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</div><!-- Field: Rule-Page --><div style="width: 100%"><div style="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><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">&#160;</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>UNITED
STATES</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>SECURITIES
AND EXCHANGE COMMISSION</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>WASHINGTON,
D.C. 20549</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">&#160;<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>FORM
<ix:nonNumeric contextRef="c0" name="dei:DocumentType">20-F</ix:nonNumeric></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">&#160;</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"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentRegistrationStatement">&#9744;</ix:nonNumeric>
<b>REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934</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>OR</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">&#160;</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"><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:DocumentAnnualReport">&#9746;</ix:nonNumeric>
<b>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</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>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></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>OR</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">&#160;</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"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentTransitionReport">&#9744;</ix:nonNumeric>
<b>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</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>OR</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">&#160;</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"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentShellCompanyReport">&#9744;</ix:nonNumeric>
<b>SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</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">Date
of event requiring this shell company report for the transition period from ____________to ____________<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">&#160;</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>Commission
file number: <ix:nonNumeric contextRef="c0" name="dei:EntityFileNumber">001-38851</ix:nonNumeric> </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;&#160;</b></span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>POWERBRIDGE
TECHNOLOGIES CO., LTD.</b></span></ix:nonNumeric></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>(Exact
Name of Registrant as Specified in its Charter)</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">&#160;</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>N/A
</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">(Translation
of Registrant&#8217;s Name into English)</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">&#160;</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cayman
Islands</b></span></ix:nonNumeric></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">(Jurisdiction
of Incorporation or Organization)</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">&#160;</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><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine1">Advanced
Business Park</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine2">9th Fl, Bldg C2</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine3">29 Lanwan Lane</ix:nonNumeric></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>Hightech
District, <ix:nonNumeric contextRef="c0" name="dei:EntityAddressCityOrTown">Zhuhai</ix:nonNumeric>, Guangdong <ix:nonNumeric contextRef="c0" name="dei:EntityAddressPostalZipCode">519080</ix:nonNumeric>, <span style="-sec-ix-hidden: hidden-fact-0">ChinaTel</span>: +86-756-339-5666</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">(Address
of principal executive offices)</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">&#160;</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><ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelName">Stewart
Lor</ix:nonNumeric>, Chief Executive Officer</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><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine1">Advanced
Business Park</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine2">9th Fl, Bldg C2</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine3">29 Lanwan Lane</ix:nonNumeric></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>Hightech
District, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressCityOrTown">Zhuhai</ix:nonNumeric>, Guangdong <ix:nonNumeric contextRef="c1" name="dei:EntityAddressPostalZipCode">519080</ix:nonNumeric>, <span style="-sec-ix-hidden: hidden-fact-1">ChinaTel</span>: <span style="-sec-ix-hidden: hidden-fact-2">+<span style="-sec-ix-hidden: hidden-fact-3">86-756-339-5666</span></span></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">(Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)</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">&#160;</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>Securities
registered or to be registered pursuant to Section 12(b) of the Act:</b></span></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; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 51%; border-bottom: black 1.5pt solid; padding-right: 3pt; padding-left: 3pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Title of Each Class</b></span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-right: 3pt; padding-left: 3pt; 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; width: 48%; border-bottom: black 1.5pt solid; padding-right: 3pt; padding-left: 3pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name of Each Exchange on Which Registered</b></span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 3pt; padding-left: 3pt; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:Security12bTitle"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Ordinary shares, par value $0.00166667</b></span></ix:nonNumeric></td> <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 3pt; padding-left: 3pt; 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-right: 3pt; padding-left: 3pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><ix:nonNumeric contextRef="c0" name="dei:SecurityExchangeName">NASDAQ</ix:nonNumeric> Capital Market</b></span></td></tr> </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: 10pt">&#160;</span></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; font-size: 10pt"><b>Securities
registered or to be registered pursuant to Section 12(g) of the Act:</b></span></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; font-size: 10pt">&#160;</span></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; font-size: 10pt"><b>None</b></span></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; font-size: 10pt"><b>(Title
of Class)</b></span></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; font-size: 10pt">&#160;&#160;</span></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; font-size: 10pt"><b>Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:</b></span></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; font-size: 10pt">&#160;</span></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; font-size: 10pt"><b>None</b></span></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; font-size: 10pt"><b>(Title
of Class)</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: center"></p><div>

