at a purchase price of $5.00 per share for an aggregate offering price of $3,000,000.
We received proceed of approximately $2.0 million as of December 31, 2021 for 400,000 shares and received remaining $1.0 million for the
200,000 shares in January 2022. We believe that our current working capital is sufficient to support our operations for the next twelve
months. We may, however, need additional cash resources in the future if we experience changes in business conditions or other developments,
or if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions. If we determine that
our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt
securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our shareholders.
78
All of our revenue is denominated in RMB.
Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest
payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval
as long as certain routine procedural requirements are fulfilled. Therefore, our PRC subsidiary is allowed to pay dividends in
foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, current PRC
regulations permit our PRC subsidiary to pay dividends to us only out of their accumulated profits, if any, determined in accordance
with PRC accounting standards and regulations. Our PRC subsidiary are required to set aside at least 10% of their after-tax profits
after making up previous years' accumulated losses each year, if any, to fund certain reserve funds until the total amount set
aside reaches 50% of their registered capital. These reserves are not distributable as cash dividends. Furthermore, capital account
transactions, which include foreign direct investment and loans, must be approved by and/or registered with SAFE and its local
branches. See "
Risk Factors -Risks Relating to Doing Business in China
." We rely on dividends and other
distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have, and any limitation on
the ability of our PRC subsidiary to make payments to us could have a material adverse effect on our ability to conduct our
business.
Cash Flows
As of December 31, 2022, we had cash and cash
equivalents of approximately $29.0 million. The table below sets forth a summary of our cash flows for the periods indicated:
For the Year
Ended
December 31,
2022
For the Year
Ended
December 31,
2021
Net cash provided by (used in) operating activities
$
(1,211,385
)
$
9,024,887
Net cash provided by (used in) investing activities
$
608,471
$
(2,809,418
)
Net cash provided by financing activities
$
1,000,000
$
2,000,000
Operating Activities
Net cash used in operating activities was approximately
$1.2 million for the year ended December 31, 2022 which was attributable primarily to increase in other receivable from related parties
of approximately $2.7 million which are funds deposited in trust account of our related party Nanjing Jinwang Art Purchase E-commerce
Co., Ltd. ("Nanjing Jinwang") that our customers can withdraw anytime and increase in other receivables and prepaid expenses
of approximately $3.2 million primarily due to $2.7 million advance to third parties, which was short term, non-interest bearing, due
on demand and has been collected by March 22, 2023. Our cash inflow was mainly from net income of approximately $3.2 million and increase
of approximately $1.5 million in accounts payable affected by restricted cash.
Net cash provided by operating activities was
approximately $9.0 million for the year ended December 31, 2021 which was attributable primarily to the net income of approximately $11.4
million. Our cash outflow was mainly from decrease in other receivable from related parties of approximately $1.8 million which are funds
deposited in trust account of our related party Nanjing Jinwang that our customers can withdraw anytime as well as the decrease in accounts
payable of approximately $4.5 million where we paid off more vendors using our funds from operations.
Net cash provided by operating activities was
approximately $6.6 million for the year ended December 31, 2020 which was attributable primarily to the net income of approximately $2.0
million, the increase in depreciation and amortization of approximately $0.3 million, the collection of accounts receivable approximately
$0.8 million, the increase in other receivable from related parties of approximately $1.4 million, and the increase in accounts payable
of approximately $5.3 million as we incurred more cost of revenues and consulting expenses on business development. The cash inflow partially
offset by the increase in other receivables and prepaid expenses of approximately $0.8 million.
Investing Activities
Net cash provided by investing activities was
approximately $0.6 million for the year ended December 31, 2022, which was primarily attributable to the proceed from sale of short term
investment approximately of $24.0 million offset by the purchase of short-terms investment approximately of $22.2 million. We paid approximately
$0.7 million for fixed and intangible assets and invested $0.5 million in Beijing Jiu Yu Ling Jing Technology Co., Ltd. ("JYLJ"),
in whom we acquired 11.875% equity interest.
79
Net cash used in investing activities was approximately
$2.8 million for the year ended December 31, 2021, which was primarily attributable to the purchase of a short-term investment approximately
of $45.0 million which offset with the proceed from sale of short term investment approximately of $42.5 million, and purchase of certificate
of deposit of approximately $3.1 million. In 2020, we made a deposit of approximately $12.6 million on a proposed real estate purchase,
such deposit was subsequently refunded to us in full amount in April 2021 as we decided to purchase another building. We paid approximately
$9.6 million for an office building in Nangjing city having 6,840 square meters of space. We also purchased approximately $0.8 million
of software.
Net cash used in investing activities was approximately
$11.8 million for the year ended December 31, 2020, which was primarily attributable to the deposit of approximately $12.6 million as
we paid a deposit on a proposed real estate purchase, such deposit was subsequently refunded to us in full amount in April 2021 due to
the termination of real estate purchase memorandum of understanding, purchases of a short-term investment of approximately $24.4 million
and purchases of office equipment and intangible assets of approximately $19,000 due to expansion of our operations and partially offset
by the proceed from the sale of such investment of approximately $25.3 million.
Financing Activities
Net cash provided by financing activities was
approximately $1.0 million for the year ended December 31, 2022, which was primarily attributable to the proceeds from a private placement
in 2021.
Net cash provided by financing activities was
approximately $2.0 million for the year ended December 31, 2021, which was primarily attributable to the proceeds from a private placement.
Net cash provided by financing activities was
approximately $18.1 million for the year ended December 31, 2020, which was primarily attributable to the proceeds from initial public
offering.
5C. Research and Development, Patents and Licenses, etc.
See "Item 4. Information on the Company—B. Business Overview—Intellectual
Property."
D. Trend Information
Other than as disclosed
elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1,
2022 to December 31, 2022 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity
or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results
or financial conditions.
E. Critical Accounting Policies and Estimates
Our management's discussion and analysis
of our financial condition and results of operations are based on our consolidated financial statements that have been prepared in accordance
with accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of financial statements
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods.
On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors
that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value
of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions.
80
While our significant accounting policies are
described in Note 2 to our consolidated financial statements included elsewhere in this annual report, we believe that the following accounting
policies are the most critical to aid you in fully understanding and evaluating our management's discussion and analysis:
Principles of consolidation
The consolidated financial statements include
the accounts of the Company, its subsidiaries, the VIE and its wholly owned subsidiaries. All intercompany transactions and balances are
eliminated upon consolidation.
Revenue recognition
The core principle underlying the revenue recognition
standard is that we will recognize revenue to represent the transfer of services to customers in an amount that reflects the consideration
to which we expect to be entitled in such exchange. This will require us to identify contractual performance obligations and determine
whether revenue should be recognized at a point in time or over time, based on when control of services transfers to a customer. Under
the guidance of FASB ASC 606, we are required to (a) identify the contract(s) with a customer, (b) identify the performance obligations
in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract
and (e) recognize revenue when (or as) we satisfy our performance obligation. Revenues are recorded, net of sales related taxes and surcharges.
We continue to derive our revenues from service
contracts with our customers with revenues being recognized upon performance of services. Persuasive evidence of an arrangement is demonstrated
via service contract and invoice; and the consideration to the customer is fixed upon acceptance of the sales contract. At times,
we offer incentives and rebates to our customers directly and we account for these incentives payable to customers as a reduction of contract
price. We have set up a customer point system where the points can be used for services on the trading platform, mainly listing services
fees. The points can also be traded amongst traders on the platform or to settle payments on the platform amongst traders. We assessed
if a material right exists when we issue these points and if the points represent separate performance obligation. In general, if the
points were given to traders based on existing accounts or promotions without the customers having to acquire services from us, therefore
there is no material right and no separate performance obligation exists.
Our revenues are recognized at a point in time
or over time after all performance obligations are satisfied. In addition, we took the practical expedient to recognize the incremental
costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have
recognized is one year or less. Our commission expenses to our sales agents are expensed when incurred.
We are an online provider of collectibles and
artwork e-commerce services, which allows artists and art dealers and owners to access the art trading market with a wider range of artwork
investors through our platforms. We currently facilitate trading by individual and institutional customers of collectibles and artwork
and commodities (mainly teas) on our online platforms.
We generate revenue from our services in connection
with the trading of collectable, artwork and commodities on our platforms, primarily consisting of listing service fees, transaction fees,
marketing services fees and other revenues collected from traders (our customers) and/or owners.
Started in July 2019, we had signed cooperative
agreements with third parties who are experts and possess new ideas and resources for the collectibles/commodities business to co-develop
certain niche markets (such as vintage coins and teas) to be traded on our online platforms. These parties are required to place a security
deposit with us until termination of the cooperative agreements and the deposit amounts increase as the trading volume increases. Revenue
generated from these niche markets will be shared between us and these parties based on pre-agreed rates and trading volume. We accounted
for the portion of revenue that is earned by the third parties as a reduction of total contract revenue to be received from customers.
Approximately $119,000 and nil of revenue generated from these contracts had been recorded as a reduction of revenue and as payables to
these parties for the years ended December 31, 2021 and 2022, respectively.
81
Listing service fees
One-time nonrefundable listing service fees are
collected from traders for listing their products on the platform. Our only performance obligation is to provide the listing on our platform.
We recognize the related revenue upon the completion of our performance obligation which is when the customers' products are successfully
listed on our platforms. The fees are determined by contracts with the customers as a fixed percentage of the listing price. For some
products, we may negotiate a flat rate instead of a percentage of the listing price. For listing service contracts in which the related
performance obligations can be completed within a short period of time, we recognize the related revenue upon the completion of our performance
obligations.
Transaction fee revenue
Transaction fee revenue is generally calculated
based on the transaction value of collectibles, artwork and commodities per transaction. Transaction value is the dollar amount
of the purchase and sale of the collectibles, artwork and commodities after they are listed on our platform. Our performance obligation
is to facilitate the trading transactions. Transaction fee revenue is recognized and collected at the time when the transaction is completed.
Transaction fee revenue also includes predetermined
monthly transaction fees for select traders with large transactions and are negotiated on a case by case basis. Predetermined transaction
fees are recognized and earned over the specified service period.
Predetermined transaction fees received in advance
of the specified service period are recorded as deferred revenue.
In 2018, the Company started a customer reward
points program, pursuant to which reward points were issued for opening a new account or referring customers to open accounts with us
during our promotion period. In that regard, customers are required to redeem certain reward points for new listings along with the regular
listing services fees. If a customer does not own any reward points, he/she can purchase them from other customers on our platform. We
do not record revenue when customers redeem any points as it is considered as a prerequisite for a new listing in addition to the regular
services fees. The points are traded by and among our customers on the platform and we charge a transaction fee from such points trading.
We assessed if a material right existed when we initially issued the reward points and if the reward points represent a separate performance
obligation. In general, the points were given to customers based on existing accounts or promotions without the customers having to acquire
services from the Company, therefore there was no material right and no separate performance obligation exists. Transaction fee revenue
from the trading of points amounted to approximately $3.4 million and $1.1 million for the years ended December 31, 2021 and 2022, respectively.
Marketing service fees
Marketing service fees are usually collected after
we complete our services and includes the following type of services:
(1)
For certain marketing service agreements, we assist our customers in connection with his/her listing and trading of his/her collectible/artwork or commodities on our platform, which mainly includes consultation and supporting services of the marketability for the collectible/artwork or commodities; assessing its market value and market acceptance for the collectible/artwork or commodities; and assisting in the application and legal protection required for the customer's collectible/artwork or commodities to be approved for listing on our platforms. For marketing service contracts in which the related performance obligations can be completed within a short period of time, we recognize the related revenue upon the completion of our performance obligations.
(2)
Marketing service agreements also includes providing promotional services for customers' items as where to place ads on well-known cultural or art exchange websites in China, to provide online and offline marketing services including cooperation with auction houses and participate in industry-related exhibitions and fairs.
The marketing service fees are charged on a fixed
fee basis, which are based on the type of listing session that the customer applies for and whether the customer has listed and sold its
collectible on other platforms before, and they were not tied to the type or value of the underlying collectible, artwork or commodities.
Marketing service contracts and fees are recognized upon the completion of all performance obligations.
82
Other revenues
Other revenues (including $166,325 and $233,157
from related parties for the years ended December 31, 2022 and 2021, respectively) primarily includes other service fees for IT technical
support to customers and revenues from agency recommendation fees. IT technical support fees are negotiated on a case by case basis and
are recognized when the related services have been performed based on the specific terms of the contract. Agency recommendation fees are
mainly training and consulting services provided to certain traders/agents for them to become qualified. Upon completion of the training
and consultation, these qualified traders/agents may introduce our platform and services to potential customers to list their collectibles
and artwork with us for a fee or promote their own products on our platforms. Our performance obligation is completed and revenue is recognized
upon completion of training and related consulting services.
Leases
We adopted FASB ASU 2016-02, "Leases"
(Topic 842) for the year ended December 31, 2021, and elected the practical expedients that does not require us to reassess: (1)
whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3)
initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting
policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to
treat the lease and non-lease components of a lease as a single lease component. Upon adoption, the Company recognized a $34,608
right of use ("ROU") assets and same amount of lease liabilities based on the present value of the future minimum rental payments
of leases, using an incremental borrowing rate of 4.75% based on the duration of lease terms.
Operating lease ROU assets and lease liabilities
are recognized at the adoption date or the commencement date, whichever is earlier, based on the present value of lease payments over
the lease term. Since the implicit rate for our leases are not readily determinable, we used our incremental borrowing rate based on the
information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the
rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a
similar economic environment and over a similar term.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A. Directors and Executive Officers
The following table sets forth information regarding our executive
officers and directors as of the date of this report.
Directors and Executive Officers
Age
Position/Title
Mun Wah Wan
50
Chairman of the Board of Directors
Xi Li
35
Chief Financial Officer
Yi Shao
34
Chief Executive Officer and Director
Nelson (Nam Sum) Wong
(1)(2)(3)
60
Independent Director
Xiaobing Liu
(1)(2)(3)
60
Independent Director
Jinren Chen
(1)(2)(3)
52
Independent Director
(1)
Member of audit committee.
(2)
Member of compensation committee.
(3)
Member of corporate governance
and nominating committee.
83
Biography
Mun Wah (Lewis) Wan
Mr. Wan was appointed as a member of our board
of directors on April 18, 2019 and chairman of our board of directors on May 10, 2019. Since February 2007, Mr. Wan has served as chairman
of the board of directors of HKFAEx Group Limited, one of our principal shareholders, a Hong Kong corporation and securities dealer which
is licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activities of dealing in securities, advising
on securities and asset management, and Mr. Wan is also the sole shareholder of The Pride Group Holdings Limited, which owns 100% equity
interest of HKFAEx Group Limited. Since February 2013, Mr. Wan has served as committee member of Hong Kong Securities and Investment Institute.
Since 2008, Mr. Wan has serviced as the vice president and chairman of China Investment Committee of the China Hong Kong International
Economic Trading Association. From December 2012 to December 2022, Mr. Wan was the visiting professor of Beijing University of International
Business & Economics. From August 2004 to February 2007, Mr. Wan was the director and chief investment officer of Marco Polo Investments
Group Limited. From September 1997 to August 2004, Mr. Wan worked at the Financial Services Division of PricewaterhouseCoopers.
Mr. Wan received his Bachelor Degree of Business
Administration, majoring in Finance, from the Hong Kong University of Science and Technology in November 1997. Mr. Wan is a senior fellow
of the Hong Kong Securities and Investment Institute, a fellow of the Hong Kong Institute of Certified Public Accountants and a fellow
of the Association of Chartered Certified Accountants. We believe that Mr. Wan's extensive experience and leadership in the investment,
business and corporate management will benefit the Company's operations and qualifies him to serve as the chairman of our board
of directors.
Yi Shao
Mr. Shao was appointed as a member of our board
of directors on April 18, 2019 and as our chief executive officer on May 10, 2019. From October 2018 to March 2019, Mr. Shao served as
the general manager of Jiangsu Yanggu Culture Development Co., Ltd. From October 2017 to September 2018, Mr. Shao served as the deputy
general manager of Jiangsu Dahe Live Network Technology Co., Ltd. From October 2015 to October 2017, Mr. Shao worked as a project manager
at Nanjing Cultural and Artwork Property Exchange Co., Ltd. From June 2013 to October 2015, Mr. Shao worked as a software developer at
Marvell Electronic Technology Co., Ltd. Mr. Shao received his Bachelor Degree of electronic information science and technology from Nanjing
University in 2010 and his Master Degree of biomedical engineering from Nanjing University in 2013. We believe that Mr. Shao's extensive
experience in art industry, market development and corporate management will benefit the company's operations and management and
make him an important member of the board of directors and its committees.
Xi Li
Ms. Li was appointed as our Chief Financial Officer
on November 29, 2022. From September 27, 2022 to November 28, 2022, Ms. Li served as the financial manager of the Company. From October
2016 to Jun 2022, Ms. Li served as the financial manager of Golden Wheel Tiandi Holdings Company Limited. From September 2013 to February
2016, Ms. Li was a senior audit associate of KPMG Singapore office and an assistant audit manager of KPMG Shanghai Office. From June 2011
to July 2013, Ms. Li served as an audit associate of Adept Public Accounting Corporation in Singapore. Ms. Li obtained her Bachelor
'
s
Degree of Science in Applied Accounting from Oxford Brookes University (UK) in 2011 and she is a fellow member of Chartered Association
of Certified Public Accountants (ACCA).
Nelson (Nam Sum) Wong
Since 2008, Mr. Wong has served as an Independent
Director and Audit Committee Chair of Recon Technology Ltd. (Nasdaq: RCON). He is Chairman and Managing Director of ACN Worldwide, a business
and investment consultancy established in Hong Kong since 1995. Prior to that, he was Vice Chairman and Chief Executive of Vigers, a Hong
Kong based real estate and investment consultancy, which he first joined in 1990 as a negotiator and later in 1993 acquired together with
his partners. Mr. Wong received his bachelor's degree in English language and literature from the PLA Institute of International
Relations in Nanjing in 1983 and was a college teacher before moving to Hong Kong in 1986 to pursue his career in business.
We believe that Mr. Wong's leadership skills
and extensive management experience as well as his insight in global politics will benefit the Company and make him an important member
of the board of directors and its committees.
84
Jinren Chen
Since January 2020, Mr. Chen has served as Chairman
and President of Nanjing Shuoming Investment Management Co., Ltd., a private equity fund management company. From February 2019 to December
2019, Mr. Chen was the fund manager for Shanghai Rongru Assets Management Co., Ltd. From May 2014 to February 2019, Mr. Chen served as
an industry analyst and then deputy general manager of market making department of Debang Securities Co., Ltd. From May 2001 to April
2014, Mr. Chen served as a researcher and then a senior researcher for Huatai Securities Co, Ltd. Mr. Chen received his bachelor's
degree in International Trade from Nanjing University in 1997. Mr. Chen received his master degree of Engineering Management from Business
School of Hohai University in Nanjing in 2000 and his Ph.D degree in Economics from Business School of Nanjing University in 2009. Mr.
Chen has passed securities practitioner and fund practitioner qualification tests in China. We believe Mr. Chen's extensive experience
in capital market will benefit the Company and make him an important member of the board of directors and its committees.
Xiaobing Liu
Mr. Liu was appointed as a member of our board of directors on May
10, 2019.  Since April 2006, Mr. Liu has been a professor at Nanjing Tech University School of Law. Since June 2022, Mr. Liu has
served as an independent director of the board of Nanjing Yigao Medical Technology Co., Ltd. Since March 2022, Mr. Liu has served as the Dean of the Legislative
Research Institute at Jinling University of Science and Technology. From May 2016 to May 2022, Mr. Liu served
as an independent director of the board of GPRO Titanium Industry Co., Ltd. From September 2012 to September 2018, Mr. Liu served as an
independent director of the board of Nanjing Baotai Special Materials Co., Ltd. From January 2014 to July 2017, Mr. Liu served as the
Dean of Nanjing Tech University School of Law. Mr. Liu received his Bachelor of Law degree from East China University of Political Science
and Law ("ECUPL") in 1983 and his Master's Degree of Legal History from ECUPL in 1986. Mr. Liu received his Doctor's
Degree of Constitution and Administrative Laws from Wuhan University in 2007. Mr. Liu holds a public company independent director qualification
certificate from Shanghai Stock Exchange since November 2011. We believe that Mr. Liu's legal expertise and knowledge will benefit
the Company's business and operations and make him a valuable member of the board of directors and its committees.
6.B. Compensation
During
the fiscal year ended December 31, 2022, we paid an aggregate of approximately RMB0.6 million (US$82,727) in cash to our executive officers,
and paid RMB0.4 million (US$53,640) to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement
or other similar benefits to our executive officers and directors. Our Hong Kong subsidiaries are required by law to make contributions
equal to certain percentages of each employee's salary for his or her mandatory provident fund. Our PRC subsidiary and the variable
interest entity are required by law to make contributions equal to certain percentages of each employee's salary for his or her
pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.
Employment Agreements, Director Agreements and Indemnification Agreements
We have entered into employment agreements with
each of our executive officers. Under these agreements, each of our executive officers is employed for an initial term of one year and
is renewable upon mutual agreement of the Company and the executive officer.
The executive officers are entitled to a fixed
salary and to participate in our equity incentive plan and other company benefits, each as determined by the board of directors from time
to time.
We may terminate the executive officer's
employment for cause, at any time, without notice or remuneration, for certain acts, such as conviction or plea of guilty to a felony
or grossly negligent or dishonest acts to our detriment, or material breach of any term of any employment or other services, confidentiality,
intellectual property or non-competition agreements with the Company. In such case, the executive officer will solely be entitled to accrued
and unpaid salary through the effective date of such termination, and his/her right to all other benefits will terminate, except as required
by any applicable law. The executive officer is not entitled to severance payments upon any termination.
The executive officer may voluntarily terminate
his/her employment for any reason and such termination shall take effect 30 days after the receipt by Company of the notice of termination.
Upon the effective date of such termination, the executive officer shall be entitled to (a) accrued and unpaid salary and vacation through
such termination date; and (b) all other compensation and benefits that were vested through such termination date.  In the event
the executive officer is terminated without notice, it shall be deemed a termination by the Company for cause.
Each of our executive officers has agreed not
to use for his/her personal purposes nor divulge, furnish, or make accessible to anyone or use in any way (other than in the ordinary
course of the business of the Company) any confidential or secret information or knowledge of the Company, whether developed by him/herself
or by others.