</div><!-- Field: Page; Sequence: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 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; text-align: center"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
the number of outstanding shares of each of the issuer&#8217;s classes of capital or common shares as of the close of the period covered
by the annual report:</span></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">&#160;</span></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">As
of December 31, 2022, the issuer had <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">285,005,647</ix:nonFraction> shares outstanding.</span></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">&#160;</span></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">Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes &#9744; <ix:nonNumeric contextRef="c0" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric> &#9746;</span></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">&#160;</span></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">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 &#9744; <ix:nonNumeric contextRef="c0" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric> &#9746;</span></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">&#160;</span></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">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;&#9746;&#160;No&#160;&#9744;</span></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">&#160;</span></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">Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files). <ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric> &#9746; No &#9744;</span></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">&#160;</span></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">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; accelerated filer,&#8221; and &#8220;emerging growth company&#8221;
in Rule 12b-2 of the Exchange Act.</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 20%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large accelerated filer </span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 45%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 30%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated filer</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated filer</span></ix:nonNumeric></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging growth company </span></td> <td style="font: 10pt Times New Roman, Times, Serif"><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:EntityEmergingGrowthCompany"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></ix:nonNumeric></td></tr> </table><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">&#160;</span></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">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. <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityExTransitionPeriod">&#9744;</ix:nonNumeric></span></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">&#160;</span></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">&#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 5, 2012.</span></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">&#160;</span></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">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. &#9744;</span></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">&#160;</span></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">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. &#9744;</span></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">&#160;</span></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">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). &#9744;</span></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">&#160;</span></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">Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; white-space: nowrap; vertical-align: top; width: 10%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="-sec-ix-hidden: hidden-fact-4">U.S. GAAP</span> &#9746;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; 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; vertical-align: top; width: 83%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">International Financial Reporting Standards as issued by the International Accounting Standards Board &#9744;</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; white-space: nowrap; vertical-align: top; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other &#9744;</span></td></tr> </table><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">&#160;</span></p><div>

</div><p style="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">* 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 &#9744; Item 18 &#9744;</span></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">&#160;</span></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">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 &#9744; No <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityShellCompany">&#9746;</ix:nonNumeric></span></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">&#160;</span></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">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. Yes &#9744; No <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:IcfrAuditorAttestationFlag">&#9746;</ix:nonNumeric>&#160;</span></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; font-size: 10pt">&#160;</span></p><div>