In addition, each executive officer has agreed
to be bound by non-competition restrictions during the term of his or her employment and for six months following the last date of employment.
85
Each executive officer also has agreed not to
(i) solicit or induce, on his/her own behalf or on behalf of any other person or entity, any employee of the Company or any of its
affiliates to leave the employ of the Company or any of its affiliates; or (ii) solicit or induce, on his/her own behalf or on behalf
of any other person or entity, any customer or prospective customer of the Company or any of their respective affiliates to reduce its
business with the Company or any of its affiliates.
We have also entered into director agreements
with each of our independent directors which agreements set forth the terms and provisions of their engagement.
In addition, we have entered into indemnification
agreements with each of our directors and executive officers that provide such persons with additional indemnification beyond that provided
in our current memorandum and articles of association.
Share Incentive Plans
The Board of Directors of the Company approved
and adopted Oriental Culture Holding LTD 2021 Omnibus Equity Plan (the "Equity Plan") on November 8, 2021, which was approved
at the stockholders' meeting on December 16, 2021. The total aggregate ordinary shares of the Company authorized for issuance during
the term of the Equity Plan is limited to 4,000,000 shares and none has been granted as of the date of this report.
The following paragraphs summarize the terms of
the Equity Plan:
Administration
. The Equity Plan
requires that a committee of non-employee directors to administer the Equity Plan. Currently, our Compensation Committee, which we refer
to hereto as the Committee, administers the Equity Plan.
Shares Subject to the Equity Plan
.
The shares issuable under the Equity Plan are our ordinary shares that are authorized but unissued or reacquired ordinary shares, including
shares repurchased by the Company as treasury shares. The total aggregate ordinary shares of the Company authorized for issuance during
the term of the Equity Plan is limited to 4,000,000 shares.
Types of Awards and Eligibility
.
The Equity Plan provides for five types of awards and they are: Stock Options, Stock Appreciation Rights ("SAR"), Unrestricted
Stock, Restricted Stock and Restricted Stock Units. The Eligible Persons under the Equity Plan include Employees, Outside Directors, Consultants
and New Hires of the Company or its subsidiaries, as selected by our Board or the designated committee thereof.
Vesting and Forfeiture
.
The
Committee determines the time and conditions under which the award will vest or the period of time after which the restriction shall lapse
as part of making an award. Vesting or the lapse of the period of restriction may, in the Committee's discretion, be based solely
upon continued employment or service for a specified period of time, or may be based upon the achievement of specific performance goals
(individual, corporation or other basis), or both. Unless otherwise provided by the Committee, when a participant terminates employment
or service with us, all unexercised or unvested awards are forfeited, and if the termination is without cause, all outstanding vested
options and SARs will continue to be exercisable until the earlier of the expiration term or the date that is three months after such
termination date.
Prohibition on Repricing
. Except
as required or permitted pursuant to a corporate transaction (including, without limitation, any recapitalization or reorganization),
in no event will an option or SAR be amended to reduce the exercise or base price or be canceled in exchange for cash, other awards or
options or SARs with an exercise price or base price less than the exercise price of the original option or base price of the original
SAR without shareholder approval.
Limits on Transfers of Awards/Beneficiary
Designation
. All awards are exercisable only by the participant during the participant's lifetime, and are transferable
only by will or by the laws of descent and distribution; provided, however, that the Committee may permit a transfer of an award, other
than an incentive stock option, to a family member of an individual, subject to such restrictions as the Committee may provide.
Term.
The Equity Plan is effective
immediately upon the adoption by our Board of Directors, subject to shareholder approval, and will terminate on the earliest to occur
of (i) the 10th anniversary of the Equity Plan's effective date, or (ii) the date on which all shares available for issuance
under the Equity Plan shall have been issued as fully-vested shares.
86
6.C. Board Practices
Terms of Directors and Officers
Our officers are elected by and serve at the discretion
of the Board. Our directors may be elected by an ordinary resolution of our shareholders. Alternatively, our board of directors may, by
the affirmative vote of a simple majority of the directors present and voting at a board meeting appoint any person as a director to fill
a casual vacancy on our board. Our directors are not subject to a set term of office and hold office until the next general meeting called
for the election of directors and until their successor is duly elected or such time as they die, resign or are removed from office by
a shareholders' ordinary resolution or the unanimous written resolution of all shareholders. A director will be removed from office
automatically if, among other things, the director becomes bankrupt or makes any arrangement or composition with his creditors generally
or is found to be or becomes of unsound mind.
Board Diversity Matrix
The
following table sets forth Board level diversity statistics based on self-identification of members of our Board as of April 26, 2023.
Board
                                            Diversity Matrix (As of April 26, 2023)
Country of Principal Executive Offices:
P.R. China
Foreign Private Issuer:
Yes
Disclosure Prohibited Under Home Country Law:
No
Total Number of Directors
5
Female
Male
Non-Binary
Did Not
Disclose
Gender
Part I: Gender Identity
Directors
0
5
0
0
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
0
LGBTQ+
0
Did Not Disclose Demographic Background
0
87
Our board of directors currently
consists of 5 directors. We have established an audit committee, a compensation committee and a corporate governance and nominating committee.
Each of the committees of the board of directors has the composition and responsibilities described below.
Audit Committee
Nelson Wong
,
Xiaobing Liu and Jinren Chen
are the members of our audit committee, and Nelson Wong serves as the chairman. All members of our audit committee satisfy the independence
standards promulgated by the SEC and by NASDAQ as such standards apply specifically to members of audit committees.
We have adopted and approved a charter for the
audit committee. In accordance with our audit committee charter, our audit committee shall perform several functions, including:
●
evaluates the independence and performance of, and assesses the qualifications of, our independent auditor, and engages such independent auditor;
●
approves the plan and fees for
the annual audit, interim reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided
by the independent auditor;
●
monitors the independence of the
independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law;
●
reviews the financial statements
to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors
the results of the annual audit and reviews of our interim financial statements;
●
oversees all aspects our systems
of internal accounting control and corporate governance functions on behalf of the board;
●
reviews and approves in advance
any proposed related-party transactions and report to the full board on any approved transactions; and
●
provides oversight assistance
in connection with legal, ethical and risk management compliance programs established by management and the board of directors, including
Sarbanes-Oxley Act implementation, and makes recommendations to the board of directors regarding corporate governance issues and policy
decisions.
Our board of directors has determined that Nelson
Wong possesses accounting or related financial management experience that qualifies him as an "audit committee financial expert"
as defined by the rules and regulations of the SEC.
Compensation Committee
Nelson Wong
,
Xiaobing Liu and Jinren Chen
are the members of our compensation committee and Jinren Chen serves as the chairman.  All members of our compensation committee
are qualified as independent under the current definition promulgated by NASDAQ. We have adopted a charter for the compensation committee. In
accordance with the compensation committee's charter, the compensation committee is responsible for overseeing and making recommendations
to the board of directors regarding the salaries and other compensation of our executive officers and general employees and providing
assistance and recommendations with respect to our compensation policies and practices. The compensation committee is responsible
for, among other things:
●
To approve compensation principles that apply generally to Company employees;
●
To make recommendations to the board of directors with respect to incentive compensation plans and equity-based plans taking into account the results of the most recent rules to provide the shareholders with an advisory vote on executive compensation, generally known as "Say on Pay Votes" (Section 951 in The Dodd-Frank Wall Street Reform and Consumer Protection Act), if any;
●
To administer and otherwise exercise the various authorities prescribed for the compensation committee by the Company's incentive compensation plans and equity-based plans;
●
To select a peer group of companies against which to benchmark/compare the Company's compensation systems for principal officers elected by the board of directors;
●
To annually review the Company's compensation policies and practices and assess whether such policies and practices are reasonably likely to have a material adverse effect on the Company;
●
To determine and oversee stock ownership guidelines and stock option holding requirements, including periodic review of compliance by principal officers and members of the board of directors.
88
Corporate Governance and Nominating Committee
Nelson Wong
,
Xiaobing Liu and Jinren Chen
are the members of our corporate governance and nominating committee and Xiaobing Liu serves as the chairman.  All members of
our corporate governance and nominating committee are qualified as independent under the current definition promulgated by NASDAQ. We
have adopted a charter for the corporate governance and nominating committee. In accordance with its charter, the corporate governance
and nominating committee is responsible for identifying and proposing new potential director nominees to the board of directors for consideration
and reviewing our corporate governance policies. The corporate governance and nominating committee is responsible for, among other things:
●
Identify and screen individuals qualified to become board members consistent with the criteria approved by the board of directors, and recommend to the board of directors director nominees for election at the next annual or special meeting of shareholders at which directors are to be elected or to fill any vacancies or newly created directorships that may occur between such meetings;
●
Recommend directors for appointment to board committees;
●
Make recommendations to the board of directors as to determinations of director independence;
●
Oversee the evaluation of the board of directors;
●
Make recommendations to the board of directors as to compensation for the Company's directors; and
●
Review and recommend to the board of directors the Corporate Governance Guidelines and Code of Business Conduct and Ethics for the Company.
Director Independence
Our board of directors reviewed the materiality
of any relationship that each of our proposed directors has with us, either directly or indirectly. Based on this review, it is determined
that Nelson Wong
,
Xiaobing Liu and Jinren Chen are the "independent directors" as defined by NASDAQ.
6.D. Employees
As of December 31, 2022, December 31, 2021 and
December 31, 2020, we had a total of 57, 51 and 47 full time employees, respectively. The following table sets forth the breakdown of
our employees' functions as of December 31, 2022:
Function
Number*
% of Total
Employees
Technology and Research
21
36.84
%
Sales & Marketing
17
29.83
%
General & HR and Administration
19
33.33
%
57
100.00
%
*
excluding the employees of Zhongcang
Warehouse Co., Ltd., an 18% indirect subsidiary of Jiangsu Yanggu, the VIE.
As of December 31, 2022, 54 of our employees were
based in Mainland China and 3 employees were located in Hong Kong.
We understand that our success depends on our
ability to attract, train and retain our employees. Therefore, as part of our human resources strategy, we offer employees competitive
salaries, performance-based cash bonuses and promotions, engagement activities, various welfare as well as other incentives. We design
and provide training to our employees regularly in order to enhance their professional skills and foster their career development. We
also recognize the importance of keeping our employees safe. In response to the COVID-19 pandemic, we implemented changes that we determined
were in the best interest of our employees and have followed local government orders to prevent the spread of COVID-19.
89
As required by PRC regulations, we participate
in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical
insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident
fund. We are required under PRC law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses
and certain allowances of our employees, up to a maximum amount specified by the local government from time to time. As of the date of
this report, we have made adequate employee benefit payments. However, if we were found by the relevant authorities that we failed to
make adequate payment, we may be required to make up the contributions for these plans as well as to pay late fees and fines. See
"Risk
Factors—Risks Related to Doing Business in China—Failure to make adequate contributions to various employee benefit plans
as required by PRC regulations may subject us to penalties."
As required by Hong Kong laws and regulations,
we contribute to the Mandatory Provident Fund and take out insurance policies for our Hong Kong-based employees.
We enter into standard labor and confidentiality
agreements with our employees. We believe that we maintain a good working relationship with our employees, and we have not experienced
any major labor disputes.
6.E. Share Ownership
The following table sets forth information
with respect to the beneficial ownership of our ordinary shares as of April 26, 2023 for:
●
each beneficial owner of 5% or more of our outstanding ordinary shares;
●
each of our directors and executive officers; and
●
all of our directors and executive officers as a group.
Beneficial ownership is determined in accordance
with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting
power or investment power with respect to those securities and include ordinary shares issuable upon the exercise of options that are
immediately exercisable or exercisable within 60 days of the date hereof.
Except as otherwise indicated, all of the shares
reflected in the table are ordinary shares and all persons listed below have sole voting and investment power with respect to the shares
beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial
ownership for any other purpose.
The calculations in the table below are based
on 21,226,992 ordinary shares issued and outstanding as of the date of April 26, 2023.
Except as otherwise indicated in the table below,
addresses of our directors, executive officers and named beneficial owners are in care of Oriental Culture Holding LTD, Room 1402, Richmake
Commercial Building, 198-200 Queen's Road Central, Hong Kong. Our telephone number at this address is (852) 2110-3909.
Ordinary Shares
Beneficially Owned
Name of Beneficial Owners
Number
%
Directors and Executive Officers:
Mun Wah Wan
(1)
1,394,442
6.6
Yi Shao
(2)
400,540
1.9
Xi Li
-
-
Nelson Wong
-
-
Xiaobing Liu
-
-
Jinren Chen
-
-
5% or Greater Shareholders:
HKFAEx Group Limited
(1)
1,394,442
6.6
Oriental Culture Investment Development LTD
(3)
2,450,000
11.5
Oriental Culture Investment Communication LTD
(4)
2,450,000
11.5
All directors and executive officers as a group (six individuals)
1,794,982
8.5
(1)
Mun Wah Wan, chairman of our board
of directors, is the sole shareholder of The Pride Group Holdings Limited, a British Virgin Islands company, which owns 100% equity interest
of HKFAEx Group Limited. Mr. Wan is also the chairman of the board of directors of HKFAEx Group Limited, a Hong Kong corporation and
securities dealer which is licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activities of dealing
in securities, advising on securities and asset management, and holds the voting and dispositive power over the ordinary shares held
by it. The registered address of HKFAEx Group Limited is Unit 909, Level 9, Cyberport 2, Hong Kong. The registered address of The Pride
Group Holdings Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town Tortola, VG1110, British Virgin Islands.
90
(2)
Yi Shao, our chief executive officer and a member of our board of directors, is the shareholder and director of Oriental Culture Investment Diffusion LTD, a British Virgin Islands company, and holds the voting and dispositive power over the ordinary shares held by it. The registered address of Oriental Culture Investment Diffusion LTD is situated at offices of Sertus Incorporations (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands.
(3)
Aimin Kong is the sole shareholder and director of Oriental Culture Investment Development LTD, a British Virgin Islands company, and holds the voting and dispositive power over the ordinary shares held by it. The registered address of Oriental Culture Investment Development LTD is situated at offices of Sertus Incorporations (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands.
(4)
Huajun Gao is the sole shareholder and director of Oriental Culture Investment Communication LTD, a British Virgin Islands company, and holds the voting and dispositive power over the ordinary shares held by it. The registered address of Oriental Culture Investment Communication LTD is situated at offices of Sertus Incorporations (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A. Major Shareholders
See Item 6.E., "Share Ownership,"
for a description of our major shareholders.
7.B. Related Party Transactions
Variable Interest Entity Arrangements
See "
Item 4. Information on the Company—C.
Organizational Structure
."
Employment Agreements, Director Agreements and Indemnification Agreements
See "
Item 6. Directors, Senior Management
and Employees—B. Compensation of Directors and Executive Officers—Employment Agreements, Director Agreements and Indemnification
Agreements.
"
91
a. Accounts receivable – related parties consist of the following:
Relationship
Nature
December 31,
2022
December 31,
2021
Nanjing Culture Exchange Art Property Exchange Co., Ltd. ("Nanjing Culture")
Mr. Huajun Gao, the general manager and director of Nanjing Culture, and Mr. Aimin Kong, the vice chairman of Nanjing Culture, each beneficially owns 11.5% shares of the Company
Receivable from technological service fee revenue
$
16,345
$
6,070
Jinling Cultural Property Exchange Co., Ltd.("Jinling Cultural")
Its major shareholder is also a major shareholder of Jiangsu Yanggu
Receivable from technological service fee revenue
12,966
2,023
Total
$
29,311
$
8,093
b. Accounts payable – related parties consist of the following:
Relationship
Nature
December 31,
2022
December 31,
2021
Kashi Jinwang Art Purchase E-commerce Co., Ltd.
100% owned by Nanjing Jinwang Art Purchase E-commerce Co., Ltd., a related party of the Company
Payable for online advertising expenses
-
1,665
Zhongcang Warehouse Co., Ltd.
An 18% subsidiary of the VIE of the Company
Payable for storage fees
28,727
-
Total
$
28,727
$
1,665
c. Other payables – related
parties consist of the following:
Other payables – related parties are those
nontrade payables arising from transactions between the Company and its related parties, such as payments paid on behalf of the Company.
Relationship
December 31,
2022
December 31,
2021
Mun Wah Wan
Chairman of the board of directors of the Company
3,262
-
Total
$
3,262
$
-
92
d. Net revenues – related parties consist
of the following:
Relationship
Nature
For the Year Ended
December 31,
2022
For the Year Ended
December 31,
2021
For the Year Ended
December 31,
2020
Nanjing Culture
Mr. Huajun Gao, the general manager and director of Nanjing Culture, and Mr. Aimin Kong, the vice chairman of Nanjing Culture, each beneficially owns 11.5%  shares of the Company
Technological service fee revenue
$
29,934
$
38,959
$
41,571
Jinling Cultural
It is owned by our 11.5% beneficial shareholder, Huajun Gao
Technological service fee revenue
21,542
22,519
21,042
Hunan Huaqiang Artwork Trading Center Co., Ltd.
49% owned by Jinling Cultural
Technological service fee revenue
17,091
21,821
20,390
Nanjing Jinwang Art Purchase E-commerce Co., Ltd.(Nanjing Jinwang)
It is owned by Huajun Gao and Aimin Kong, each a 11.5% beneficial shareholder of the Company
Technological service fee revenue
-
17,813
-
Kashi Jinwang Art Purchase E-commerce Co., Ltd.
100% owned by Nanjing Jinwang
Technological service fee revenue
97,758
132,045
130,169
Total
$
166,325
$
233,157
$
213,172
e. Cost of revenues – related party consists of the following:
Relationship
Nature
For the Year Ended
December 31,
2022
For the Year Ended
December 31,
2021
Zhongcang Warehouse Co., Ltd.
An 18% subsidiary of the VIE of the Company
Storage fees
$
304,400
$
730,006
f. Selling and marketing expenses – related
party consists of the following:
Relationship
Nature
For the Year Ended
December 31,
2022
For the Year Ended
December 31,
2021
Kashi Jinwang Art Purchase E-commerce Co., Ltd.
100% owned by Nanjing Jinwang.
Online advertising expenses
$
43,590
$
359,967
In 2019, the Company entered into advertising
contract with Kashi Jinwang Art Purchase E-commerce Co., Ltd. pursuant to which the Company would use advertising space on Kashi Jinwang's
website from January 1, 2019 to December 31, 2022. The Company was charged a yearly advertising fee of approximately $0.18 million per
year adjustable by actual usage, which was approximately 1.7% of the Company's initial listing value of collectible or artwork at
the time when the contract was entered. On May 1, 2020, the contract between the Company and Kashi Jinwang Art Purchase E-commerce Co.,
Ltd. was amended and the monthly advertising fee was fixed at 1.5% of the initial listing value of collectible or artwork from May 1,
2020 to December 31, 2022. The contract was further amended on June 25, 2020, pursuant to which the fee will be 2.25% of the initial listing
value of collectibles or artwork from July 1, 2020 to December 31, 2020, then return back to 1.5% from January 1, 2021 to December 31,
2022.
g. During the year ended December 31, 2022 and
2021, HKDAEx paid approximately $51,000 and $65,000, respectively, to HKFAEx, a company owned by our Chairman for accounting and business
administration services.
h. The Company entered into a non-cancellable
Office Premises Use Contract with Nanjing Culture for an office space from January 1, 2020 to December 31, 2020 with a monthly
rental of approximately $14,000 including VAT taxes. The Company renewed the lease under the same terms from January 1, 2021 to December
31, 2021 and then renewed again to December 31, 2022. Total rental expense for the years ended December 31, 2022 and 2021 amounted to
approximately $151,000 and $158,000, respectively.
i. Other receivables – related party consist
of funds which are held in trading platform trust account entrusted with Nanjing Jinwang. The funds are unrestricted as to immediate
withdrawal and use after the Company's customers completed the necessary administrative procedures from the platform. The Company
normally make withdraw monthly. As of March 22, 2023, approximately RMB 6.0 million (US$ 0.9 million) was returned to the Company.
7.C. Interests of Experts and Counsel
Not applicable.
93
ITEM 8. FINANCIAL INFORMATION
Consolidated Statements and Other Financial Information
The financial statements required by this item
may be found at the end of this Annual Report on 20-F, beginning on page F-1.
Legal Proceedings
We are currently not involved in any material
legal or administrative proceedings. From time to time, we may be subject to various legal or administrative claims and proceedings arising
in the ordinary course of business. Such legal or administrative claims and proceedings, even if without merit, could result in the expenditure
of financial and management resources and potentially result in civil liability for damages.
Dividends
We have not previously declared or paid cash dividends
and we have no plan to declare or pay any dividends in the near future on our ordinary shares. We currently intend to retain most, if
not all, of our available funds and any future earnings to operate and expand our business.
We are a holding company incorporated in the Cayman
Islands. We rely principally on dividends from our PRC and Hong Kong subsidiaries for our cash requirements, including any payment of
dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See "
PRC
Laws and Regulations Relating to Foreign Exchange—Dividend Distribution.
"
Our board of directors has discretion as to whether
to distribute dividends, subject to applicable laws. Even if our board of directors decides to pay dividends, the form, frequency and
amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual
restrictions and other factors that the board of directors may deem relevant. Cash dividends on our ordinary shares, if any, will be paid
in U.S. dollars.
No Significant Changes
Except as disclosed elsewhere in this annual report, no
other significant changes to our financial condition have occurred since the date of the annual financial statements contained herein.
ITEM 9. THE OFFER AND LISTING
9.A. Offer and Listing Details
Our ordinary shares are listed for trading on
the NASDAQ Capital Market under the symbol "OCG." The shares began trading on December 15, 2020 on the NASDAQ Capital Market.
9.B. Plan of Distribution
Not Applicable.
9.C. Markets
Our ordinary shares have been listed on the Nasdaq
Capital Market since December 15, 2020 under the symbol "OCG".
9.D. Selling Shareholders
Not Applicable.
9.E. Dilution
Not Applicable.
9.F. Expenses of the Issuer
Not Applicable.
ITEM 10. ADDITIONAL INFORMATION
10.A. Share Capital
Not Applicable.
94
10.B. Memorandum and Articles of Association
We are a Cayman Islands exempted company limited
by shares and our affairs are governed by our current memorandum and articles of association and the Companies Act (As Revised) of the
Cayman Islands, which we refer to as the "Companies Act" below, and the common law of the Cayman Islands.
Our authorized share capital is $50,000.00 divided
into 1,000,000,000 shares comprising of (i) 900,000,000 ordinary shares of a nominal or par value of $0.00005 each; and (ii) 100,000,000
preferred shares of a nominal or par value of $0.00005 each.  As of April 27, 2023, 21,226,992 ordinary shares are outstanding
and no preferred share is issued or outstanding.
Our shareholders adopted our current amended and
restated memorandum and articles of association by way of a special resolution on November 8, 2019.
Our registered office in the Cayman Islands is
located at Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands
According to clause 3 of our current amended and
restated memorandum of association, the objects for which the Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by The Companies Act (As Amended) or as the same may be amended from time to
time, or any other law of the Cayman Islands.
The following are summaries of material provisions
of our current memorandum and articles of association, insofar as they relate to the material terms of our ordinary shares.
Board of Directors
See "
Item 6. Directors, Senior Management
and Employees
."
Ordinary Shares
Dividends.
Subject to any rights
and restrictions of any other class or series of shares, our board of directors may, from time to time, declare dividends on the shares
issued and authorize payment of the dividends out of our lawfully available funds. No dividends shall be declared by the board out of
our company except the following:
●
profits; or
●
"share premium account," which represents the excess of the price paid to our company on issue of its shares over the par or "nominal" value of those shares, which is similar to the U.S. concept of additional paid in capital.
However, no dividend shall bear interest against
the Company.
Voting Rights.
The holders of
our ordinary shares are entitled to one vote per share, including the election of directors. Voting at any meeting of shareholders is
by show of hands unless a poll is demanded. On a show of hands every shareholder present in person or by proxy shall have one vote.  On
a poll every shareholder entitled to vote (in person or by proxy) shall have one vote for each share for which he/she is the holder. A
poll may be demanded by the chairman or one or more shareholders present in person or by proxy holding not less than 10 percent of the
paid up share capital of the Company entitled to vote. A quorum required for a meeting of shareholders consists of shareholders who hold
at least one-third of our issued and outstanding shares entitled to vote at the meeting present in person or by proxy and that any holder
of shares of the class present in person or by proxy may demand a poll. While not required by our articles of association, a proxy form
will accompany any notice of general meeting convened by the directors to facilitate the ability of shareholders to vote by proxy.
95
Any ordinary resolution to be made by the shareholders
requires the affirmative vote of a simple majority of the votes of the issued and outstanding ordinary shares cast in a general meeting,
while a special resolution requires the affirmative vote of no fewer than two-thirds of the votes of the issued and outstanding ordinary
shares cast. Under Cayman Islands law, some matters, such as amending the memorandum and articles, changing the name or resolving to be
registered by way of continuation in a jurisdiction outside the Cayman Islands, require approval of shareholders by a special resolution.
There are no limitations on non-residents or foreign
shareholders in the current memorandum and articles to hold or exercise voting rights on the ordinary shares imposed by foreign law or
by the charter or other constituent document of our company. However, no person will be entitled to vote at any general meeting or at
any separate meeting of the holders of the ordinary shares unless the person is registered as of the record date for such meeting and
unless all calls or other sums presently payable by the person in respect of ordinary shares in the Company have been paid.
Winding Up; Liquidation.
Upon
the winding up of our company, after the full amount that holders of any issued shares ranking senior to the ordinary shares as to distribution
on liquidation or winding up are entitled to receive has been paid or set aside for payment, the holders of our ordinary shares are entitled
to receive any remaining assets of the Company available for distribution as determined by the liquidator. The assets received by the
holders of our ordinary shares in a liquidation may consist in whole or in part of property, which is not required to be of the same kind
for all shareholders.
Calls on Ordinary Shares and Forfeiture of
Ordinary Shares.
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their
ordinary shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. Any ordinary
shares that have been called upon and remain unpaid are subject to forfeiture.
Redemption of Ordinary Shares.
We
may issue shares that are, or at its option or at the option of the holders are, subject to redemption on such terms and in such manner
as it may, before the issue of the shares, determine. Under the Companies Act, shares of a Cayman Islands exempted company may be redeemed
or repurchased out of profits or share premium of the company, provided the current memorandum and articles authorize this and it has
the ability to pay its debts as they come due in the ordinary course of business.
No Preemptive Rights.
Holders
of ordinary shares will have no preemptive or preferential right to purchase any securities of our company.
Variation of Rights Attaching to Shares.
If
at any time the share capital is divided into different classes of shares, the rights attaching to any class (unless otherwise provided
by the terms of issue of the shares of that class) may, subject to the current memorandum and articles, be varied or abrogated with the
consent in writing of the holders of all of the issued shares of that class or with the sanction of an ordinary resolution passed at a
general meeting of the holders of the shares of that class.
Anti-Takeover Provisions.
Some provisions
of our current memorandum and articles of association may discourage, delay or prevent a change of control of our company or management
that shareholders may consider favorable, including provisions that authorize our board of directors to issue preferred shares in one
or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further
vote or action by our shareholders.
However, under Cayman Islands law, our directors
may only exercise the rights and powers granted to them under our current memorandum and articles of association for a proper purpose
and for what they believe in good faith to be in the best interests of our company.
Transfer of Shares.
Subject to certain
restriction in the articles of association as may be applicable, any shareholder may transfer all or any of its shares by an instrument
in writing in any usual or common form or any other form which the Board of Directors may approve or on behalf of the transferor and if
in respect of a nil or partly paid up share or if so required by the Board of Directors shall also be executed on behalf of the transferee
and shall be accompanied by the certificate of the shares to which it relates and such other evidence as the Board of Directors may reasonably
require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain a holder of the share until
the name of the transferee is entered in the Register of Members/Shareholders in respect thereof.
96
The Board of Directors may in their absolute discretion
to decline to register any transfer of any share, whether or not it is a fully paid share, without assigning any reason for so doing.
If the Board of Directors refuse to register a transfer, they shall within 2 months of the date on which the transfer was lodged with
the Company send to the transferor and transferee notice of the refusal.
All instruments of transfer which shall be registered
shall be retained by the Company, but any instrument of transfer which the Board of Directors may decline to register shall (except in
any case of fraud) be returned to the person depositing the same.
The registration of transfers may be suspended
at such times and for such periods as the Board of Directors may from time to time determine, provided always that such registration shall
not be suspended for more than 45 days in any year.
Inspection of Books and Records
Holders of our shares have no general right under
Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records (other than our memorandum and articles
of association and any special resolutions passed by our shareholders, and the register of mortgages and charges of our company).
General Meeting of Shareholders.
Shareholders'
meetings may be convened by our board of directors. Advance notice of at least seven (7) calendar days is required for the convening
of our annual general shareholders' meeting and any other general meeting of our shareholders. No business shall be transacted at
any general meeting unless a quorum of shareholders is present at the time when the meeting proceeds to business. Save as otherwise provided
by the articles of association, a quorum shall consist of one or more shareholders present in person or by proxy holding at least one-third
(1/3) of the paid up voting share capital of the Company.
Exempted Company.
We are an exempted company
with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies.
Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered
as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted
company:
●
does not have to file an annual return of its shareholders with the Registrar of Companies;
●
is not required to open its register of members for inspection;
●
does not have to hold an annual general meeting;
●
may issue shares with no par value;
●
may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
●
may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
●
may register as a limited duration company; and
●
may register as a segregated portfolio company.
"Limited liability" means that the
liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances,
such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which
a court may be prepared to pierce or lift the corporate veil).
97
Preferred Shares
The Directors may authorise the division of shares into any number of Classes and the different Classes shall be authorised, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Directors or by an Ordinary Resolution. The Directors may issue shares with such preferred or other rights, all or any of which may be greater than the rights of Ordinary Shares, at such time and on such terms as they may think appropriate. The Directors may issue from time to time, out of the authorised share capital of the Company (other than the authorised but unissued Ordinary Shares), series of preferred shares in their absolute discretion and without approval of the shareholders; provided, however, before any preferred shares of any such series are issued, the Directors shall by resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including:.
(a)
the
designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different
from the par value thereof;
(b)
whether
the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms
of such voting rights, which may be general or limited;
(c)
the
dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions
and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends
payable on any shares of any other class or any other series of shares;
(d)
whether
the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions
of such redemption;
(e)
whether
the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the Members
upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference
shall bear to the entitlements of the holders of shares of any other class or any other series of shares;
(f)
whether
the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for
retirement or other corporate purposes and the terms and provisions relative to the operation thereof;
(g)
whether
the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of
preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method,
if any, of adjusting the same, and any other terms and conditions of conversion or exchange;
(h)
the
limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends
or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing shares
or shares of any other class of shares or any other series of preferred shares;
(i)
the
conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares, including
additional shares of such series or of any other class of shares or any other series of preferred shares; and
(j)
any
other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions
thereof;
and, for such purposes, the Directors
may reserve an appropriate number of shares for the time being unissued.
98
10.C. Material Contracts
We have not entered into any material contracts
other than in the ordinary course of business and other than those described in this annual report.
10.D. Exchange Controls
Cayman Islands
Currently there is no exchange control regulations
in the Cayman Islands applicable to us and shareholders.
Hong Kong
There are no foreign exchange controls in Hong
Kong and there is a free flow of capital into and out of Hong Kong. There are no restrictions on remittances of H.K. dollar or any other
currency from Hong Kong to persons not resident in Hong Kong for the purpose of paying dividends or otherwise.
PRC
See "
Item 4. Information on the Company—B.
Business Overview—Regulation—PRC Laws and Regulations Relating to Foreign Exchange
" for exchange controls in China.
10.E. Taxation
The following summary of the material Cayman Islands,
PRC, Hong Kong and U.S. tax consequences of an investment in our ordinary shares is based upon laws and relevant interpretations thereof
in effect as of the date hereof, all of which are subject to change, possibly with retroactive effect. This summary is not intended to
be, nor should it be construed as, legal or tax advice and is not exhaustive of all possible tax considerations. This summary also does
not deal with all possible tax consequences relating to an investment in our ordinary shares, such as the tax consequences under state,
local, or under the tax laws of jurisdictions other than the Cayman Islands, PRC, Hong Kong and the United States. Investors should consult
their own tax advisors with respect to the tax consequences of the acquisition, ownership and disposition of our ordinary shares.
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on
individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax
or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties
which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not
party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations
or currency restrictions in the Cayman Islands.
Payments of dividends and capital in respect of
the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital
to any holder of the shares, nor will gains derived from the disposal of the shares be subject to Cayman Islands income or corporation
tax.
No stamp duty is payable in respect of the issue
of the shares or on an instrument of transfer in respect of a share.
People's Republic of China Taxation
Under the EIT Law, an enterprise established outside
the PRC with a "de facto management body" within the PRC is considered a PRC resident enterprise for PRC enterprise income
tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income as well as tax reporting obligations.
Under the Implementation Rules, a "de facto management body" is defined as a body that has material and overall management
and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise. In
addition, SAT Circular 82 issued in April 2009 specifies that certain offshore-incorporated enterprises controlled by PRC enterprises
or PRC enterprise groups will be classified as PRC resident enterprises if all of the following conditions are met: (a) senior management
personnel and core management departments in charge of the daily operations of the enterprises have their presence mainly in the PRC;
(b) their financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) major
assets, accounting books and company seals of the enterprises, and minutes and files of their board's and shareholders' meetings
are located or kept in the PRC; and (d) half or more of the enterprises' directors or senior management personnel with voting
rights habitually reside in the PRC. Further to SAT Circular 82, the SAT issued SAT Bulletin 45, which took effect in September 2011,
to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details
of determination on PRC resident enterprise status and administration on post-determination matters. If the PRC tax authorities determine
that the Company is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could
follow. For example, Jiangsu Yanggu may be subject to enterprise income tax at a rate of 25% with respect to its worldwide taxable income.
Also, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise shareholders and with respect to gains derived
by our non-PRC enterprise shareholders from transferring our shares or ordinary shares and potentially a 20% of withholding tax would
be imposed on dividends we pay to our non-PRC individual shareholders and with respect to gains derived by our non-PRC individual shareholders
from transferring our shares or ordinary shares.
99
It is unclear whether, if we are considered a
PRC resident enterprise, holders of our shares or ordinary shares would be able to claim the benefit of income tax treaties or agreements
entered into between China and other countries or areas. See "
Risk Factors—Risk Factors Relating to Doing Business in China—If
we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences
to us and our non-PRC shareholders
."
The SAT issued SAT Circular 59 together with the
Ministry of Finance in April 2009 and SAT Circular 698 in December 2009. Both SAT Circular 59 and SAT Circular 698 became effective retroactively
as of January 1, 2008, and Circular 7 replaced of some of the existing rules in Circular 698, effective in February 2015.  On
October 17, 2017, the SAT promulgated Bulletin 37, and Circular 698 was replaced with effect from December 1, 2017. Under Circular 7,
where a non-resident enterprise conducts an "indirect transfer" by transferring taxable assets, including, in particular,
equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident
enterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the relevant
tax authority such indirect transfer. Using a "substance over form" principle, the PRC tax authority may disregard the existence
of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding
or deferring PRC tax. We and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or
being taxed, under Circular 59 or Circular 7 and Bulletin 37, and may be required to expend valuable resources to comply with Circular
59, Circular 7 and Bulletin 37 or to establish that we and our non-resident enterprises should not be taxed under these circulars. In
addition, in accordance with the Individual Income Tax Law promulgated by the Standing Committee of NPC late amended on August 31, 2018
and become effective on January 1, 2019, where an individual carries out other arrangements without reasonable business purpose and obtains
improper tax gains, the tax authorities shall have the right to make tax adjustment based on a reasonable method, and levy additional
tax and collect interest if there is a need to levy additional tax after making tax adjustments. As a result, our beneficial owners, who
are PRC residents, may be deemed to have carried out other arrangements without reasonable business purpose and obtains improper tax gains
for such indirect transfer, and thus be levied tax. See "
Risk Factors—Risk Factors Relating to Doing Business in China—Enhanced
scrutiny
over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we
may pursue in the future
."
Pursuant to the Arrangement between the Mainland
China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Tax Arrangement,
where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise,
the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced
to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority. Pursuant to the Notice of the State Administration
of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or Circular 81, a resident enterprise
of the counter-party to such Tax Arrangement should meet the following conditions, among others, in order to enjoy the reduced withholding
tax under the Tax Arrangement: (i) it must directly own the required percentage of equity interests and voting rights in such PRC
resident enterprise; and (ii) it should directly own such percentage in the PRC resident enterprise anytime in the 12 months prior
to receiving the dividends. Furthermore, pursuant to the Administrative Measures for Non-Resident Taxpayers to Enjoy the Treaty Treatment,
or the Administrative Measures, which became effective in January 2020, in order to enjoy the reduced withholding tax rate under the treaty
treatment, non-resident taxpayers who meet the conditions for treaty treatment by their own judgment, may declare that they are entitled
to the treaty treatment and accept the post-declaration supervision by the tax authority at the time of filing the tax return or at the
time of providing information to the tax withholding agent. There are also other conditions for enjoying such reduced withholding tax
rate according to other relevant tax rules and regulations. Accordingly, Jiangsu Yanggu may be able to enjoy the 5% withholding tax
rate for the dividends it receives from the WFOE, if it satisfies the conditions prescribed under Circular 81 and other relevant tax rules and
regulations, and obtains the approvals as required under the Administrative Measures. However, according to Circular 81, if the relevant
tax authorities consider the transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant
tax authorities may adjust the favorable withholding tax in the future.
100
Hong Kong Taxation
The taxation of income and capital gains of holders
of ordinary shares is subject to the laws and practices of Hong Kong and of jurisdictions in which holders of ordinary shares are resident
or otherwise subject to tax. The following summary of certain relevant taxation provisions under Hong Kong law is based on current law
and practice, is subject to changes therein and does not constitute legal or tax advice. The discussion does not deal with all possible
tax consequences relating to an investment in the ordinary shares. Accordingly, each prospective investor (particularly those subject
to special tax rules, such as banks, dealers, insurance companies, tax-exempt entities and holders of 10% or more of our voting capital
stock) should consult its own tax advisor regarding the tax consequences of an investment in the ordinary shares. There is no reciprocal
tax treaty in effect between Hong Kong and the United States.
Tax on Dividends
Under the current practices of the Hong Kong Inland
Revenue Department, no tax is payable in Hong Kong in respect of dividends paid by us.
Profits Tax
No tax is imposed in Hong Kong in respect of capital
gains from the sale of property (such as the ordinary shares). Trading gains from the sale of property by persons carrying on a trade,
profession or business in Hong Kong where such gains are derived from or arise in Hong Kong from such trade, profession or business will
be chargeable to Hong Kong profits tax, which is currently imposed at the rate of 16.5% and 15% on corporations and unincorporated businesses,
respectively, and at a maximum rate of 15% on individuals. Liability for Hong Kong profits tax may thus arise in respect of trading gains
from sales of ordinary shares realized by persons carrying on a business or trading or dealing in securities in Hong Kong.
Stamp Duty
Hong Kong stamp duty, currently charged at the
rate of HK$1 per HK$1,000 or part thereof on the higher of the consideration for or the value of the ordinary shares, will be payable
by the purchaser on every purchase and by the seller on every sale of ordinary shares (i.e., a total of HK$2 per HK$1,000 or part thereof
is currently payable on a typical sale and purchase transaction involving ordinary shares). In addition, a fixed duty of HK$5 is currently
payable on any instrument of transfer of ordinary shares. If one of the parties to the sale is a non-Hong Kong resident and does not pay
the required stamp duty, the duty not paid will be assessed on the instrument of transfer (if any) and the transferee will be liable for
payment of such duty. No Hong Kong stamp duty is payable upon the transfer of ordinary shares outside Hong Kong.
Estate Duty
The Revenue (Abolition of Estate Duty) Ordinance
2005 came into effect on February 11, 2006 in Hong Kong. No Hong Kong estate duty is payable and no estate duty clearance papers
are needed for an application for a grant of representation in respect of holders of ordinary shares whose death occurs on or after February 11,
2006.
101
United States Federal Income Tax Considerations
The following is a discussion of United States
federal income tax considerations relating to the acquisition, ownership, and disposition of our ordinary shares by a U.S. Holder, as
defined below, that acquires our ordinary shares and holds our ordinary shares as "capital assets" (generally, property held
for investment) under the United States Internal Revenue Code of 1986, as amended (the "Code"). This discussion is based upon
existing United States federal income tax law, which is subject to differing interpretations or change, possibly with retroactive effect.
No ruling has been sought from the Internal Revenue Service (the "IRS") with respect to any United States federal income tax
consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion
does not address all aspects of United States federal income taxation that may be important to particular investors in light of their
individual circumstances, including investors subject to special tax rules (such as, for example, certain financial institutions, insurance
companies, regulated investment companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market
treatment, partnerships and their partners, tax-exempt organizations (including private foundations)), investors who are not U.S. Holders,
investors that own (directly, indirectly, or constructively) 10% or more of our voting stock, investors that hold their ordinary shares
as part of a straddle, hedge, conversion, constructive sale or other integrated transaction), or investors that have a functional currency
other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition,
this discussion does not address any tax laws other than the United States federal income tax laws, including any state, local, alternative
minimum tax or non-United States tax considerations, or the Medicare tax. Each potential investor is urged to consult its tax advisor
regarding the United States federal, state, local and non-United States income and other tax considerations of an investment in our ordinary
shares.
General
For purposes of this discussion, a "U.S.
Holder" is a beneficial owner of our ordinary shares that is, for United States federal income tax purposes, (i) an individual who
is a citizen or treated as a tax resident of the United States, (ii) a corporation (or other entity treated as a corporation for United
States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District
of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless
of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which
has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise
elected to be treated as a United States person under the Code.
If a partnership (or other entity treated as a
partnership for United States federal income tax purposes) is a beneficial owner of our ordinary shares, the tax treatment of a partner
in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership
holding our ordinary shares are urged to consult their tax advisors regarding an investment in our ordinary shares.
The discussion set forth below is addressed only
to U.S. Holders that purchase ordinary shares. Prospective purchasers are urged to consult their own tax advisors about the application
of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences
to them of the purchase, ownership and disposition of our ordinary shares.
Taxation of Dividends and Other Distributions
on our Ordinary Shares
Subject to the passive foreign investment company
rules discussed below, the gross amount of distributions made by us to you with respect to the ordinary shares (including the amount of
any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but
only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal
income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction
allowed to corporations in respect of dividends received from other U.S. corporations.
102
With respect to non-corporate U.S. Holders, including
individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that
(1) the ordinary shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits
of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a
passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable
year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and the Cayman
Islands, clause (1) above can be satisfied only if the ordinary shares are readily tradable on an established securities market in the
United States. Under U.S. Internal Revenue Service authority, ordinary shares are considered for purpose of clause (1) above to be readily
tradable on an established securities market in the United States if they are listed on certain exchanges, which presently include the
Nasdaq. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our
ordinary shares, including the effects of any change in law after the date of this report.
To the extent that the amount of the distribution
exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated
first as a tax-free return of your tax basis in your ordinary shares, and to the extent the amount of the distribution exceeds your tax
basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax
principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise
be treated as a non-taxable return of capital or as capital gain under the rules described above.
Taxation of Dispositions of Ordinary Shares
Subject to the passive foreign investment company
rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to
the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the ordinary shares.
The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held
the ordinary shares for more than one year, you may be eligible for reduced tax rates on any such capital gains. The deductibility of
capital losses is subject to limitations.
Passive Foreign Investment Company ("PFIC")
A non-U.S. corporation is considered a PFIC for
any taxable year if either:
●
at least 75% of its gross income
for such taxable year is passive income; or
●
at least 50% of the value of
its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or
are held for the production of passive income (the "asset test").
Passive income generally includes dividends, interest,
rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition
of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income
of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining the value and composition
of our assets for purposes of the PFIC asset test, (1) the cash we hold will generally be considered to be held for the production of
passive income and (2) the value of our assets must be determined based on the market value of our ordinary shares from time to time,
which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets (including the cash raised
in any offering) on any particular quarterly testing date for purposes of the asset test.