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</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: 10pt">&#160;</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INTRODUCTION</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_002">PART I</a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 10%"><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: 79%"><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; vertical-align: bottom; width: 10%; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 1.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 2.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OFFER STATISTICS AND EXPECTED TIMETABLE</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 3.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">KEY INFORMATION</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 4.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INFORMATION ON THE COMPANY</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 4A.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">UNRESOLVED STAFF COMMENTS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">69</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 5.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_008"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OPERATING AND FINANCIAL REVIEW AND PROSPECTS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">70</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 6.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_009"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">88</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 7.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_010"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">98</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 8.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_011"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL INFORMATION</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">102</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 9.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_012"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE OFFER AND LISTING</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">102</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 10.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_013"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ADDITIONAL INFORMATION</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">103</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 11.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_014"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">116</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 12.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_015"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">116</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a_016"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART II</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 13.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_017"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 14.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_018"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 15.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_019"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONTROLS AND PROCEDURES</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">117</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">ITEM 16</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_020">RESERVED</a></td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">119</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16A.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_021"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AUDIT COMMITTEE FINANCIAL EXPERT</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">119</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16B.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_022"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CODE OF ETHICS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">119</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16C.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_023"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRINCIPAL ACCOUNTANT FEES AND SERVICES</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">119</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16D.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_024"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">120</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16E.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_025"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">120</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16F.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_026"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CHANGE IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">120</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16G.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_027"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CORPORATE GOVERNANCE</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">120</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16H.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_028">MINE SAFETY DISCLOSURE</a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">120</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="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; vertical-align: bottom"><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; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16I.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_029"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS </span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">120</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_030">PART III</a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">121</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 17.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_031"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL STATEMENTS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">121</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 18.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_032"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL STATEMENTS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">121</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <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 style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><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; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 19.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#a_033"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXHIBITS</span></a></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; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">121</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#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: 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INTRODUCTION
</b></span></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; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
otherwise indicated, numerical figures included in this Annual Report on Form 20-F (the &#8220;<b>Annual Report</b>&#8221;) have been
subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations
of the figures that precede them.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the sake of clarity, this Annual Report follows the English naming convention of first name followed by last name, regardless of whether
an individual&#8217;s name is Chinese or English. Numerical figures included in this Annual Report have been subject to rounding adjustments.
Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.
Certain market data and other statistical information contained in this Annual Report are based on information from independent industry
organizations, publications, surveys and forecasts. Some market data and statistical information contained in this Annual Report are
also based on management&#8217;s estimates and calculations, which are derived from our review and interpretation of the independent
sources listed above, our internal research and our knowledge of the PRC information technology industry. While we believe such information
is reliable, we have not independently verified any third-party information and our internal data has not been verified by any independent
source.</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All references to &#8220;RMB,&#8221;
    &#8220;yuan&#8221; and &#8220;Renminbi&#8221; are to the legal currency of China, all references to &#8220;HKD&#8221; is to the legal
    currency of Hong Kong, and all references to &#8220;USD&#8221; and &#8220;U.S. dollars&#8221; are to the legal currency of the United
    States.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;AIC&#8221; refers
    to Administration for Industry and Commerce in China.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depending on the context,
    the terms &#8220;we&#8221;, &#8220;us&#8221;, &#8220;our company&#8221;, &#8220;our&#8221;, &#8220;Powerbridge&#8221; and &#8220;Powerbridge
    Cayman&#8221; refer to Powerbridge Technologies Co., Ltd., a Cayman Islands company, its subsidiaries and affiliated companies.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Controlling Shareholders&#8221;
    refers to Stewart Lor.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depending on the context,
    the terms &#8220;we&#8221;, &#8220;us&#8221;, &#8220;our company&#8221;, &#8220;our&#8221;, &#8220;Powerbridge&#8221; and &#8220;Powerbridge
    Cayman&#8221; refer to Powerbridge Technologies Co., Ltd., a Cayman Islands company, its subsidiaries and affiliated companies.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Exchange Act&#8221;
    refers to the U.S. Securities Exchange Act of 1934, as amended.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Fiscal Year&#8221;
    refers to the period from January 31 of each calendar year to December 31 of the following calendar year.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Hongding Hong Kong&#8221;
    refers to Hongding Technology Co., Ltd., a Hong Kong company.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Hongding Shenzhen&#8221;
    refers to Shenzhen Hongding Interconnect Technology Co., Ltd., a PRC company.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;IPO&#8221; means
    the initial public offering by the Company of 2,012,500 Ordinary Shares consummated on April 4, 2019 (including the full exercise
    of the over-allotment option by the underwriters to purchase an additional 262,500 Ordinary Shares on May 10, 2019).</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;IP&#8221; refers
    to intellectual property.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Powerbridge HK&#8221;
    refers to Powerbridge Holdings Limited, a Hong Kong company.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Powerbridge Zhuhai&#8221;
    refers to Powerbridge Technology Group Co., Ltd., a PRC company.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;PRC&#8221; and &#8220;China&#8221;
    refer to the People&#8217;s Republic of China, excluding, for the purposes of this Annual Report only, Macau, Taiwan and Hong Kong.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Registration Statement&#8221;
    refers to the Company&#8217;s Registration Statement on Form F-1 (File No. 333-229128) for the sale of up to 1,750,000 Ordinary Shares
    initially filed on January 4, 2019, and subsequently amended thereafter, which became effective on March 28, 2019.</span></td></tr>
  </table><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"></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;R&amp;D&#8221; refers
    to research and development.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Securities Exchange
    Commission&#8221;, &#8220;SEC&#8221;, &#8220;Commission&#8221; or similar terms refer to the Securities Exchange Commission</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Sarbanes-Oxley Act&#8221;
    refers to the Sarbanes-Oxley Act of 2002.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Securities Act&#8221;
    refers to the Securities Act of 1933.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Shares&#8221; or
    &#8220;Ordinary Share&#8221; refers to our Ordinary Shares, par value $0.00166667 per share.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;United States&#8221;,
    &#8220;U.S.&#8221; and &#8220;US&#8221; refer to the United States of America.</span></td></tr>
  </table><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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Discrepancies
in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
annual report on Form 20-F includes our audited consolidated financial statements for the years ended December 31, 2022, 2021 and 2020.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
otherwise noted, all currency figures in this filing are in U.S. dollars. Any discrepancies in any table between the amounts identified
as total amounts and the sum of the amounts listed therein are due to rounding. Our reporting currency is U.S. dollar and our functional
currency is Renminbi. This Annual Report contains translations of certain foreign currency amounts into U.S. dollars for the convenience
of the reader. Other than in accordance with relevant accounting rules and as otherwise stated, all translations of Renminbi into U.S.
dollars in this Annual Report were made at the rate of RMB6.8972 to USD1.00, the noon buying rate on December 31, 2022, as set forth
in the H.10 statistical release of the U.S. Federal Reserve Board. Where we make period-on-period comparisons of operational metrics,
such calculations are based on the Renminbi amount and not the translated U.S. dollar equivalent. We make no representation that the
Renminbi or U.S. dollar amounts referred to in this Annual Report could have been or could be converted into U.S. dollars or Renminbi,
as the case may be, at any particular rate or at all.</span></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">&#160;</span></p><div>