103
We must make a separate determination each year
as to whether we are a PFIC. Depending on the amount of cash we hold, together with any other assets held for the production of passive
income, it is possible that, for our current taxable year or for any subsequent taxable year, at least 50% of our assets may be assets
held for the production of passive income. We will make this determination following the end of any particular tax year. Although the
law in this regard is unclear, we treat the consolidated variable interest entity, as being owned by us for United States federal income
tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially
all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements. In
particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our
ordinary shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will
depend in large part on the market price of our ordinary shares and the amount of cash we hold. Accordingly, fluctuations in the market
price of the ordinary shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in
several respects. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above,
the determination of the value of our assets will depend upon material facts (including the market price of our ordinary shares from time
to time that may not be within our control). If we are a PFIC for any year during which you hold ordinary shares, the shares will continue
to be treated as stock in a PFIC for all succeeding years during which you hold ordinary shares. However, if we cease to be a PFIC and
you did not previously make a timely "mark-to-market" election as described below, you may avoid some of the adverse effects
of the PFIC regime by making a "purging election" (as described below) with respect to the ordinary shares.
If we are a PFIC for your taxable year(s) during
which you hold ordinary shares, you will be subject to special tax rules with respect to any "excess distribution" that you
receive and any gain you realize from a sale or other disposition (including a pledge) of the ordinary shares, unless you make a "mark-to-market"
election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions
you received during the shorter of the three preceding taxable years or your holding period for the ordinary shares will be treated as
an excess distribution. Under these special tax rules:
●
the excess distribution or gain
will be allocated ratably over your holding period for the ordinary shares;
●
the amount allocated to your
current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC,
will be treated as ordinary income, and
●
the amount allocated to each
of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable
to underpayments of tax will be imposed on the resulting tax attributable to each such year.
The tax liability for amounts allocated to years
prior to the year of disposition or "excess distribution" cannot be offset by any net operating losses for such years, and
gains (but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold the ordinary shares
as capital assets.
A U.S. Holder of "marketable stock"
(as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you
make a mark-to-market election for first taxable year which you hold (or are deemed to hold) ordinary shares and for which we are determined
to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the ordinary
shares as of the close of such taxable year over your adjusted basis in such ordinary shares, which excess will be treated as ordinary
income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the ordinary shares over
their fair market value as of the close of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market
gains on the ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election,
as well as gain on the actual sale or other disposition of the ordinary shares, are treated as ordinary income. Ordinary loss treatment
also applies to any loss realized on the actual sale or disposition of the ordinary shares, to the extent that the amount of such loss
does not exceed the net mark-to-market gains previously included for such ordinary shares. Your basis in the ordinary shares will be adjusted
to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by
corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified
dividend income discussed above under "—
Taxation of Dividends and Other Distributions on our ordinary shares
"
generally would not apply.
104
The mark-to-market election is available only
for "marketable stock", which is stock that is traded in other than de minimis quantities on at least 15 days during each
calendar quarter ("regularly traded") on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations),
including Nasdaq. If the ordinary shares are regularly traded on Nasdaq and if you are a holder of ordinary shares, the mark-to-market
election would be available to you were we to be or become a PFIC.
Alternatively, a U.S. Holder of stock in a PFIC
may make a "qualified electing fund" election with respect to such PFIC to elect out of the tax treatment discussed above.
A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable
year such holder's pro rata share of the corporation's earnings and profits for the taxable year. However, the qualified electing
fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as
required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable
you to make a qualified electing fund election.
If you hold ordinary shares in any taxable year
in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual
information regarding such ordinary shares, including regarding distributions received on the ordinary shares and any gain realized on
the disposition of the ordinary shares.
If you do not make a timely "mark-to-market"
election (as described above), and if we were a PFIC at any time during the period you hold our ordinary shares, then such ordinary shares
will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a "purging
election" for the year we cease to be a PFIC. A "purging election" creates a deemed sale of such ordinary shares at
their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election
will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result
of the purging election, you will have a new basis (equal to the fair market value of the ordinary shares on the last day of the last
year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your ordinary
shares for tax purposes.
You are urged to consult your tax advisors regarding
the application of the PFIC rules to your investment in our ordinary shares and the elections discussed above.
Information Reporting and Backup Withholding
Payments of dividends
and sales proceeds that are made within the United States or through certain U.S.-related intermediaries may be subject to information
reporting and backup withholding, unless (i) the U.S. Holder is a corporation or other "exempt recipient" or (ii) in the case
of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup
withholding. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be
allowed as a credit against the U.S. Holder's U.S. federal income tax liability and may entitle it to a refund, provided that the
required information is timely furnished to the IRS.
Information with respect to foreign
financial assets
Certain U.S. Holders
who are individuals (and, under proposed regulations, certain entities) may be required to report information relating to an interest
in our ordinary shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain
U.S. financial institutions). U.S. Holders should consult their tax advisors regarding the effect, if any, of this legislation on their
ownership and disposition of our ordinary shares.
105
10.F. Dividends and Paying Agents
Not Applicable.
10.G. Statement by Experts
Not Applicable.
10.H. Documents on Display
We are subject to periodic reporting and other
informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports,
including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC can be obtained over
the internet at the SEC's website at www.sec.gov or inspected and copied at the public reference facilities maintained by the
SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at www.sec.gov that contains reports and other information regarding
registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules
under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
You may also visit us on the world wide web at http://www.ocgroup.hk. However, information contained on our website does not constitute
a part of this annual report.
10.I. Subsidiary Information
Not Applicable.
10.J.
Annual Report to Security Holders
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Liquidity risk
We are exposed to liquidity risk, which is the
risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity
risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to other
financial institutions to obtain short-term funding to meet the liquidity shortage.
Inflation risk
Inflationary factors, such as increases in personnel
and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial
position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain
current levels of gross margin and operating expenses as a percentage of sales revenue if the revenues from our products do not increase
with such increased costs.
106
Interest rate risk
Our exposure to interest rate risk primarily relates
to the interest rate that our deposited cash can earn. Interest-earning instruments carry a degree of interest rate risk. We have not
been exposed to material risks due to changes in interest rates. An increase in interest rates, however, may raise the cost of any debt
we incur in the future.
Foreign currency translation and transaction
Our operating transactions and assets and liabilities
are mainly denominated in RMB. RMB is not freely convertible into foreign currencies for capital account transactions. The value of RMB
against the U.S. dollar and other currencies is affected by, among other things, changes in China's political and economic
conditions and China's foreign exchange policies. To date, we have not entered into any hedging transactions in an effort to reduce
our exposure to foreign currency exchange risk.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
Not applicable.
B. Warrants and Rights
Not applicable.
C. Other Securities
Not applicable.
107
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not Applicable.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS
See "Item 10—Additional Information—B.
Memorandum and Articles of Association—Common Shares" for a description of the rights of securities holders, which remain
unchanged.
Use of Proceeds
The following "Use of Proceeds" information
relates to the registration statement on Form F-1, as amended (File number: 333-234654) in relation to the initial public
offering of 5,065,000 ordinary shares of the Company. Our initial public offering closed in December 2020. ViewTrade Securities Inc. was
the representative of the underwriters for our initial public offering. Counting in the ordinary shares sold upon the partial exercise
of the over-allotment option by our underwriters, we offered and sold 5,124,400 ordinary shares and received net proceeds of approximately
US$17.3 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The registration
statement was declared effective by the SEC on December 1, 2020. The total expenses incurred for our Company's account in connection
with our initial public offering was approximately US$3.2 million, which included approximately US$1.4 million in underwriting
discounts and commissions for the initial public offering and approximately US$1.8 million in other costs and expenses for our initial
public offering. None of the transaction expenses included payments to directors or officers of our Company or their associates, persons
owning more than 10% or more of our equity securities or our affiliates. None of the net proceeds we received from the initial public
offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our
equity securities or our affiliates.
For the period from the date that the F-1 Registration
Statement was declared effective by the SEC to December 31, 2022, we used approximately US$2.7 million of the proceeds received
from the initial public offering for the payment for upgrading information technology infrastructure, software, app development and system
for our online platforms. There is no material change in the use of proceeds as described in the registration statement. We still intend
to use the proceeds from our initial public offering as disclosed in our registration statement on Form F-1.
ITEM 15. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our
chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by Rule
13a-15(b) under the Exchange Act. Based upon that evaluation, our management has concluded that, due to the material weaknesses identified
below, as of December 31, 2022, our disclosure controls and procedures were not effective in ensuring that the information required to
be disclosed by us in the reports that we file or submit under the Exchange Act was recorded, processed, summarized and reported, within
the time periods specified in the SEC's rules and forms, and that the information required to be disclosed by us in the reports
that we file or submit under the Exchange Act was accumulated and communicated to our management, including our chief executive officer
and chief financial officer, to allow timely decisions regarding required disclosure.
108
Management's Annual Report on Internal
Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as defined in Rules 13a-15 (f) under the Exchange Act. As required by Section 404 of the
Sarbanes-Oxley Act and related rules as promulgated by the SEC, our management, with the participation of our chief executive officer
and chief financial officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022, based
on criteria established in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial
reporting was not effective as of December 31, 2022.
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies and procedures may deteriorate.
In the course of management's preparation
and our independent registered public accounting firm's auditing of our consolidated financial statements as of and for the year
ended December 31, 2022, we and our independent registered public accounting firm identified one material weakness in our internal
control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a "material
weakness" is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis,
in accordance with the standards established by the Public Company Accounting Oversight Board of the United States.
The material weakness identified relates to our
lack of in-house accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to prepare and review financial
statements and related disclosures in accordance with U.S. GAAP and applicable requirements by SEC. Due to the foregoing material weakness,
management concluded that as of December 31, 2022, our internal control over financial reporting was ineffective.
To remedy our identified material weakness identified
to date, we have hired external accountants who have extensive experience in US GAAP and SEC reporting to help us in the preparation of
our financial reports, and we also plan to undertake steps to strengthen our internal control over financial reporting, including (i)
recruiting more financial reporting and accounting personnel who have adequate U.S. GAAP and SEC reporting knowledge; and (ii) implementing
regular and continuous U.S. GAAP and SEC accounting and financial reporting training programs for our accounting and financial personnel.
However, we cannot assure you that we will remediate
our material weakness in a timely manner, or at all. See "
Item 3. Key Information—Risk Factors—Risks Related to Our
Business—If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial
statements or comply with applicable regulations could be impaired
."
As a company with less than US$1.235 billion
in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the JOBS Act. An emerging
growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to
public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the
Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company's internal control over financial reporting.
Attestation Report of the Registered Public
Accounting Firm
As a Company with less than $1.235 billion in revenue
for our last fiscal year, we qualify as an "emerging growth company" pursuant to the JOBS Act. An emerging growth company
may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies.
These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, in the
assessment of the emerging growth company's internal control over financial reporting. This annual report on Form 20-F does not
include an attestation report of our registered public accounting firm because we are an emerging growth company.
109
Changes in Internal Control
Other than as described above, there were no changes
in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Mr. Nelson
Wong, Chairman of our audit committee and an independent director (under the standards set forth in Nasdaq Stock Market Rule 5605(a)(2)
and Rule 10A-3 under the Exchange Act), is an audit committee financial expert.
ITEM 16.B. CODE OF ETHICS
Our board of directors has adopted a code of ethics
that applies to all of the directors, officers and employees of our company. We have filed our code of business conduct and ethics as
Exhibit 99.1 of our registration statement on Form F-1 (File Number: 333-234654), as amended, initially filed with the SEC on November
12, 2019, and a copy is available to any shareholder upon request. We have also posted the code on our corporate website at www.ocgroup.hk.
ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees
by categories specified below in connection with certain professional services rendered by Wei Wei & Co., LLP, our independent registered
public accounting firm, for the periods indicated.
Year Ended
December
31,
2022
Year Ended
December 31,
2021
Audit fees(1)
$
184,000
$
160,000
Audit related fees(2)
-
Tax fees(3)
-
All other fees(4)
60,000
-
TOTAL
$
244,000
$
160,000
(1)
"Audit fees" means
the aggregate fees billed for each of the fiscal years for professional services rendered by our principal accountant for the audit of
our annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory
filings or engagements for those fiscal years.
(2)
"Audit related fees"
means the aggregate fees billed for each of the fiscal years for assurance and related services by our principal accountant that are
reasonably related to the performance of the audit or review of our financial statements and are not reported under paragraph (1).
(3)
"Tax Fees" represents
the aggregate fees billed in each of the fiscal years listed for the professional tax services rendered by our principal auditors.
(4)
"All Other Fees" represents
the aggregate fees billed in each of the fiscal years listed for services rendered by our principal auditors other than services reported
under "Audit fees," "Audit-related fees" and "Tax fees."
The policy of our audit committee and our board
of directors is to pre-approve all audit and non-audit services provided by our principal auditors, including audit services, audit-related
services, and other services as described above, other than those for de minimis services which are approved by the audit committee prior
to the completion of the services.
110
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not Applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
Neither we nor any "affiliated purchaser,"
as defined in Rule 10b-18(a)(3) of the Exchange Act, purchased any of our equity securities during the period covered by this
annual report.
ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable.
ITEM 16G. CORPORATE GOVERNANCE
As a Cayman Islands exempted company listed on
the Nasdaq Capital Market, or Nasdaq, we are subject to the Nasdaq corporate governance requirements. However, Nasdaq rules permit a foreign
private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the
Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance requirements. Currently, we follow
our home country practice in lieu of the provisions under Rule 5620(a), Rule 5635(a)(1), Rule 5635(b), Rule 5635(c) and Rule 5635(d) of
the NASDAQ Stock Market Marketplace Rules (the "Rules"). Rule 5620(a) requires that the Company to hold an annual meeting of
shareholders no later than one year after the end of the Company's fiscal year-end; Rule 5635(a)(1) of the Rules requires shareholder
approval for the issuance of securities in connection with the acquisition of the stock or assets of another company; Rule 5635(b) of
the Rules requires shareholder approval for the issuance of securities when the issuance will result in a change of control of the company;
Rule 5635(c) of the Rules requires shareholder approval for share incentive plans; and Rule 5635(d) of the Rules requires shareholder
approval for the issuance of securities, other than in a public offering, equal to 20% or more of the voting power outstanding before
the issuance for less than the greater of book or market value of the stock. The corporate governance practice in our home country, the
Cayman Islands, does not require the Company to follow or comply with the requirements of Rule 5620(a), Rule 5635(a)(1), Rule 5635(b),
Rule 5635(c) and Rule 5635(d). If we choose to follow additional home country practice in the future, our shareholders may be afforded
less protection than they would otherwise enjoy under the Nasdaq corporate governance requirements applicable to U.S. domestic issuers.
See "
Item 3. Key Information — D. Risk Factors— Risks Related to Our Ordinary Shares—Because we are a foreign
private issuer and are exempt from certain NASDAQ corporate governance standards applicable to U.S. issuers, you may have less protection
than you would have if we were a domestic issuer.
"
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS
Not applicable.
111
PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements
pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
The consolidated financial statements and related
notes required by this item are contained on pages F-1 through F-36.
ITEM 19. EXHIBITS
Exhibit No.
Description
1.1
Second Amended and Restated Memorandum of Association (incorporated herein by reference to Exhibit 3.2 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
1.2
Second Amended and Restated Articles of Association (incorporated herein by reference to Exhibit 3.3 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
2.1
Specimen certificate evidencing ordinary shares (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
2.2*
Description Of Securities
4.1
Sale and Purchase Agreement in Respect of 100% of Issued Share Capital of HKDAEX Limited by and between HKFAEX Group Limited and Oriental Culture Holding LTD dated May 7, 2019 (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.2
Sale and Purchase Agreement in Respect of 100% of Issued Share Capital of China International Assets and Equity of Artworks Exchange Limited by and between HKFAEX Group Limited and Oriental Culture Holding LTD dated May 7, 2019 (incorporated herein by reference to Exhibit 10.2 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)**
4.3
Technical Consultation and Service Agreement, by and between Nanjing Rongke Business Consulting Service Co., Ltd. and Jiangsu Yanggu Culture Development Co., Ltd. dated May 8, 2019  (incorporated herein by reference to Exhibit 10.3 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.4
Equity Pledge Agreement, by and among Nanjing Rongke Business Consulting Service Co., Ltd., Jiangsu Yanggu Culture Development Co., Ltd. and Jiangsu Yanggu Culture Development Co., Ltd.'s shareholders dated May 8, 2019 (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.5
Equity Option Agreement, by and among Nanjing Rongke Business Consulting Service Co., Ltd., Jiangsu Yanggu Culture Development Co., Ltd. and Jiangsu Yanggu Culture Development Co., Ltd.'s shareholders dated May 8, 2019 (incorporated herein by reference to Exhibit 10.5 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.6
Voting Rights Proxy  and Financial Supporting Agreement, by and among Nanjing Rongke Business Consulting Service Co., Ltd., Jiangsu Yanggu Culture Development Co., Ltd. and Jiangsu Yanggu Culture Development Co., Ltd.'s shareholders dated May 8, 2019 (incorporated herein by reference to Exhibit 10.6 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.7
Employment Agreement by and between the Registrant and Yi Shao dated May 10, 2019 (incorporated herein by reference to Exhibit 10.7 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.8
Employment Agreement by and between the Registrant and Lijia Ni dated May 10, 2019 (incorporated herein by reference to Exhibit 10.8 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.9
Form of Indemnification Agreement by and between the Registrant and executive officers and directors of the Registrant (incorporated herein by reference to Exhibit 10.9 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
112
4.10
Form of Indemnification Escrow Agreement (incorporated herein by reference to Exhibit 10.10 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.11
Independent Director Agreement by and between the Registrant and Y. Tristan Kuo dated November 6, 2019 (incorporated herein by reference to Exhibit 10.11 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.12
Independent Director Agreement by and between the Registrant and Bennet P. Tchaikovsky dated January 15, 2020 (incorporated herein by reference to Exhibit 10.12 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.13
Independent Director Agreement by and between the Registrant and Xiaobing Liu dated May 10, 2019 (incorporated herein by reference to Exhibit 10.13 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.14
Director Agreement by and between the Registrant and Mun Wah Wan dated March 6, 2020 (incorporated herein by reference to Exhibit 10.14 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.15
Director Agreement by and between the Registrant and Yi Shao dated March 6, 2020 (incorporated herein by reference to Exhibit 10.15 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.16
Website Advertising Space Leasing Agreement by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. (incorporated herein by reference to Exhibit 10.17 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.17
Technical Maintenance Services Contract by and between Hunan Huaqiang Artwork Trading Center Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. (incorporated herein by reference to Exhibit 10.18 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.18
Technical Maintenance Services Contract by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. (incorporated herein by reference to Exhibit 10.19 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.19
Technical Maintenance Services Contract by and between Nanjing Jinwang Art Purchase E-commerce Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2018 (incorporated herein by reference to Exhibit 10.20 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.20
Cooperation Agreement and Amendment to Cooperation Agreement by and between Kashi Dongfang Cangpin Culture Development Co., Ltd. and Zhongcang Warehouse Co., Ltd. dated September 1, 2018 and September 15, 2018 (incorporated herein by reference to Exhibit 10.21 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.21
Technical Maintenance Services Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2018 (incorporated herein by reference to Exhibit 10.23 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
113
4.22
Technical Maintenance Services Contract by and between Jinling Cultural Property Rights Exchange Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated October 1, 2018 (incorporated herein by reference to Exhibit 10.24 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.23
Administration Services Agreement by and between HKDAEx Limited and HKFAEx Limited dated August 1, 2018 (incorporated herein by reference to Exhibit 10.25 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)**
4.24
Office Premises Use Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. dated January 1, 2020 (incorporated herein by reference to Exhibit 10.26 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.25
Cooperation Agreement by and between China International Assets and Equity of Artworks Exchange Limited and Nanjing Jinwang Art Purchase E-commerce Co., Ltd. on January 1, 2018 (incorporated herein by reference to Exhibit 10.29 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.26
Cooperation Agreement by and between HKDAEx Limited and Nanjing Jinwang Art Purchase E-commerce Co., Ltd. on March 15, 2019 (incorporated herein by reference to Exhibit 10.30 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.27
Product Consulting Service Agreement by and between Nanjing Pusideng Information Technology Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. in 2019 (incorporated herein by reference to Exhibit 10.31 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
4.28
Renewal of Employment Agreement by and between the Company and Yi Shao (incorporated herein by reference to Exhibit 4.33 to Form 20-F filed with the SEC on April 30, 2021)
4.29
Renewal of Employment Agreement by and between the Company and Lijia Ni (incorporated herein by reference to Exhibit 4.34 to Form 20-F filed with the SEC on April 30, 2021)
4.30
Office Premises Use Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. dated January 1, 2021 (incorporated herein by reference to Exhibit 4.35 to Form 20-F filed with the SEC on April 30, 2021)
4.31
Form of Amended and Restated Equity Pledge Agreement by and among Nanjing Rongke, Jiangsu Yanggu  and shareholders of Jiangsu Yanggu (incorporated herein by reference to Exhibit 10.1 to Form 6-K filed with the SEC on February 1, 2021)
4.32
Form of Amended and Restated Equity Option Agreement by and among Nanjing Rongke, Jiangsu Yanggu  and shareholders of Jiangsu Yanggu (incorporated herein by reference to Exhibit 10.2 to Form 6-K filed with the SEC on February 1, 2021)
4.33
Form of Amended and Restated Voting Rights Proxy and Financial Supporting Agreement by and among Nanjing Rongke, Jiangsu Yanggu  and shareholders of Jiangsu Yanggu (incorporated herein by reference to Exhibit 10.3 to Form 6-K filed with the SEC on February 1, 2021)
4.34
Employment Agreement by and between the Company and Yi Shao dated April 27, 2021(incorporated herein by reference to Exhibit 4.39 to Form 20-F filed with the SEC on April 30, 2021)
4.35
Employment Agreement by and between the Company and Lijia Ni dated April 27, 2021(incorporated herein by reference to Exhibit 4.40 to Form 20-F filed with the SEC on April 30, 2021)
4.36
Technical Maintenance Services Contract by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. (incorporated herein by reference to Exhibit 4.36 to Form 20-F filed with the SEC on May 2, 2022)
4.37
Technical Maintenance Services Contract by and between Jinling Cultural Property Rights Exchange Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2021. (incorporated herein by reference to Exhibit 4.37 to Form 20-F filed with the SEC on May 2, 2022)
4.38
Technical Maintenance Services Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2021. (incorporated herein by reference to Exhibit 4.38 to Form 20-F filed with the SEC on May 2, 2022)
4.39
Technical Maintenance Services Contract by and between Hunan Huaqiang Artwork Trading Center Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2021. (incorporated herein by reference to Exhibit 4.39 to Form 20-F filed with the SEC on May 2, 2022)
4.40
Office Premises Use Contract by and between Nanjing Culture and Artwork Property Exchange Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. dated January 1, 2022(incorporated herein by reference to Exhibit 4.40 to Form 20-F filed with the SEC on May 2, 2022)
4.41
Preowned Property Purchase and Sale Agreement by and among Nanjing Z-COM Wireless Communication Technology Co., Ltd., Kashi Longrui Business Management Service Co., Ltd., and Kashi Dongfang Cangpin Culture Development Co., Ltd. on November 4, 2021. (incorporated herein by reference to Exhibit 4.41 to Form 20-F filed with the SEC on May 2, 2022)
114
4.42
Oriental Culture Holding LTD 2021 Omnibus Equity Plan (incorporated herein by reference to Annex A of Exhibit 99.1 to the Form 6-K, filed with the SEC on November 9, 2021)
4.43
Form of Securities Purchase Agreement (incorporated herein by reference to Exhibit 99.1 to Form 6-K filed with the SEC on December 8, 2021)
4.44
Form of Warrants (incorporated herein by reference to Exhibit 99.2 to Form 6-K filed with the SEC on December 8, 2021)
4.45
Website Advertising Space Leasing Agreement by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. dated on January 1, 2022. (incorporated herein by reference to Exhibit 4.45 to Form 20-F filed with the SEC on May 2, 2022)
4.46
Cooperation Agreement by and between Kashi Dongfang Cangpin Culture Development Co., Ltd. and Zhongcang Warehouse Co., Ltd. dated January 1, 2021 (incorporated herein by reference to Exhibit 4.46 to Form 20-F filed with the SEC on May 2, 2022)
4.47*
Technical Maintenance Services Contract by and between Kashi Jinwang Art Purchase E-commerce Co., Ltd. and Nanjing Yanyu Information Technology Co., Ltd. dated July 1, 2022
4.48*
Office Premises Use Contract by and between Nanjing Cultural and Artwork Property Exchange Co., Ltd. and Kashi Longrui Business Management Services Co., Ltd. dated December 31, 2022
8.1*
List of Subsidiaries of the Registrant
11.1
Code of Business Conduct and Ethics(incorporated herein by reference to Exhibit 99.1 to the registration statement on Form F-1 (File No. 333-234654), as amended, initially filed with the SEC on November 12, 2019)
12.1*
CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*
CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1*
CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2*
CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*
Consent of Jiangsu Taikun Law Firm
15.2*
Consent of Wei Wei & Co., LLP
101.INS
Inline XBRL Instance Document *
101.SCH
Inline XBRL Taxonomy Extension Schema Document *
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document *
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document *
104
Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101 *
*
Filed as an exhibit hereto.
115
SIGNATURES
The registrant hereby certifies that it meets
all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report
on its behalf.
Oriental Culture Holding LTD.
/s/ Yi Shao
Name:
Yi Shao
Title:
Chief Executive Officer
Date: May 1, 2023
116
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID:
2388
)
F-2
Consolidated Financial Statements
Consolidated balance sheets as of December 31, 2022 and 2021
F-3
Consolidated statements of income and comprehensive income for the years ended December 31, 2022, 2021 and 2020
F-4
Consolidated statements of changes in shareholders' equity
F-5
Consolidated statements of cash flows for the years ended December 31, 2022, 2021 and 2020
F-6
Notes to Consolidated Financial Statements
F-7
F-
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
of Oriental Culture Holding Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Oriental Culture Holding Ltd. and Subsidiaries (collectively, the "Company") as of December 31, 2022 and
2021, and the related consolidated statements of income and comprehensive income, changes in shareholders' equity, and cash flows
for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively referred to as the "consolidated
financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in
the three-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.
/s/
Wei, Wei & Co., LLP
Flushing, New York
May 1, 2023
We have served as the Company's auditors since 2019.
F-
2
ORIENTAL CULTURE HOLDING LTD. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
2022
2021
ASSETS
CURRENT ASSETS
Cash and equivalents
$
17,188,833
$
29,398,047
Restricted cash
11,796,388
-
Short-term investment
-
3,748,900
Restricted investment
4,703,323
-
Accounts receivable, net
207
47,060
Accounts receivable – related party
29,311
8,093
Other receivables and prepaid expenses
4,441,946
1,385,394
Other receivables - related party
3,421,345
928,913
Escrow
600,000
600,000
Total current assets
42,181,353
36,116,407
PROPERTY AND EQUIPMENT, NET
9,423,713
9,904,289
OTHER ASSETS
Certificate of deposit
-
3,136,910
Right-of-use assets
34,345
11,494
Cost method Investment
932,552
548,151
Intangible assets, net
816,885
1,120,021
Total other assets
1,783,782
4,816,576
Total assets
$
53,388,848
$
50,837,272
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
$
2,959,415
$
1,625,494
Accounts payable – related party
28,727
-
Deferred revenue
449,037
697,863
Other payables and accrued liabilities
290,150
1,284,235
Taxes payable
13,372
29,826
Lease liability - current
20,808
11,494
Total current liabilities
3,761,509
3,648,912
OTHER LIABILITIES
Lease liability - noncurrent
11,491
-
Total liabilities
3,773,000
3,648,912
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred shares, $
0.00005
par value,
100,000,000
shares authorized,
no
shares issued and outstanding
-
-
Ordinary shares, $
0.00005
par value,
900,000,000
shares authorized,
30,836,992
and
30,654,712
shares issued,
21,226,992
and
21,044,712
shares outstanding as of December 31, 2022 and December 31, 2021, respectively
1,542
1,533
Treasury shares, at cost,
9,610,000
shares
(
481
)
(
481
)
Additional paid-in capital
22,349,767
21,884,962
Subscription receivable
-
(
1,000,000
)
Statutory reserves
124,757
112,347
Retained earnings
28,315,319
25,092,043
Accumulated other comprehensive
    income (loss)
(
1,175,056
)
1,097,956
Total shareholders' equity
49,615,848
47,188,360
Total liabilities and shareholders' equity
$
53,388,848
$
50,837,272
The accompanying notes are an integral
part of these consolidated financial statements.
F-
3
ORIENTAL CULTURE HOLDING LTD. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
Year Ended December 31,
2022
2021
2020
OPERATING REVENUES:
Net revenues
$
17,646,814
$
37,363,303
$
17,225,630
Net revenues - related parties
166,325
233,157
213,172
Total operating revenues
17,813,139
37,596,460
17,438,802
COST OF REVENUES:
(
996,459
)
(
2,425,420
)
(
2,642,163
)
GROSS PROFIT
16,816,680
35,171,040
14,796,639
OPERATING EXPENSES:
Selling and marketing
(
7,668,248
)
(
15,598,482
)
(
4,242,231
)
Selling and marketing - related party
(
43,590
)
(
359,968
)
(
1,762,652
)
General and administrative
(
6,276,661
)
(
8,103,840
)
(
6,943,803
)
General and administrative - related parties
(
238,830
)
(
223,284
)
(
201,865
)
Total operating expenses
(
14,227,329
)
(
24,285,574
)
(
13,150,551
)
INCOME FROM OPERATIONS
2,589,351
10,885,466
1,646,088
OTHER INCOME
Gain from short-term investment
156,066
169,065
93,007
Interest income
226,158
197,237
139,916
Other income, net
268,923
192,505
169,096
Total other income, net
651,147
558,807
402,019
INCOME BEFORE INCOME TAXES
3,240,498
11,444,273
2,048,107
PROVISION FOR INCOME TAX
4,812
-
-
NET INCOME
3,235,686
11,444,273
2,048,107
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment
(
2,273,012
)
174,841
1,144,657
COMPREHENSIVE INCOME
$
962,674
$
11,619,114
$
3,192,764
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
Basic and diluted
21,108,143
20,484,272
15,615,729
EARNINGS PER SHARE
Basic and diluted
$
0.15
$
0.56
$
0.13
The accompanying notes are an integral
part of these consolidated financial statements.
F-
4
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY
Additional
Share
Accumulated
other
Preferred shares
Ordinary shares
Treasury shares
paid-in
subscription
Statutory
Retained
comprehensive
Shares
Par Value
Shares
Par Value
Shares
Par Value
capital
receivable
reserves
earnings
income(loss)
Total
BALANCE, DECEMBER 31, 2019
-
$
-
24,800,000
$
1,240
(
9,610,000
)
$
(
481
)
$
1,608,045
$
-
$
112,347
$
11,599,663
$
(
221,542
)
$
13,099,272
Issuance of shares in initial public offering, net
-
-
5,124,400
256
-
-
17,276,954
-
-
-
-
17,277,210
Cashless exercise of warrants
-
-
130,312
7
-
-
(
7
)
-
-
-
-
-
Net income
-
-
-
-
-
-
-
-
-
2,048,107
-
2,048,107
Foreign currency translation
-
-
-
-
-
-
-
-
-
1,144,657
1,144,657
BALANCE, DECEMBER 31, 2020
-
-
30,054,712
1,503
(
9,610,000
)
(
481
)
18,884,992
-
112,347
13,647,770
923,115
33,569,246
Issuance of ordinary share through initial public offering, net
-
-
600,000
30
-
-
2,999,970
(
1,000,000
)
-
-
-
2,000,000
Net income
-
-
-
-
-
-
-
-
-
11,444,273
-
11,444,273
Foreign currency translation
-
-
-
-
-
-
-
-
-
-
174,841
174,841
BALANCE, DECEMBER 31, 2021
-
-
30,654,712
1,533
(
9,610,000
)
(
481
)
21,884,962
(
1,000,000
)
112,347
25,092,043
1,097,956
47,188,360
Share subscription received
-
-
-
-
-
-
-
1,000,000
-
-
-
1,000,000
Issuance of ordinary shares for consulting fees
-
-
182,280
9
-
-
464,805
-
-
-
-
464,814
Net income
-
-
-
-
-
-
-
-
-
3,235,686
-
3,235,686
Statutory reserve
-
-
-
-
-
-
-
-
12,410
(
12,410
)
-
-
Foreign currency translation
-
-
-
-
-
-
-
-
-
-
(
2,273,012
)
(
2,273,012
)
BALANCE, December 31,2022
-
$
-
30,836,992
$
1,542
(
9,610,000
)
$
(
481
)
$
22,349,767
$
-
$
124,757
$
28,315,319
$
(
1,175,056
)
$
49,615,848
The accompanying notes are an integral
part of these consolidated financial statements.
F-
5
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2022
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
3,235,686
$
11,444,273
$
2,048,107
Adjustments to reconcile net income to net cash (used in) provided by Operating activities:
Depreciation and amortization
654,709
399,223
308,274
Gain from short-term investment
(
156,066
)
(
169,065
)
(
93,007
)
Loss from disposal of equipment
-
-
437
Provision for doubtful accounts
44,602
108,502
117,432
Non-cash lease expense
22,890
23,075
-
Impairment loss on intangible assets
-
25,590
-
Common stock issue for services
464,814
-
-
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable
(
200
)
251,997
779,503
(Increase) in accounts receivable - related parties
(
22,679
)
(
7,998
)
-
(Increase) in other receivables and prepaid expenses
(
3,181,230
)
(
874,228
)
(
778,684
)
Decrease (Increase)  in other receivables - related parties
(
2,662,141
)
1,840,109
(
1,436,464
)
Increase (Decrease) in accounts payable
1,515,337
(
3,246,292
)
4,392,974
(Decrease) increase in accounts payable - related parties
28,167
(
1,241,722
)
952,820
(Decrease) increase in deferred revenue
(
196,548
)
443,540
51,738
(Decrease) increase in other payables and accrued liabilities
(
919,371
)
192,497
288,331
(Decrease) in rent payable - related party
-
(
7,294
)
(
54,273
)
(Decrease) increase in taxes payable
(
14,427
)
(
157,320
)
33,662
(Decrease) in lease liability
(
24,928
)
-
-
Net cash provided by (used in) operating activities
(
1,211,385
)
9,024,887
6,610,850
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments
(
22,152,510
)
(
44,921,336
)
(
24,422,988
)
Proceed from sale of short-term investments
23,965,569
42,453,852
25,285,807
Purchase of cost method investments
(
446,024
)
-
-
Purchase of certificate of deposit
-
(
3,136,910
)
-
Purchase of property, plant and equipment
(
708,951
)
(
9,598,351
)
(
9,388
)
Purchase of intangible assets
(
49,613
)
(
785,590
)
(
9,642
)
Refund (payment) of real estate purchase
-
13,178,917
(
12,613,083
)
Net cash provided by (used in) investing activities
608,471
(
2,809,418
)
(
11,769,294
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from share subscription
1,000,000
2,000,000
18,090,668
Net cash provided by financing activities
1,000,000
2,000,000
18,090,668
EFFECT OF EXCHANGE RATE ON CASH AND EQUIVALENTS
(
809,912
)
(
126,514
)
322,580
(DECREASE) INCREASE IN CASH AND EQUIVALENTS
(
412,826
)
8,088,955
13,254,804
CASH AND EQUIVALENTS, beginning of year
29,398,047
21,309,092
8,054,288
CASH AND EQUIVALENTS, end of year
$
28,985,221
$
29,398,047
21,309,092
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income tax
$
-
$
-
$
-
Cash paid for interest
$
-
$
-
$
-
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES
Proceeds from initial public offerings deposited with escrow
$
-
$
$
600,000
Initial recognition of right-of-use assets and lease liabilities
$
45,659
$
34,608
$
2022
2021
2020
Cash and cash equivalents
17,188,833
29,398,047
21,309,092
Restricted cash
11,796,388
-
-
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows
28,985,221
29,398,047
21,309,092
The accompanying notes are an integral
part of these consolidated financial statements.
F-
6
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Nature of business and organization
Oriental Culture Holding Ltd.
("Oriental Culture") is a holding company incorporated on November 29, 2018, under the laws of the Cayman Islands.
Oriental Culture Holding Ltd., its subsidiaries and variable interest entity ("VIE") and its subsidiaries are hereafter
referred to as the "Company".
Oriental Culture has no substantial operations
other than holding all of the outstanding share capital of Oriental Culture Development ("Oriental Culture BVI"), China International
Assets and Equity of Artworks Exchange Limited ("International Culture") and HKDAEx Limited. Oriental Culture BVI is also
a holding company holding all of the outstanding share capital of HK Oriental Culture Investment Development Limited ("Oriental
Culture HK"). Oriental Culture HK is also a holding company holding all of the outstanding equity of Nanjing Rongke Business Consulting
Service Co., Ltd. ("Oriental Culture WFOE" or "WFOE").
The Company, through its direct subsidiary Oriental
Culture HK and VIE, Jiangsu Yanggu Culture Development Co., Ltd. and subsidiaries ("Jiangsu
Yanggu") and International Culture are engaged in providing online platforms that facilitate the e-commerce trading of artwork and
collectables and the online trading of commodities, principally teas. The Company's headquarters were located in the City of Nanjing,
in the People's Republic of China (the "PRC" or "China"). All of the Company's business activities
are carried out by Oriental Culture HK, Jiangsu Yanggu and Jiangsu Yanggu's subsidiaries.
On May 8, 2019, Oriental Culture completed its
reorganization of entities under common control of various shareholders, who collectively owned
100
% of the equity interests of Oriental
Culture prior to the reorganization. Oriental Culture, Oriental Culture BVI, and Oriental Culture HK, were established as the holding
companies of Oriental Culture WFOE. Oriental Culture WFOE is the primary beneficiary of Jiangsu Yanggu and its subsidiaries. Prior to
the reorganization, Jiangsu Yanggu and International Culture were under common control, as the same group of shareholders held more than
50
% of the voting ownership interest of each entity, and contemporaneous written evidence of agreements to vote a majority of the entities'
shares in concert exists. Oriental Culture, International Culture and Jiangsu Yanggu were under common control, which resulted in the
consolidation of International Culture and Jiangsu Yanggu, which was accounted for as a reorganization of entities under common control
at their carrying values. The financial statements are prepared on the basis as if the reorganization became effective as of the beginning
of the first period presented in the accompanying consolidated financial statements of Oriental Culture.
On May 9, 2019, the Company acquired all outstanding
equity interest of HKDAEx Limited ("HKDAEx"), which provides the Company's customers with an additional online trading
platform in Hong Kong. Therefore, starting in second half of 2019, the Company expanded its business operations to include online trading
of certain commodities, primarily teas on the platform of HKDAEx.
Contractual Arrangements
In the PRC, investment activities by foreign investors
are principally governed by the Special Administrative Measures (Negative List) for Foreign Investment Access which is updated from time
to time by MOFCOM and NDRC. In June, 2020, the MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for
Foreign Investment Access (2020 Version), or the Negative List, which became effective on July 23, 2020. On December 27, 2020, the Special
Administrative Measures for foreign investment access (Negative List) (2021 version) was issued and became effective on January 1, 2022,
replacing the Special Administrative Measures for foreign investment access (Negative List) (2020 version). The Negative List divides
industries into two categories: restricted and prohibited. Industries not listed in the Negative List are generally open to foreign investment
unless specifically restricted by other PRC regulations.
Oriental Culture is a Cayman Islands company and
its subsidiaries including Oriental Culture WFOE is considered a foreign invested enterprise. Although the business the Company conducts
through Jiangsu Yanggu is not within the category in which foreign investment is currently restricted or prohibited under the Negative
List or other PRC Laws, the Company expects that in the future Jiangsu Yanggu will engage in marketing survey services for online marketplaces.
Marketing survey services are within the category in which foreign investment is restricted pursuant to the Negative List. In addition,
the Company intends to centralize the Company's management and operations in the PRC to avoid being restricted to conduct certain
business activities which are important for the Company's current or future business but are currently restricted or might be restricted
in the future. As such, Jiangsu Yanggu is controlled through contractual arrangements in lieu of direct equity ownership by the Company
or any of its subsidiaries. Such contractual arrangements are comprised of a series of four agreements (collectively the "Contractual
Arrangements"), of which the significant terms are as follows:
F-
7
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Contractual Agreements with Jiangsu Yanggu
Technical Consultation and Services Agreement
Pursuant to the technical consultation and services
agreement between Oriental Culture WFOE and Jiangsu Yanggu, Oriental Culture WFOE has the exclusive right to provide consultation and
services to Jiangsu Yanggu in the areas of management, human resources, technology and intellectual property rights. For such services,
Jiangsu Yanggu agrees to pay service fees of
100
% of its net income to Oriental Culture WFOE and also Oriental Culture WFOE
has the obligation to absorb
100
% of the losses of Jiangsu Yanggu.
The WFOE exclusively owns any intellectual property
rights arising from the performance of this Technical Consultation and Services Agreement. The term of the Technical Consultation and
Service Agreement is
20
years until May 7, 2039. Oriental Culture WFOE may terminate this agreement at any time by giving 30 days'
written notice to Jiangsu Yanggu.
Equity Pledge Agreement
Pursuant to the Equity Pledge Agreements among
Oriental Culture WFOE, Jiangsu Yanggu and Jiangsu Yanggu's shareholders dated May 8, 2019, each of Jiangsu Yanggu's shareholders
pledged all of their equity interests in Jiangsu Yanggu to Oriental Culture WFOE to guarantee Jiangsu Yanggu's performance of relevant
obligations and indebtedness under the Technical Consultation and Services Agreement and other agreements. If Jiangsu Yanggu breaches
its obligations under the Contractual Agreements, Oriental Culture WFOE, as pledgee, will be entitled to certain rights, including the
right to dispose of the pledged equity interests in order to recover the damages associated with such breach. The pledge is valid until all of Jiangsu Yanggu's shareholders are no longer shareholders of Jiangsu Yanggu, or until the satisfaction of all
Jiangsu Yanggu's obligations under the Contractual Agreements.
Equity Option Agreement
Pursuant to the Equity Option Agreement among
Oriental Culture WFOE, Jiangsu Yanggu and Jiangsu Yanggu's shareholders dated May 8, 2019, Oriental Culture WFOE has the exclusive
right to require Jiangsu Yanggu's shareholders to fulfill and complete all approval and registration procedures required under PRC
laws for Oriental Culture WFOE to purchase, or designate one or more persons to purchase, each shareholders' equity interests in
Jiangsu Yanggu, in one or multiple transactions, at any time or from time to time, at Oriental Culture WFOE's sole and absolute
discretion. The purchase price shall be the lowest price allowed by PRC laws. The Equity Option Agreement shall remain effective until
all the equity interests owned by Jiangsu Yanggu's shareholders have been legally transferred to Oriental Culture WFOE or its designee(s).
Voting Rights Proxy and Financial Supporting
Agreements
Pursuant to the voting rights proxy and financial
supporting agreements, as amended, among the shareholders of Jiangsu Yanggu and Oriental Culture WFOE, Jiangsu Yanggu's shareholders
have given Oriental Culture WFOE an irrevocable proxy to act on their behalf on all matters pertaining to Jiangsu Yanggu and to exercise
all of their rights as shareholders of Jiangsu Yanggu, including the right to attend shareholders meeting, to exercise voting rights and
to transfer all or a part of their equity interests in Jiangsu Yanggu. In consideration of such granted rights, Oriental Culture WFOE
agrees to provide the necessary financial support to Jiangsu Yanggu whether or not Jiangsu Yanggu incurs losses, and agrees not to request
repayment if Jiangsu Yanggu is unable to do so. The agreements is in effect for
20
years until May 7, 2039.
Based on the foregoing contractual arrangements, which grant
Oriental Culture WFOE effective control of Jiangsu Yanggu and its subsidiaries and obligates Oriental Culture WFOE to absorb
100
% of the
risk of loss from its activities, as well as enable Oriental Culture WFOE to receive
100
% of the expected residual returns, the Company
accounts for Jiangsu Yanggu and its subsidiaries as VIEs. Accordingly, the Company consolidates the accounts of Jiangsu Yanggu and its
subsidiaries in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission ("SEC"), and the Financial
Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Section 810-10, Consolidation.
F-
8
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On January 28, 2021, Oriental Culture WFOE entered
into an Amended and Restated Equity Pledge Agreement, an Amended and Restated Equity Option Agreement, and an Amended and Restated Voting
Rights Proxy and Financial Supporting Agreement ("Amended and Restated VIE Agreements") with Jiangsu Yanggu and all shareholders
of Jiangsu Yanggu in order to amend and restate the Equity Pledge Agreement, Equity Option Agreement, and Voting Rights Proxy and Financial
Supporting Agreement originally entered by the parties in May, 2019 ("Original VIE Agreements"). The Amended and Restated
VIE Agreements were made principally to reflect a change of the share ownership of Jiangsu Yanggu as a result of the transfer by Mr. Weipeng
Liang of his
10
% equity interest in Jiangsu Yanggu to Ms. Yuanyuan Xiao on January 28, 2021. Except for the change of the share ownership
of Jiangsu Yanggu due to such equity transfer, there are no other changes to the terms of the Original VIE Agreements.
The accompanying consolidated financial statements
reflect the activities of the Company and each of the following entities:
Name
Background
Ownership
China International Assets and Equity of Artworks Exchange Limited ("International Culture")
● A Hong Kong company
● Incorporated on November 22, 2013, commenced operations in March 2018.
● Engages in providing an online platform that facilitates e-commerce of collectible and artwork trading
100%
HKDAEx Limited ("HKDAEx")
● A Hong Kong company
● Incorporated on April 18, 2018
● Engages in providing an online platform that facilitates e-commerce of certain commodities trading
100%
Oriental Culture BVI
● A British Virgin Islands company
● Incorporated on December 6, 2018
100%
Oriental Culture HK
● A Hong Kong company
● Incorporated on January 3, 2019
100% owned by Oriental Culture BVI
Oriental Culture WFOE
● A PRC limited liability company and deemed a wholly foreign owned enterprise ("WFOE")
● Incorporated on May 7, 2019
100% owned by Oriental Culture HK
Jiangsu Yanggu
● A PRC limited liability company
● Incorporated on August 23, 2017, commenced operations in March 2018.
● Holding company of Nanjing Yanyu and Nanjing Yanqing
VIE of Oriental Culture WFOE
Nanjing Yanyu Information Technology Co., Ltd. ("Nanjing Yanyu")
● A PRC limited liability company
● Incorporated on June 7, 2018
● Provides support services to Jiangsu Yanggu, International Culture, HKDAEx, Kashi Longrui and Kashi Dongfang
100% owned by Jiangsu Yanggu
Nanjing Yanqing Information Technology Co., Ltd. ("Nanjing Yanqing")
● A PRC limited liability company
● Incorporated on May 17, 2018
● Holding company of Kashi Longrui and Kashi Dongfang
100% owned by Jiangsu Yanggu
Kashi Longrui Business Management Service Co., Ltd. ("Kashi Longrui")
● A PRC limited liability company
● Incorporated on July 19, 2018
● Operating entity provides marketing services
100% owned by Nanjing Yanqing
Kashi Dongfang Cangpin Culture Development Co., Ltd. ("Kashi Dongfang")
● A PRC limited liability company
● Incorporated on August 29, 2018
● Operating entity provides listing and warehouse services
100% owned by Nanjing Yanqing
F-
9
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 – Summary of significant accounting
policies
Basis of presentation
The accompanying consolidated financial
statements were prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.
GAAP") and information pursuant to the rules and regulations of the Securities Exchange Commission ("SEC").
Principles of consolidation
The consolidated financial statements include
the accounts of the Company, its subsidiaries, and their VIEs. All intercompany transactions and balances are eliminated in consolidation.
Recapitalization
On November 8, 2019, the Company effected a 2
for 1 forward share split of all issued and outstanding ordinary shares of the Company. In addition, all existing shareholders agreed
to surrender to the Company as treasury shares,
12.5
% of the then outstanding ordinary shares (
3,100,000
ordinary shares) for no consideration.
On May 28, 2020, all existing shareholders of the Company agreed to surrender
6,510,000
ordinary shares, or
30
% of our
then outstanding ordinary shares, at no consideration to be reserved as treasury shares of the Company. These transactions were treated
as a recapitalization prior to the Company's initial public offering. All share and per share amounts were retroactively adjusted
for this recapitalization for all periods presented.
Use of estimates and assumptions
The preparation of consolidated financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company's consolidated
financial statements include revenue recognition, allowance for doubtful accounts, the useful lives of property and equipment and intangible
assets and impairment of long-lived assets. Actual results could differ from these estimates.
Foreign currency translation and transactions
The reporting currency of the Company is the U.S.
dollar. The functional currency for our holding company is the U.S. dollar. In the PRC, the Company conducts its businesses in the local
currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by
the People's Bank of China at the end of the period. In Hong Kong, the Company conducts its business in the local currency, Hong
Kong dollar (HKD), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the Federal
Reserve at the end of the period. The statements of income and cash flows are translated at the average translation rates during the reporting
periods and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in
accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the functional currency are included in the results of operations as incurred.
F-
10
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Translation adjustments are included in
accumulated other comprehensive income. The balance sheet amounts, with the exception of shareholder's equity at December 31,
2022 and December 31, 2021 were translated at RMB
6.96
and RMB
6.38
to one U.S. dollar (USD), respectively. The average translation
rates applied to the consolidated statements of income and cash flows for years ended December 31, 2022, 2021 and 2020 were RMB
6.73
, RMB
6.45
and RMB
6.90
to one USD. The balance sheet amounts, with the exception of shareholder's equity at December 31,
2022 and 2021 were translated at HKD
7.80
and HKD
7.80
to one USD, respectively. The average translation rates applied to the
consolidated statements of income and cash flows for years ended December 31, 2022, 2021 and 2020 were HKD
7.83
, HKD
7.77
and HKD
7.76
to one USD, respectively. The shareholder's equity accounts were translated at their historical rates. Amounts reported
on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance
sheets.
Fair value measurement
The accounting standards regarding fair value
of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of
financial instruments held by the Company.
The accounting standards define fair value, establish
a three-level valuation hierarchy for disclosures of fair value measurements and enhance disclosure requirements for fair value measures.
The three levels are defined as follows:
●
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
●
Level 2 inputs to the valuation methodology include quoted prices, other than those included in Level 1, for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
●
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.
The carrying amounts included in current assets
and current liabilities in the consolidated balance sheets approximate their fair values because of the short-term nature of such instruments.
Fair value disclosure:
December 31, 2022
Fair Value
Cost
Level 1
Level 2
Level 3
Short-term investment (Restricted)
$
4,703,323
$
-
$
4,703,323
$
-
December 31, 2021
Fair Value
Cost
Level 1
Level 2
Level 3
Short-term investment
$
3,748,900
$
-
$
3,748,900
$
-
The Company values its short-term investment using
alternative pricing sources and market observable inputs, and accordingly the Company classifies the valuation techniques that use these
inputs as Level 2. This investment has original maturities of less than
1
year and the carrying value approximates its fair value.
Cash and equivalents
Cash and equivalents consist of cash in bank
and money market funds which are unrestricted as to immediate withdrawal and use.
Restricted cash
On July 1, 2022, Mr. Huajun Gao and Mr.
Aiming Kong, each an
11.5
% shareholder of Oriental Culture Holding LTD (the "Company"), were detained by Nan County
Public Safety Bureau of Yiyang City, Hunan Province, China. On July 26, 2022, Nan County People's Procuratorate approved the
arrest of Mr. Gao and Mr. Kong with a charge of illegal business operation of Nanjing Jinwang Art Purchase E-commerce Co., Ltd., a
company controlled by Mr. Gao and Mr. Kong ("Nanjing Jinwang"). On July 1, 2022, Nan County Public Safety Bureau froze
certain bank accounts of Kashi Longrui Business Management Services Co., Ltd. ("Kashi Longrui"), Kashi Dongfang Cangpin
Culture Development Co., Ltd. ("Kashi Dongfang") and Nanjing Yanyu Information Technology Co., Ltd. ("Nanjing
Yanyu"), all subsidiaries of Jiangsu Yanggu Culture Development Co., Ltd., the variable interest entity of the Company in
China (the "VIE") because they, each had business relationship with Nanjing Jinwang. The total restricted cash was
$
11,796,388
as of December 31, 2022.
F-
11
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Short-term investments
The short-term investment is an investment
in a bank-issued wealth management product with underlying investments in cash, bonds and equity funds. The investment products are issued
by Ping An Bank. The investments have a maturity of less than
1
year and their carrying value approximates their fair value. The gain
from sale of these investments is recognized in the statements of income and comprehensive income. Earnings from these investments for
the years ended December 31, 2022, 2021 and 2020 was $
156,066
, $
169,065
and $
93,007
, respectively. Due to the issue mentioned
in Restricted cash, all short-term investments were $
4,703,323
as of December 31, 2022 was restricted.
Accounts receivable, net (including related
parties)
Accounts receivable is amounts due from
the Company's customers. An allowance for doubtful accounts may be established and recorded based on management's assessment
of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular
basis to determine if the allowance for doubtful accounts is adequate and adjusts the allowance when necessary. Delinquent account balances
are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.
Other receivables and prepaid expenses
Other receivables that are short term include employee advances, such as travel advance, advance to purchase office supplies in the normal course of business and certain short-term
deposits. An allowance for doubtful accounts may be established and recorded based on management's assessment of the likelihood
of realization or collection. Management reviews these items on a regular basis to determine if the allowance for doubtful accounts is
adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against the allowance for doubtful accounts
after management has determined that the likelihood of realization or collection is not probable. No allowance was required as of December
31, 2022 or 2021.
Prepaid expenses include advance payments made
to vendors for certain prepaid services such as system service fees, prepaid rent for our office (with lease under one year) and prepaid
taxes.
Other receivables – related party
Other receivables – related party consist
of funds which are held on a trading platform trust account with Nanjing Jinwang Art Purchase E-commerce Co., Ltd., which is owned by
Huajun Gao and Aimin Kong, each is an
11.5%
beneficial owners of the Company. The funds are not restricted and can be withdrawn and used
after the Company completes the necessary administrative procedures. The Company normally makes withdrawals from this account monthly.
The outstanding balance was paid back to the Company in April 2023.
Escrow
In connection with the Company's initial
public offering in December 2020, $
600,000
of the net proceeds was deposited into an escrow account as security for the underwriters for
24 months from the closing of the offering to cover any potential claims related to the offering. The full amount of $
600,000
was released
to the Company in January 2023.
F-
12
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deposit
The Company entered into a memorandum of understanding
("MOU") to acquire office buildings and the related land use rights in November 2020 with a third-party seller. The close
of the transaction was dependent on the seller obtaining a permit regarding the proposed use of the site. Subsequent to December 31, 2020,
the Company terminated the MOU as the seller was unable to obtain the required permit and the Company received a full refund of the deposit
(see Note 5).
Property and equipment
Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated
useful lives of the assets with no residual value. The estimated useful lives are as follows:
Useful Life
Office equipment and furnishings
1
-
5
years
Electronic equipment
2
-
5
years
Server room equipment
5
years
Vehicles
5
years
Office building
35
years
Leasehold improvements
lesser of lease term or expected useful life
The cost and related accumulated depreciation
and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated
statements of income and other comprehensive income. Expenditures for maintenance and repairs are expensed as incurred, while
additions, renewals and betterments, which are expected to extend the useful life of an asset, are capitalized. The Company also re-evaluates
the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful
lives.
Construction-in-progress
represents material, contractor and labor costs, design fees and inspection fees in connection with the construction of the Company's
office building in Jiangsu, China. See Note 7 for details.
Intangible assets, net
Intangible assets, net, are stated at cost, less
accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets
as follows:
Classification
Estimated
Useful Life
Artwork and collectible trading platform
5
years
Software
5
years
Impairment for long-lived assets
Long-lived assets, including property and
equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse
change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be
recoverable. The Company assesses the recoverability of the asset based on the undiscounted future cash flows the asset is expected
to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the
asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an
impairment is identified, the Company reduces the carrying amount of the asset to its estimated fair value based on a discounted
cash flow approach or, when available and appropriate, to comparable market values. For the years ended December 31, 2022,2021 and
2020, the Company recorded
nil
, $
25,590
and
nil
of impairment loss digital assets.
F-
13
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Investments
Entities in which the Company has the ability
to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence
is generally considered to exist when the Company has voting shares of
20
% to
50
%, and other factors, such as representation
on the board of directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method
of accounting is appropriate. Under this method of accounting, the Company records its proportionate share of the net earnings or losses
of equity method investees and a corresponding increase or decrease to the investment balances. Dividends received from the equity method
investments are recorded as reductions in the cost of such investments. The Company generally considers an ownership interest of
20
% or
higher to represent significant influence. The Company accounts for the investments in entities over which it has neither control nor
significant influence, and no readily determinable fair value is available, using the investment cost minus any impairment, if necessary.
The Company's investment of
18
% ownership of Zhongcang Warehouse Co., Ltd. was $
501,802
and $
548,151
as of December 31, 2022 and
2021, respectively, and is accounted for using the cost method.
In March 2022, the Company's VIE Jiangsu
Yanggu entered into an equity subscription agreement to purchase
11.875
% equity interest of Beijing Jiu Yu Ling Jing
Technology Co., Ltd. ("JYLJ"), a company incorporated in the PRC, which primarily engages in wine and alcohol product merchants
and customers, as well as product launch, brand showcase, marketing and promotion and it is currently in the process of developing a "Wine
and Spirits" metaverse, and the amount raised through increase of share capital will be mainly used for this development. JYLJ's
total registered capital is RMB
60
million (approximately USD
9.2
million). Jiangsu Yanggu's subscription amount
is RMB
6
million and RMB
3
million was paid in March 2022. The remaining RMB
3
million is to be paid upon
further resolution from the board of JYLJ. As of December 31, 2022, the Company's investment in YLJ was $
430,750
, and is accounted
for using the cost method.
Investments are evaluated for impairment when
facts or circumstances indicate that the fair value of the long-term investment is less than its carrying value. An impairment loss is
recognized when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether
a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration
of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near term prospects of the investment;
and (v) ability to hold the security for a period of time sufficient to allow for any anticipated in fair value. No events have occurred
that indicated a decline in fair value that is other-than-temporary for the years ended December 31, 2022 and 2021.
Certificate of deposits
The Company has a certificate of deposit
with a bank which expires on May 20, 2023 with interest of
3.575
%. The Company is subject to an early withdrawal
penalty if redeemed before maturity. Interest income was approximately $
106,302
, $
58,000
and
nil
for the year ended December
31, 2022, 2021 and 2020. As of December 31, 2022, the deposit is less than one year and is reclassified to restricted investment on
the Company's consolidated balance sheet as it was also restricted per the investigation related to the Company's
related party.
Deferred revenue
Payments received from customers before all the relevant criteria for
revenue recognition are recorded as deferred revenue.
December 31,
2022
December 31,
2021
Beginning balance
$
697,863
$
243,355
Customer advances
16,803,450
36,991,645
Recognized as revenues
(
16,993,268
)
(
36,542,832
)
Effect of exchange rates
(
59,008
)
5,695
Ending balance
$
449,037
$
697,863
Revenue recognition
The Company follows FASB ASC 606, Revenue from
Contracts with Customers, for recognizing its revenue. The core principle underlying the revenue recognition standard is that the Company
will recognize revenue to represent the transfer of services to customers in an amount that reflects the consideration to which the Company
expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether
revenue should be recognized when control of services transfers to a customer. Under the guidance
of ASC 606, the Company is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations
in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the
contract and (e) recognize revenue when (or as) the Company satisfies its performance obligation. Revenues are recorded, net of sales
related taxes and surcharges.
The Company continues to derive its revenues from
service contracts with its customers with revenues being recognized upon performance of services. Persuasive evidence of an arrangement
is demonstrated via service contracts and invoices; and the consideration to the customer is fixed upon acceptance of the sales contract. At
times, the Company offers incentives and rebates to its customers directly and the Company accounts for these incentives payable to customers
as a reduction of the contract price.
F-
14
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company's revenues are recognized when all performance obligations are satisfied. The Company's commission expenses to its sales agents
are expensed when incurred.
The Company is an online provider of collectibles
and artwork e-commerce services, which allows artists and art dealers and owners to access the art trading market with a wider range of
artwork investors through the Company's platforms. The Company currently facilitates trading by individual and institutional customers
of artwork, collectibles and commodities on the Company's online platforms. In addition to collectibles and artwork, the Company
has also expanded its platform to trade commodities principally teas.
The Company generates revenue from its services
in connection with the trading of artwork and commodities on its platforms, primarily consisting of listing service fees, transaction
fees, marketing services fees and other revenues collected from traders (the Company's customers).
The Company has cooperative agreements with third
parties who are experts and possess new ideas and resources for collectibles/commodities business to co-develop certain niche markets
(such as vintage coins and teas) to be traded on the Company's online platforms. These parties are required to place a security
deposits with the Company until termination of the cooperative agreements and deposit amounts will need to increase as the trading volume
increases. Revenue generated from these niche markets will be shared between the Company and these parties based on pre-agreed rates and
trading volume. The Company accounts for the portion of revenue that needs to be reimbursed to the third parties as a reduction of total
contract revenue to be received from customers. Approximately
nil
, $
119,000
and $
62,000
has been recorded as a reduction of revenue and
payables to these parties for the years ended December 31, 2022, 2021 and 2020, respectively.
Listing service fees
One-time nonrefundable listing service fees are
collected from owners and traders for listing their products on the platform. The Company's only performance obligation is to provide
the listing on the Company's platform over the period requested. The Company recognizes the related revenue upon the completion
of its performance obligations. The fees are determined by contracts with the customers as a fixed percentage of the listing price.
Transaction fee revenue
Transaction fee revenue is generally calculated
based on the transaction value of collectibles, artwork and commodities per transaction. Transaction value is the dollar amount of the
purchase or sale of the collectibles, artwork and commodities after they are listed on the Company's platforms. The Company's
performance obligation is to facilitate the trading transactions. Transaction fee revenue is recognized and collected at the point-in-time
when the transaction is completed. Transaction fee revenue also includes predetermined monthly transaction fees for select traders with
large transactions and are negotiated on a case-by-case basis. Predetermined transaction fees are recognized and earned over the specified
service period.
In 2018, the Company started a customer
reward points program, pursuant to which reward points were issued for opening a new account or referring customers to open accounts
with us during our promotion period. In that regard, customers are required to redeem certain reward points for new listings along
with the regular listing services fees. If a customer does not have any reward points, he/she can purchase them from other customers
on our platform. The Company does not record revenue when customers redeem any points as it is considered as a prerequisite for a
new listing in addition to the regular services fees. The points are traded by and among our customers on the platform and the
Company charges a transaction fee from such points trading. The Company assessed if a material right existed when the Company
initially issued the reward points and if the points represent a separate performance obligation. In general, the points were given
to customers based on existing accounts or promotions without the customers having to acquire services from the Company, therefore
there was no material right and no separate performance obligation exists. There is no liability for unredeemed awards. Transaction
fee revenue from the trading of reward points amounted to approximately $
1.1
million, $
3.4
million and $
2.6
million for the years
ended December 31, 2022, 2021 and 2020, respectively.
F-
15
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Predetermined transaction fees received in advance
of the specified service period are recorded as deferred revenue.
Marketing service fees
Marketing service fees are usually collected after
the Company completes its services and includes the following type of services:
(1)
For certain marketing service agreements, the Company promises to assist its customer in connection with his/her listing and trading of his/her collectible/artwork or commodities on the Company's platforms, which mainly includes consultation and supporting services of the marketability for the collectible/artwork; assessing its market value and market acceptance for the collectible/artwork or commodities; and assisting in the application and legal protection required for the customer's collectible/artwork or commodities to be approved for listing on the Company's platforms. For marketing service contracts in which the related performance obligations can be completed within a short period of time, the Company recognizes the related revenue upon the completion of its performance obligations.
(2)
Marketing service agreements also includes providing promotional services for customers' items as where to place ads on well-known cultural and art exchange websites in China, to provide online and offline marketing services including cooperation with auction houses and participate in industry-related exhibitions and fairs.
The marketing service fees are charged based on
the type of listing session that the customer applies for and whether the customer has listed and sold collectibles on other platforms
before, and they are not tied to the type or value of the underlying collectible/artwork. Marketing service contracts and fees are recognized
upon the completion of the performance obligation.
Other revenues
Other revenues (including related parties of $
166,325
,
$
233,157
and $
213,172
for the years ended December 31, 2022, 2021 and 2020, respectively) primarily includes service fees for IT technical
support to customers and other revenues from agency recommendation fees. IT technical support fees are negotiated on a case by case basis
and are recognized when the related services have been performed based on the specific terms of the contract. Agency recommendation fees
are mainly training and consulting services provided to certain traders/agents for them to be qualified. Upon completion of the training
and consultation, these qualified traders/agents may introduce the Company's platform and services to potential customers to list
their collectibles and artwork with the Company for a fee or promote their own products on the Company's platforms. The Company's
performance obligation is completed and revenue is recognized upon completion of training and consultation services.
The Company disaggregated its revenue into the
following four categories:
Years Ended
December 31,
2022
2021
2020
Listing service fees
$
1,244,251
$
6,900,561
8,405,211
Transaction fees
13,643,958
24,462,861
7,075,283
Marketing service fees
2,749,224
5,750,901
1,370,164
Other revenues*
175,706
482,137
588,144
Total
$
17,813,139
$
37,596,460
$
17,438,802
*
Including $166,325, $233,157 and $213,172 for the years ended December 31, 2022, 2021 and 2020, respectively, from related parties.
F-
16
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cost of revenues
Cost of revenues consist of compensation including
social welfare and benefits for the Company's IT, risk management and customer services team, appraisal fees, online cloud service
fees, storage fees paid to related party, and depreciation and amortization of hardware and software for the Company's trading platforms.
Selling and marketing expenses:
Selling and marketing expenses includes salary
and benefits for our employees in the sales and marketing department and marketing and advertising expenses. Selling expenses also include
incentive payments to third parties that refer new traders to utilize the Company's e-commerce trading platforms.
Website advertising expenses which are included
in selling and marketing expenses to related party were $
43,590
, $
359,968
and $
1,762,652
for the years ended December 31, 2022,
2021 and 2020, respectively.
Value added taxes ("VAT")
Revenue is the invoiced value of services,
net of VAT. The VAT is based on the gross sales price and VAT rates range up to
6
%, depending on the type of services provided. Entities
that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. The net
VAT balance between input VAT and output VAT is recorded in taxes payable or other receivables and prepaid expenses. All VAT returns
filed by the Company's subsidy, VIE and its subsidiaries in China, have been and remain subject to examination by the tax authorities
for five years from the date of filing.
Income taxes
The Company accounts for income taxes in accordance
with FASB ASC Topic 740, "Income Taxes." Under the asset and liability method as required by this accounting standard, deferred
income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the income
tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred
taxes.
The charge for taxation is based on the results
for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred taxes are accounted for using the asset
and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities
in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax. Deferred tax liabilities
are recognized for all future taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that
taxable income will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax
rates that are expected to apply to the period when the asset is realized or the liability is settled.
Deferred taxes are charged or credited in the
income statement, except when it is related to items credited or charged directly to equity. Net deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the net deferred tax
assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
An uncertain tax position is recognized as a benefit
only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination
being presumed to occur. The amount recognized is the largest amount of tax benefit that has a greater than
50
% likelihood of being realized
on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest
incurred related to underpayment of income taxes are classified as income tax expense in the period incurred. PRC tax returns filed in
2021 are subject to examination by the applicable tax authorities. Tax returns filed in Hong Kong from 2018 to 2021 are subject to examination.
F-
17
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Leases
The Company adopted FASB ASU 2016-02, "Leases"
(Topic 842) for the year ended December 31, 2021, and elected the practical expedients that does not require us to reassess: (1)
whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3)
initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting
policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to
treat the lease and non-lease components of a lease as a single lease component. Upon adoption, the Company recognized $
34,608
of a right of use ("ROU") assets and same amount of lease liabilities based on the present value of the future minimum
rental payments of leases, using an incremental borrowing rate of
4.75
% based on the duration of lease terms.
Operating lease ROU assets and lease liabilities
are recognized at the adoption date or the commencement date, whichever is earlier, based on the present value of lease payments over
the lease term. Since the implicit rate for the Company's leases is not readily determinable, the Company used its incremental borrowing
rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing
rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments,
in a similar economic environment and over a similar term.
Lease terms used to calculate the present value
of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable
certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating
lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception,
therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally
do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis
over the lease term.
The Company reviews for impairment of its ROU
assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets
when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment
of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash
flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset
group and include the associated operating lease payments in the undiscounted future pre-tax cash flows.
Other Income, net
Other income includes government subsidies
from Xinjiang Province of approximately $
240,000
to promote local business development of various industries, Kashi Dongfang
qualified in establishing business in Kashi, there is no services required on Kashi Dongfang and no further commitment for the
grant. Other income also includes VAT refund of approximately $
61,000
. As part of VAT reform in 2019, a taxpayer in certain service
industries was allowed to reclaim an additional
10
% of input VAT credit against the amount of VAT payable from April 1, 2019 to
December 31, 2022. Other income also includes approximately $
112,000
rental income that the Company subleased part of the office
building in 2022. The net other income is approximately $
269,000
, $
193,000
and $
169,000
for the years ended December 31, 2022, 2021
and 2020, respectively.
Commitments and Contingencies
In the normal course of business, the Company
is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters,
such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable
that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments
including historical factors and the specific facts and circumstances of each matter.
F-
18
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Earnings per share
("EPS")
Basic EPS are computed by dividing
income available to shareholders of the Company by the weighted average ordinary shares outstanding during the period. Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares (outstanding
warrants) were exercised and converted into ordinary shares. For the years ended December 31, 2022, 2021 and 2020, there were no dilutive shares.
Statutory Reserves
Pursuant to the laws applicable to the PRC,
PRC entities must make appropriations from after-tax profits to the non-distributable statutory surplus reserve fund. Subject to
certain cumulative limits, the statutory surplus reserve fund requires annual appropriations of
10
% of after-tax profit until the
aggregated appropriations reach
50
% of the registered capital (as determined under accounting principles generally accepted in the
PRC ("PRC GAAP") at each year-end. If the Company has accumulated losses from prior periods, the Company is able to use
the current period net income after tax to offset against the accumulated loss. For the years ended December 31, 2022, 2021 and
2020, the Company appropriated $
12,410
, which is from Yanyu, $
0
and $
0
to the statutory reserve fund. The Company has met the
required maximum contributions to the statutory reserves for both of its operating entities in China, Kashi Dongfang and Kashi
Longrui.
Employee benefits
Full-time employees of the Company are entitled
to staff welfare benefits including medical care, housing funds, pension benefits, unemployment insurance and other welfare benefits,
which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages
of the employees' respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash
contributions to the state-sponsored plans. The expenses for the plans were $
124,856
, $
105,565
and $
61,305
, for the years ended December
31, 2022, 2021 and 2020, respectively.
Segments
FASB ASC 280, Segment Reporting, establishes standards
for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as
well as information about geographical areas, business segments and major customers in financial statements for details on the Company's
business segments.
The Company uses the management approach to determine
reportable operating segments. The management approach considers the internal organization and reporting used by the Company's chief
operating decision maker ("CODM") for making decisions, allocating resources and assessing performance. The Company's
CODM has been identified as the Chief Executive Officer of the Company, who reviews consolidated results when making decisions about allocating
resources and assessing performance of the Company.
Based on management's assessment, the Company
determined that it has only
one
operating segment and therefore
one
reportable segment as defined by ASC 280, which is facilitating e-commerce
of artwork/collectables trading. All of the Company's net revenues were generated in the PRC and Hong Kong.
F-
19
ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Recently issued accounting pronouncements
In May 2019, the FASB
issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement
of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses
on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13
added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13
also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value
is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments — Credit Losses — Available-for-Sale
Debt Securities. The amendments in this Update address those stakeholders' concerns by providing an option to irrevocably elect
the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition
relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar
financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments
in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued
ASU No. 2019-10, which to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain
smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for
fiscal years beginning after December 15, 2022. The adoption of this ASU is not expected to have a material effect on the Company's consolidated
financial statements.
Except as mentioned above, the Company does not
believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's
consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.
Note 3 – Variable interest
entity
On May 8, 2019, Oriental Culture WFOE entered
into Contractual Arrangements with Jiangsu Yanggu and its shareholders. The significant terms of these Contractual Arrangements are summarized
in "Note 1 - Nature of business and organization" above. As a result, the Company classifies Jiangsu Yanggu and its subsidiaries
as VIEs. Please also see Note 14 –Commitments and Contingencies for uncertainties of VIE.
A VIE is an entity that has either a total equity
investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose
equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected
residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has
a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Oriental Culture WFOE
is deemed to have a controlling financial interest and is the primary beneficiary of Jiangsu Yanggu and its subsidiaries because it has
both of the following characteristics:
(1)
The power to direct activities at Jiangsu Yanggu that most significantly impact such entity's economic performance; and
(2)
The obligation to absorb losses of, and the right to receive benefits from Jiangsu Yanggu that could potentially be significant to such entity.
Accordingly, the accounts of Jiangsu Yanggu and
its subsidiaries are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation.
F-
20
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
January 28, 2021, Oriental Culture WFOE entered into an Amended and Restated Equity Pledge Agreement, an Amended and Restated Equity
Option Agreement, and an Amended and Restated Voting Rights Proxy and Financial Supporting Agreement ("Amended and Restated VIE
Agreements") with Jiangsu Yanggu and all shareholders of Jiangsu Yanggu in order to amend and restate the Equity Pledge Agreement,
Equity Option Agreement, and Voting Rights Proxy and Financial Supporting Agreement originally entered by the parties in May, 2019 ("Original
VIE Agreements"). The Amended and Restated VIE Agreements were made principally to reflect a change of the share ownership of Jiangsu
Yanggu as a result of the transfer by Mr. Weipeng Liang of his
10
% equity interest in Jiangsu Yanggu to Ms. Yuanyuan Xiao on January
28, 2021. Except for the change of the share ownership of Jiangsu Yanggu due to such equity transfer, there are no other changes to the
terms of the Original VIE Agreements.
The
carrying amounts of the VIEs' consolidated assets and liabilities are as follows:
December 31,
2022
December 31,
2021
Current
    asset:
$
34,200,319
$
26,650,671
Property
    and equipment, net
9,417,777
9,890,566
Other
    noncurrent assets
1,049,683
3,801,822
Total
    assets
44,667,779
40,343,059
Total
    liabilities
(
4,047,943
)
(
3,687,973
)
Total net assets
$
40,619,836
$
36,655,086
December 31,
2022
December 31,
2021
Current
    liabilities:
Accounts
    payable
$
2,889,312
$
1,483,827
Accounts
    payable – related parties
28,727
1,665
Deferred
    revenue
449,037
697,863
Other payables
    and accrued liabilities
667,495
1,474,792
Taxes
    payable
13,372
29,826
Total
    liabilities
$
4,047,943
$
3,687,973
The
summarized operating results of the VIEs are as follows:
Years Ended
December 31,
2022
2021
2020
Operating
    revenues
$
17,813,254
$
37,596,460
$
17,438,918
Income
    from operations
$
6,728,516
$
15,203,703
$
6,793,583
Net
    income
$
7,314,651
$
15,762,806
$
6,948,599
F-
21
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Note
4 – Accounts receivables, net
The
Company's net accounts receivable are as follows:
December 31,
December 31,
2022
2021
Trade
    accounts receivable
$
43,282
$
156,852
Less:
    allowance for doubtful accounts
(
43,075
)
(
109,792
)
Accounts
    receivable, net
$
207
$
47,060
Note
5 – Other receivables and prepaid expenses
Other
receivables consist of the following:
December 31,
2022
December 31,
2021
Rent
    and other deposits
$
16,296
$
14,716
Advance
    to third parties*
2,799,874
-
Employee
    advances and others
915,242
8,095
Prepaid
    VAT taxes
63,682
226,206
Prepaid
    consulting fee
646,852
1,136,377
Total
    other receivables and prepaid expenses
$
4,441,946
$
1,385,394
*
This advance was short term, non-interest bearing and due on demand. The Company collected full amount of advance by March 22, 2023.
Note
6 – Deposit
On
November 16, 2020, the Company entered into a memorandum of understanding ("MOU") with a third-party to acquire approximately
39,000
square meters of office and warehouse space and related land use rights in Nanjing city to meet the Company's growing need
for office and warehouse space. The price per the MOU was RMB
195
million (approximately $
29.6
million) with land use rights to
expire on October 7, 2052. The current land use rights for such office and warehouse on site were for industrial use purposes and the
seller agreed to apply for approval with the local government to change the use of rights from industrial to research and development
before the parties would proceed further with the MOU. The Company was planning to use the property for its research and development
center. The Company paid a deposit of RMB
65.0
million (approximately $
9.9
million) after signing the MOU. A second payment of RMB
22
million (approximately $
3.4
million) was made upon finalization of the research center development plan with the final payment to be
paid when the permit is approved in six months and the research center is completed. The Company paid the deposit of RMB
87.0
million
(approximately $
13.3
million) as of December 31, 2020. In March 2021, the Company was notified by the seller that the permit may not
be obtained timely or at all. The Company terminated the MOU and the seller refunded RMB
87.0
million (approximately $
13.2
million)
in 2021. There was no termination fee or penalty.
F-
22
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Note
7 – Property and equipment, net
Property
and equipment consist of the following:
December 31,
2022
December 31,
2021
Office and electronic
    equipment
$
328,305
$
355,937
Vehicle
765,250
744,581
Furniture and leasehold improvement
31,285
29,498
Office building
8,457,598
9,238,795
Construction in process
599,319
-
Less:
    accumulated depreciation
(
758,044
)
(
464,522
)
Total
$
9,423,713
$
9,904,289
The Company acquired an office building in Jiangsu,
China on November 17, 2021, the total building is
6,840.41
square meter with 4 floors, which will be used for the Company's operations.
Construction in progress represent ongoing construction
for the office building mentioned above. The construction was to install elevator, HVAC, electrical system and office construction for
the third and fourth floor of the office building to get the office space ready for use. The construction is expected to be completed
in August 2023. The first and second floor was already ready to use when the Company acquired the building. As such, depreciation expenses
for the building for the year ended December 31, 2022 was recorded for the first and second floor of the building which was ready for
use.
Depreciation
expense for the years ended December 31, 2022, 2021 and 2020 was $
340,296
, $
186,551
and $
122,409
, respectively.
Note
8 – Intangible assets, net
Intangible
assets consist of the following:
December 31,
2022
December 31,
2021
Artwork trading
    platform
$
797,568
$
793,310
Software
933,732
902,313
Copyright
-
-
Less:
    accumulated amortization and impairment
(
914,415
)
(
575,602
)
Total
$
816,885
$
1,120,021
Amortization
expenses for the years ended December 31, 2022, 2021 and 2020 was $
333,135
, $
212,672
and $
185,865
respectively.
The
future amortization is as follows:
Twelve
    Months Ending December 31,
Estimated
Amortization Expense
2023
$
320,713
2024
196,955
2025
161,581
2026
136,099
2027
1,537
Total
$
816,885
F-
23
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Note
9 – Other payables and accrued liabilities
Other
payables and accrued liabilities consist of the following:
December 31,
2022
December 31,
2021
Security
    deposits payable*
$
157,961
$
172,552
Salary
    payable**
97,052
884,825
Others
35,137
226,858
Total
$
290,150
$
1,284,235
*
The Company signed cooperation agreements with third parties to co-develop a niche market for its online platforms. The Company provides its platforms and users to promote products provided by the third party developers. Revenue generated from the niche markets will be shared between the Company and these parties. These third- party developers also guarantee certain sales volume yearly and the security deposit will be paid to the Company to make up for the sales target shortfalls at the end of the year. Any remaining security deposits will be returned to these parties upon dissolution of the cooperation agreements. The Company returned approximately nil and recognized approximately nil of deposits for target shortfalls as revenue for the years ended December 31, 2022. The Company returned approximately $
314,000
and recognized approximately $
119,000
of deposits for target shortfalls as revenue for the year ended December 31, 2021. No deposit were returned and no revenue was recognized for the year
ended December 31, 2020.
**
During the years ended December 31, 2022, 2021 and 2020, the Company accrued bonuses payable of approximately $
40,203
, $
789,325
and $
256,000
, respectively.
Note
10 – Taxes
Cayman
Islands
Under
the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gains. Additionally, upon payment of dividends
to the shareholders, no Cayman Islands withholding tax will be imposed.
Hong
Kong
Under
the current Hong Kong Inland Revenue Ordinance, Oriental Culture HK established in Hong Kong is subject to a
16.5
% income tax on taxable
income generated from operations in Hong Kong. Payments of dividends from Oriental Culture HK to us are not subject to any Hong Kong
withholding tax. The Company did not generate any revenue from operations in Hong Kong since its inception through December 31,
2022, and therefore is not subject to any income taxes in Hong Kong.
PRC
The
WFOE and VIEs incorporated in the PRC are governed by the income tax laws of the PRC and the income tax provisions in respect to operations
in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations
and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the "EIT Laws"), domestic enterprises
and Foreign Investment Enterprises (the "FIE") are usually subject to a unified
25
% enterprise income tax rate while preferential
tax rates, tax holidays and even tax exemptions may be granted on case-by-case basis.
Under
the current EIT Law, dividends paid by an FIE to any of its foreign non-resident enterprise investors are subject to a
10
% withholding
tax. Thus, dividends, if and when payable by the Company's PRC subsidiaries to their offshore parent entities, would be subject
to a
10
% withholding tax. A lower tax rate will be applied if such foreign non-resident enterprise investor's jurisdiction of incorporation
has signed a tax treaty or arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes
on income with China. There is such a tax arrangement between the PRC and Hong Kong. Thus, the dividends, if and when payable by the
Company's WFOE to the offshore parent entity located in Hong Kong, would be subject to a
5
% withholding tax rather than the statutory
rate of
10
% provided that the offshore entity located in Hong Kong meets the requirements stipulated by relevant PRC tax regulations.
The Company has not provided for deferred income tax liabilities on the WFOE's undistributed earnings of $
42,087,930
and $
34,785,070
as of December 31, 2022 and 2021, respectively, because the Company controls the timing of the undistributed earnings and it is probable
that such earnings will not be distributed. The Company plans to reinvest those earnings in the PRC operations for the foreseeable future.
F-
24
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Moreover,
the current EIT Law treats enterprises established outside of China with "effective management and control" located in China
as PRC resident enterprises for tax purposes. The term "effective management and control" is generally defined as exercising
overall management and control over the business, personnel, accounting, properties, etc. of an enterprise. The Company, if considered
a PRC resident enterprise for tax purposes, would be subject to the PRC Enterprise Income Tax at the rate of
25
% on its worldwide income
for the period after January 1, 2008 if the only if all of the following conditions are met: (i) the primary location of the day-to-day
operational management is in China; (ii) decisions relating to the enterprise's financial and human resource matters are made or
are subject to approval by organizations or personnel in China; (iii) the enterprise's primary assets, accounting books and records,
company seals, and board and shareholder resolutions, are located or maintained in China; and (iv) at least
50
% of voting board members
or senior executives habitually reside in China. Based upon a review of surrounding facts and circumstances, the Company does not believe
its subsidiaries outside of China is a PRC resident enterprise for PRC tax purposes because the rule only applies to offshore enterprises
controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, and therefore
was not subject to PRC taxes.
Kashi
Longrui and Kashi Dongfang were formed and registered in Kashi in Xinjiang Province, China in 2018. These companies have received an
exemption and will not be subject to income tax for
5
years, which was expired on December 31, 2022. As of December 31, 2022 and 2021, the Company has not recorded any deferred
tax liabilities in light of (1) its tax free arrangement; (2) its compliance with PRC EIT Law in making payments of enterprise income
tax; and (3) Jiangsu Yanggu's inability to pay its net profits to WFOE under the VIE agreement without the Company's determination.
However, any changes with the current effective PRC Tax laws and regulations could result in the Company paying more enterprise income
tax, which would materially and adversely affect the operating and financial performance of the Company.
Tax
savings for the years ended December 31, 2022, 2021 and 2020 amounted to approximately $
1,933,000
, $
4,198,000
and $
2,427,000
,
respectively. The Company's basic and diluted earnings per share would have been lower by $
0.50
, $
0.20
and $
0.16
per share for
the years ended December 31, 2022, 2021 and 2020, respectively, without the preferential tax exemption.
The
following table reconciles China statutory rates to the Company's effective tax rate:
December 31,
2022
December 31,
2021
China
    income tax rate
25.0
%
25.0
%
Tax exemption/preferential
    rate reduction
(
21.1
)%
(
21.6
)%
Change
    in valuation allowance
(
3.8
)%
(
3.4
)%
Effective
    tax rate
0.1
%
-
Deferred
tax assets - China
The
following table summarizes the significant components of deferred tax assets.
December 31,
2022
December 31,
2021
Net
    operating losses
$
961,468
$
820,610
Allowance
    for doubtful accounts
10,769
27,125
Less:
    valuation allowance
(
972,237
)
(
847,735
)
Deferred
    tax assets, net
$
-
$
-
The
following table summarizes the changes in valuation allowance for deferred tax assets.
December 31,
2022
December 31,
2021
Beginning
    balance
$
847,735
$
452,009
Additions
124,502
395,726
Ending
    balance
$
972,237
$
847,735
F-
25
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
Company evaluated the recoverable amounts of deferred tax assets, and provided a valuation allowance to the extent that future taxable
profits will be available against which the net operating loss and temporary difference can be utilized. The Company considers both positive
and negative factors when assessing the future realization of the deferred tax assets and applied weigh to the relative impact of the
evidence to the extent it could be objectively verified.
The
Company's NOL was mainly from the Company's VIE and its subsidiaries' cumulative net operating losses
("NOL") of approximately $
4,521,000
and $
3,786,000
as of December 31, 2022 and 2021, and will start expiring in 2024. Management believes projected
future losses outweighs other factors and made a full allowance of related deferred tax assets.
Taxes
payable consist of the following:
December 31,
2022
December 31,
2021
VAT
    payable
$
6,858
$
27,077
Other
    taxes payable
6,514
2,749
Total
$
13,372
$
29,826
Note
11 – Concentration of credit risk
Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and
equivalents. A depositor has up to RMB
500,000
(approximately $
72,000
) insured by the People's Bank of China Financial
Stability Bureau ("FSD"). As of December 31, 2022 and 2021, approximately $
37,574,000
and $
25,572,000
was deposited in a
bank located in the PRC was not insured by FSD. As of December 31, 2022 and 2021, approximately $
3,421,345
and $
928,913
was
deposited on our trading platform trust account located in the PRC. The account is held at Ping An Bank and entrusted with Nanjing
Jinwang Art Purchase E-commerce Co., Ltd., our related party. This balance is not covered by insurance. While management believes
that these financial institutions and platform fund holder are of high credit quality, it continually monitors their credit
worthiness.
Customer
concentration risk
Three
customers accounted for approximately
59.3
%,
22.5
% and
17.9
% of the Company's accounts receivable as of December 31, 2022
and two customers accounted for approximately
28.5
% and
66.6
% of the Company's accounts receivable as of December 31, 2021.
December 31,
2022
December 31,
2021
Amount
%
Amount
%
Customer A
$
43,075
59.3
%
$
47,054
28.5
%
Customer B
$
16,345
22.5
%
$
-
-
Customer C
$
12,966
17.9
%
$
-
-
Customer D
$
-
0.0
%
$
109,792
66.6
%
All
of the Company's revenue was generated in the PRC.
Vendor
concentration risk
One
vendor, a related party accounted for
30.5
%,
30.1
% and
65.7
% of the Company's purchases for the years ended December 31, 2022,
2021 and 2020, respectively. There is no accounts payable concentration for the years ended December 31, 2022 and 2021.
Note
12 – Related party transactions
a.
Accounts receivable – related parties consist of the following:
Relationship
Nature
December 31,
2022
December 31,
2021
Nanjing Culture Exchange Art Property Exchange Co., Ltd. ("Nanjing Culture")
Mr. Huajun Gao, the general manager and director of Nanjing Culture, and Mr. Aimin Kong, the vice chairman of Nanjing Culture, each beneficially owns 11.5% shares of the Company
Receivable from technological service fee revenue
$
16,345
$
6,070
Jinling Cultural Property Exchange Co., Ltd.("Jinling Cultural")
Its major shareholder is also a major shareholder of Jiangsu Yanggu
Receivable from technological service fee revenue
12,966
2,023
Total
$
29,311
$
8,093
F-
26
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
b.
Accounts payable – related parties consist of the following:
Relationship
Nature
December 31,
2022
December 31,
2021
Kashi Jinwang Art Purchase E-commerce Co., Ltd.
100% owned by Nanjing Jinwang Art Purchase E-commerce Co., Ltd., a related party of the Company
Payable for online advertising expenses
-
1,665
Zhongcang Warehouse Co., Ltd.
An 18% subsidiary of the VIE of the Company
Payable for storage fees
28,727
-
Total
$
28,727
$
1,665
c.
Other payables – related parties consist of the following:
Other
payables – related parties are those nontrade payables arising from transactions between the Company and its related parties, such
as payments paid on behalf of the Company.
Relationship
December 31,
2022
December 31,
2021
Mun
    Wah Wan
Chairman of the board of directors of the Company
3,262
-
Total
$
3,262
$
-
d.
Net revenues – related parties consist of the following:
Relationship
Nature
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Nanjing Culture
Mr. Huajun Gao, the general manager and director of Nanjing Culture, and Mr. Aimin Kong, the vice chairman of Nanjing Culture, each beneficially owns 11.5%  shares of the Company
Technological service fee revenue
$
29,934
$
38,959
$
41,571
Jinling Cultural
It is owned by our 11.5% beneficial shareholder, Huajun Gao
Technological service fee revenue
21,542
22,519
21,042
Hunan Huaqiang Artwork Trading Center Co., Ltd.
49% owned by Jinling Cultural
Technological service fee revenue
17,091
21,821
20,390
Nanjing Jinwang Art Purchase E-commerce Co., Ltd.("Nanjing Jinwang")
It is owned by Huajun Gao and Aimin Kong, each a 11.5% beneficial shareholder of the Company
Technological service fee revenue
-
17,813
-
Kashi Jinwang Art Purchase E-commerce Co., Ltd.
100% owned by Nanjing Jinwang
Technological service fee revenue
97,758
132,045
130,169
Total
$
166,325
$
233,157
$
213,172
F-
27
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
e.
Cost of revenues – related party consists of the following:
Relationship
Nature
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Zhongcang
    Warehouse Co., Ltd.
An 18% subsidiary of the VIE of the Company
Storage fees
$
304,400
$
730,006
f.
Selling and marketing expenses – related party consists of the following:
Relationship
Nature
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Kashi Jinwang Art Purchase E-commerce Co., Ltd.
100% owned by Nanjing Jinwang
Online advertising expenses
$
43,590
$
359,967
In 2019, the Company entered into advertising
contract with Kashi Jinwang Art Purchase E-commerce Co., Ltd. pursuant to which the Company would use advertising space on Kashi Jinwang's
website from January 1, 2019 to December 31, 2022. The Company was charged a yearly advertising fee of approximately $
0.18
million adjustable by actual usage, which was approximately
1.7
% of the Company's initial listing value of collectible or artwork at
the time when the contract was entered. On May 1, 2020, the contract between the Company and Kashi Jinwang Art Purchase E-commerce Co.,
Ltd. was amended and the monthly advertising fee was fixed at
1.5
% of the initial listing value of collectible or artwork from May 1,
2020 to December 31, 2022. The contract was further amended on June 25, 2020, pursuant to which the fee will be
2.25
% of the initial listing
value of collectibles or artwork from July 1, 2020 to December 31, 2020, then return back to
1.5
% from January 1, 2021 to December 31,
2022.
g. During the years ended December 31, 2022,
2021 and 2020, HKDAEx paid approximately $
51,000
, $
65,000
and $
54,000
, respectively, to HKFAEx, a company owned by our Chairman for
accounting and business administration services.
h. The Company entered into a
non-cancellable Office Premises Use Contract with Nanjing Culture and Artwork Property Exchange Co., Ltd. which is controlled
by Huajun Gao and Aimin Kong, each is a
11.5
% beneficial shareholder of the Company, for an office from January 1, 2020 to
December 31, 2020 with a monthly rental of approximately $
14,000
including VAT taxes. The Company renewed the lease under the same
terms from January 1, 2021 to December 31, 2021 and then renewed again to December 31, 2022. Total rental expense for the years
ended December 31, 2022, 2021 and 2020 was approximately $
151,000
, $
158,000
and $
148,000
, respectively.
i. Other receivables – related party consist
of funds which are held in trading platform trust account entrusted with Nanjing Jinwang. The funds are unrestricted as to immediate
withdrawal and use after the Company's customers completed the necessary administrative procedures from the platform. The Company
normally make withdraw monthly. As of March 22, 2023, approximately RMB
6.0
million ($
0.9
million) was returned to the Company.
F-
28
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Note
13 – Equity
Pursuant
to the Amended and Restated Article of Association adopted by a special resolution of the shareholders of the Company dated September
12, 2019, the authorized shares of
50,000,000
ordinary shares were re-designated to
50,000,000
preferred shares of a nominal or par value
of USD
0.0001
each.
On
November 8, 2019,
the shareholders of the Company adopted the Second Amended and Restated Articles of Association to effect a 2 for 1
forward share split of the total authorized and issued and outstanding shares of the Company. As a result of the 2 for 1 forward share
split, the Company's total authorized shares are 1,000,000,000 shares comprising of (i) 900,000,000 ordinary shares with a par
value of $0.00005 each and (ii) 100,000,000 preferred shares with a par value of $0.00005 each, and the Company's issued and outstanding
ordinary shares increased from 12,400,000 shares to 24,800,000 shares. In addition, all existing shareholders agreed to surrender to
the Company as treasury shares, 12.5% of the then outstanding ordinary shares (3,100,000 ordinary shares) for no consideration.
On
May 28, 2020, all existing shareholders of the Company agreed to surrender an additional
6,510,000
ordinary shares, or
30
% of the Company's
then outstanding ordinary shares, at no consideration to be reserved as treasury shares of the Company.
On
December 1, 2020, the Company completed its IPO of
5,065,000
ordinary shares and
59,400
option shares at a public offering price of $
4.00
per share, par value US$
0.00005
per share, resulting in net proceeds to the Company of approximately $
17.3
million after deducting underwriting
commission, offering costs and other expenses.
During
the year ended December 31, 2020, in connection with the IPO, the Company issued warrants to purchase
409,952
ordinary shares to the
underwriters. The underwriters' warrants have a five-year term and an exercise price of $
5.00
per share. On December 17, 2020,
the underwriters exercised options to purchase the
409,952
ordinary shares, on a cashless basis, resulting in the issuance of
130,312
ordinary shares.
On December 7, 2021, the Company entered into
Securities Purchase Agreements ("Agreements") with two investors ("Investors"), pursuant to which the Company
agreed to sell to the Investors in private placements a total of
600,000
ordinary shares (the "Shares") of the Company, par
value $
0.00005
per share, at a purchase price of $
5.00
per share for $
3,000,000
(the "Private Placements").
In connection with offering, the Company has also agreed to issue the warrants to the Investors to purchase up to an aggregate of
600,000
ordinary shares at an exercise price of $
6.00
per share (the "Warrants"). The Warrants have a term of one year and are exercisable
by the holder at any time after the date of issuance and prior to the expiration of the Warrants. The Shares would be issued pursuant
to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. The Company issued
600,000
shares to investors and recorded net proceed of $
2.0
million as of December 31, 2021. Subscription receivable amounted to $
1.0
million as of December 31, 2021. This receivable was received during the year ended December 31, 2022.
On June 6, 2022, the Company entered into a Business
Management Consulting Agreement with Jiangsu Siluete Brand Management Co. Ltd. ("Jiangsu Siluete"), pursuant to which the
Company agreed to issue
182,280
shares to Gao Mei, who is the shareholder and CEO of Jiangsu Siluete, for consulting fee to Jiangsu Siluete
from March 1, 2022 to February 28, 2023. The total stock compensation for the year ended December 31, 2022 was $
464,814
based on grant
date fair value of $
557,777
or $
3.06
per share.
F-
29
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Warrants
The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's
specific terms and applicable authoritative guidance in Financial Accounting Standards Board ("FASB") Accounting Standards
Codification ("ASC") 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging
("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet
the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under
ASC 815, including whether the warrants are indexed to the Company's own ordinary shares and whether the warrant holders could
potentially require "net cash settlement" in circumstances outside of the Company's control, among other conditions
for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance
and as of each subsequent quarterly period end date while the warrants are outstanding.
For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The Company
evaluated its warrants and determined the warrants are indexed to the Company's own stock as the warrants do not contain any
exercise contingencies, the warrants' settlement amount equals the difference between the fair value of the Company's common
stock price and the warrant contract strike price and the only variables which could affect the settlement amount would be inputs to
the fair value for a fixed-for-fixed option on equity shares. The Company also analyzed ASC 815-40-25 to determine whether the warrant
contracts should be classified in stockholders' equity in the Company's balance sheets and concluded that the warrant contracts
meet all of the criteria for classification as equity as the Company is not required to net settle. Based on this analysis, the Company
determined the warrant contracts should be classified as equity.
Following
is a summary of the status of warrants outstanding and exercisable as of December 31, 2022:
Warrants
Weighted
Average
Exercise
Price
Warrants outstanding, as of December 31, 2020
-
$
-
Issued
600,000
6.00
Exercised
-
-
Expired
-
-
Warrants outstanding, as of December 31, 2021
600,000
$
6.00
Issued
-
-
Exercised
-
-
Expired
600,000
$
6.00
Warrants outstanding, as of December 31, 2022
-
$
-
Warrants exercisable, as of December 31, 2022
-
$
-
F-
30
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Restricted
net assets
The
Company's ability to pay dividends is primarily dependent on the Company receiving distributions from its subsidiary. Relevant
PRC statutory laws and regulations permit payments of dividends by Oriental Culture, the WFOE, its VIE Jiangsu Yanggu and subsidiaries
of Jiangsu Yanggu, Nanjing Yanyu, Nanjing Yanqing, Kashi Longrui, and Kashi Dongfang (collectively "Jiangsu Yanggu PRC entities")
only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of
operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected
in the statutory financial statements of Jiangsu Yanggu PRC entities.
Oriental
Culture WFOE and Jiangsu Yanggu PRC entities are required to set aside at least
10
% of their after-tax profits each year, if any, to
fund certain statutory reserve funds until such reserve funds reach
50
% of their registered capital. In addition, Oriental Culture WFOE
and Jiangsu Yanggu PRC entities may allocate a portion of their after-tax profits based on PRC accounting standards to an enterprise
expansion fund and staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable
as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated
by the State Administration of Foreign Exchange ("SAFE").
As
a result of the foregoing restrictions, Oriental Culture WFOE and Jiangsu Yanggu PRC entities are restricted in their ability to transfer
their net assets to the Company. Foreign exchange and other regulations in the PRC may further restrict Oriental Culture WFOE and Jiangsu
Yanggu PRC entities from transferring funds to the Company in the form of dividends, loans and advances. As of December 31, 2022, amounts
restricted are the net assets of Oriental Culture WFOE and Jiangsu Yanggu PRC entities, which were approximately $
40,620,000
.
Equity
Incentive Plan
The
Company's 2021 Omnibus Equity Plan ("the Plan") was approved by the board of directors on November 8, 2021 by unanimous
written consent and approved by the shareholders on December 16, 2021. The Plan allows for awards of up to
4,000,000
ordinary shares.
No shares have been granted as of the date of this report.
Note
14 – Commitments and Contingencies
Contingencies
From
time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business.
Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate,
are not deemed to be material to the consolidated financial statements.
On
July 1, 2022, Mr. Huajun Gao and Mr. Aiming Kong, each an
11.5
% shareholder of Oriental Culture Holding LTD (the "Company"),
were detained by Nan County Public Safety Bureau of Yiyang City, Hunan Province, China. On July 26, 2022, Nan County People's Procuratorate
approved the arrest of Mr. Gao and Mr. Kong with charge of illegal business operation of Nanjing Jinwang Art Purchase E-commerce Co.,
Ltd., a company controlled by Mr. Gao and Mr. Kong ("Nanjing Jinwang"). On July 1, 2022, the bank accounts of Nanjing Jinwang
were frozen by Nan County Public Safety Bureau, including a trust account into which the customers of the Company deposit their security
deposits in order to trade on the Company's two online trading platforms which the Company has entrusted Nanjing Jinwang for escrow.
F-
31
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Also,
on July 1, 2022, Nan County Public Safety Bureau froze certain bank accounts of Kashi Longrui Business Management Services Co., Ltd.
("Kashi Longrui"), Kashi Dongfang Cangpin Culture Development Co., Ltd. ("Kashi Dongfang") and Nanjing Yanyu
Information Technology Co., Ltd. ("Nanjing Yanyu"), all subsidiaries of Jiangsu Yanggu Culture Development Co., Ltd., the VIE because they, each had business relationship with Nanjing Jinwang.
Neither the Company nor its VIE or subsidiaries of its VIE has received
any notification for enforcement charges from Nan County Public Safety Bureau, other than cash and short term investment in the frozen
bank accounts with balances totaling approximately $
16.5
million and due from Nangjng Jinwang of approximately
3.4
million relating to
the Nanjing Jinwang investigation as described above as of December 31, 2022. Currently the customers can freely transfer their deposits
and make their withdrawals based on their actual needs. Mr. Gao and Mr. Kong are not officers, directors or employees of the Company,
its VIE or subsidiaries of the VIE.
Due
to the investigation of Nanjing Jinwang and frozen bank accounts, the business operations of the Company have been materially and negatively
impacted as its customers experienced difficulties withdrawing their security deposits through online banking and have concerns regarding
their deposited funds. The Company has taken remedial measures to assist its customers in withdrawing security deposits, such as through
manual and in person application with the bank to transfer funds, so that they will have confidence in the Company and continue to list
and trade art and collectible products on the online platforms of the Company. However, there can be no assurance that these measures
will restore customer confidence in using the Company's services efficiently or at all.
The
investigation of Mr. Gao, Mr. Kong and Nanjing Jinwang is ongoing. The Company has and will continue to communicate with Nan
County Public Safety Bureau and other government authorities to obtain more information regarding the investigation and to attempt to
unfreeze the bank accounts for the subsidiaries of the VIE. The Company will monitor the development of the investigation and will provide
additional information concerning its impact on the Company's business in due course.
Variable
interest entity structure
In
the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the
Contractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and
(iii) the business operations of the WFOE and the VIEs are in compliance with existing PRC laws and regulations in all material respects.
However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations.
Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing
opinion of the management. If the current corporate structure of the Company or the Contractual Arrangements are found to be in violation
of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations
in the PRC to comply with the changes and the new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect
of the Company's current corporate structure or the Contractual Arrangements is remote based on current facts and circumstances.
The
Company has not provided for deferred income tax liabilities on the PRC entities' undistributed earnings as of December 31, 2022
and 2021, respectively, because the Company controls the timing of the undistributed earnings and it is probable that such earnings will
not be distributed. The Company plans to reinvest those earnings in the PRC indefinitely in the foreseeable future.
Lease
commitments
The
Company has three non-cancellable operating lease agreements for three office units.
These lease agreements have lease terms expiring
between end of June 2022 and July 2024 with a monthly rental of approximately $1,900, $14,000 and $3,900, respectively.
Upon
adoption of ASU 2016-02 on January 1, 2021 for the Company's only lease that is over one year, the Company recognized approximately
$
34,600
of right of use ("ROU") assets and approximately $
34,600
of operating lease liabilities based on the present
value of the future minimum rental payments of leases, using incremental borrowing rate of
4.75
%.
F-
32
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
As
of December 31, 2022, the Company's operating leases had a weighted average remaining lease term of
approximately 1.50 years and weighted average discount rate was
4.75
%.
The
Company's commitments for minimum lease payment under these operating leases as of December 31, 2022 are as follows:
Twelve months ending December 31,
Minimum
lease
payment
2023
$
21,027
2024
11,536
Total undiscounted liabilities
32,563
Less: Imputed interest
264
Total lease liabilities
$
32,299
Rent
expense for the years ended December 31, 2022 and 2021 was $
179,552
and $
186,834
, respectively.
Coronavirus
("COVID-19")
Beginning
in late 2019, there was an outbreak of a novel strain of coronavirus (COVID-19) in China, which has spread rapidly to many parts of the
world. To prevent and control the spread of the pandemic, the Chinese governments issued administrative orders to impose travel and public
gathering restrictions as well as work from home and self-quarantine restrictions in early 2020.
Our
business, financial condition, and results of operations have been adversely affected by the outbreak of COVID-19 as our net revenues
and net income decreased during the first half of 2020. Starting in July 2020, our revenues and net income recovered as individuals and
entities resumed their business activities which were delayed or postponed due to the COVID-19 outbreak. Our revenue and net income increased
for the year ended December 31, 2021 compared to 2020 as we recovered from impact of the pandemic. Our revenue and net income decreased
for the year ended December 31, 2022 compared to 2021 because the outbreak of the
Omicron variant
has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in many part of
China in 2022. Our business and results of operations have been affected due to office closures and disruption in logistics in various
parts of China. China has recently started easing the strict lockdown procedures in early December 2022, which has led to surge in COVID
infections and disrupt our business operations in December 2022 and January 2023. Any future impact of COVID-19 on our operation results
will depend on, to a large extent, future developments and new information that may emerge regarding the duration and resurgence of COVID-19
variants and the actions taken by government authorities to contain COVID-19 or treat its impact, almost all of which are beyond our
control.
Note
15 – Subsequent Events
The
Company has evaluated subsequent events through the date these consolidated financial statements were issued and determined that there
were no subsequent events that required recognition or disclosures in the consolidated financial statements.
Note
16 – Financial information of the parent company
The
Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with the Securities and Exchange
Commission Regulation S-X Rule 5-04 and concluded that it was applicable for the Company to disclose the financial statements for the
parent company.
The
subsidiary did not pay any dividends to the Company for the periods presented. For the purpose of presenting parent only financial information,
the Company records its investment in its subsidiaries and VIEs under the equity method of accounting. Such investments are presented
on the separate condensed balance sheets of the Company as "Investment in subsidiaries and VIEs" and the income of the subsidiaries
and VIEs is presented as "Equity income of subsidiaries and VIEs". Certain information and footnote disclosures generally
included in financial statements prepared in accordance with U.S. GAAP are not required.
F-
33
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
Company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2022 and 2021.
PARENT
COMPANY BALANCE SHEETS
December 31,
December 31,
2022
2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
14,452,747
$
22,086,787
Other current asset
1,324,063
491,000
Escrow
600,000
600,000
Other receivable - intercompany
3,224,949
2,862,436
Total current assets
19,601,759
26,040,223
OTHER ASSETS
Investment in subsidiary
39,653,486
35,881,493
Total other assets
39,653,486
35,881,493
Total assets
$
59,255,245
$
61,921,716
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
$
70,000
$
140,000
Other payables and accrued liabilities
23,958
Other payables - intercompany
9,569,397
14,569,398
Total current liabilities
9,639,397
14,733,356
Total liabilities
9,639,397
14,733,356
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred shares, $
0.00005
par value,
100,000,000
shares authorized,
no
shares issued and outstanding
-
-
Ordinary shares, $
0.00005
par value,
900,000,000
shares authorized,
30,836,992
and
30,654,712
shares issued,
21,226,992
and
21,044,712
shares outstanding as of December 31, 2022 and 2021, respectively
1,542
1,533
Treasury shares, at cost,
9,610,000
shares
(
481
)
(
481
)
Additional paid-in capital
22,349,767
21,884,962
Subscription receivable
-
(
1,000,000
)
Statutory reserves
124,757
112,347
Retained earnings
28,315,319
25,092,043
Accumulated other comprehensive income (loss)
(
1,175,056
)
1,097,956
Total shareholders' equity
49,615,848
47,188,360
Total liabilities and shareholders' equity
$
59,255,245
$
61,921,716
F-
34
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
PARENT
COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years Ended December 31,
2022
2021
2020
OPERATING EXPENSES:
General and administrative
$
(
2,869,077
)
$
(
3,501,857
)
$
(
4,452,154
)
Total operating expenses
(
2,869,077
)
(
3,501,857
)
(
4,452,154
)
LOSS FROM OPERATIONS
(
2,869,077
)
3,501,857
(
4,452,154
)
OTHER INCOME (EXPENSE)
Finance expense
59,758
1,079
(
17,410
)
Other income, net
-
-
-
Share of income of subsidiaries
6,045,005
14,945,051
6,517,671
Total other income, net
6,104,763
14,946,130
6,500,261
NET INCOME
$
3,235,686
$
11,444,273
$
2,048,107
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
(
2,273,012
)
174,841
1,144,657
COMPREHENSIVE INCOME
$
962,674
$
11,619,114
$
3,192,764
F-
35
ORIENTAL
CULTURE HOLDING LTD. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
PARENT
COMPANY STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
2022
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
3,235,686
$
11,444,273
$
2,048,107
Adjustments to reconcile net income to cash used in operating activities:
Equity income of subsidiaries and VIEs
(
6,045,005
)
(
14,945,051
)
(
6,517,671
)
Change in operating assets and liabilities:
Depreciation and amortization
-
-
-
(Decrease) increase in accounts payable
(
70,000
)
(
2,820,000
)
2,960,000
(Decrease) increase in other payables and accrued liabilities
(
23,958
)
(
517,960
)
50,918
(Increase) in other receivable and other current assets
(
833,063
)
-
-
(Increase) in other receivable - intercompany
(
362,514
)
(
2,862,437
)
-
Increase (decrease) in other payables - intercompany
(
5,000,000
)
13,174,933
(
18,993
)
Common stock issue for service
464,814
-
-
Net cash used in operating activities
(
8,634,040
)
3,473,758
(
1,477,639
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of intangible assets
-
-
-
Net cash used in investing activities
-
-
-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of ordinary shares, net
1,000,000.00
2,000,000
18,090,668
Net cash provided by financing activities
1,000,000.00
2,000,000
18,090,668
CHANGES IN CASH AND CASH EQUIVALENTS
(
7,634,040
)
5,473,758
16,613,029
CASH AND CASH EQUIVALENTS, beginning of year
22,086,787
16,613,029
-
CASH AND CASH EQUIVALENTS, end of year
$
14,452,747
$
22,086,787
$
16,613,029
NON-CASH TRANSACTIONS OF FINANCING ACTIVITIES
Business acquisition through issuance of ordinary shares
$
-
$
-
$
-
Proceeds from initial public offerings deposited with escrow
$
-
$
-
$
600,000
Proceeds from initial public offerings offset with intercompany payable
$
-
$
-
$
1,413,458
F-
36