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

</div><!-- Field: Page; Sequence: 5; 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 -->iii<!-- 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><div><a id="a_002"></a></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: 10pt"><b>Part
I</b></span></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; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_003"></a></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>Item
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
Applicable.</span></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">&#160;</span></p><div>

</div><div><a id="a_004"></a></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>Item
2. OFFER STATISTICS AND EXPECTED TIMETABLE</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
Applicable.</span></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">&#160;</span></p><div>

</div><div><a id="a_005"></a></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>Item
3. KEY INFORMATION</b></span></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">&#160;</span></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">A.
[Reserved]</span></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">&#160;</span></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.
<span style="text-decoration:underline">Capitalization and Indebtedness</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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">&#160;</span></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">C.
<span style="text-decoration:underline">Reasons for the Offer and Use of Proceeds</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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; font-size: 10pt">&#160;</span></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">D.
<span style="text-decoration:underline">Risk Factors</span></span></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; font-size: 10pt">&#160;</span></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; font-size: 10pt">Summary
of the Risk Factors</span></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; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>You
should carefully consider the following risk factors, together with all of the other information included in this Annual Report. Investment
in our securities involves a high degree of risk. You should carefully consider the risks described below together with all of the other
information included in this Annual Report before making an investment decision. The risks and uncertainties described below represent
our known material risks to our business. If any of the following risks actually occurs, our business, financial condition or results
of operations could suffer. In that case, you may lose all or part of your investment.</i></span></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"><i>&#160;</i></span></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; font-size: 10pt"><i>Risks
Related to Our Business and Industry</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks
and uncertainties related to our business and industry include, but are not limited to, the following:</span></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"><b><i>&#160;</i></b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company&#8217;s business
    operations could be adversely affected by the continued outbreak of&#160;COVID-19.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Economic uncertainties
    or downturns could materially adversely affect our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The growth and success
    of our business depends on our ability to develop new services and enhance existing services in order to keep pace with rapid changes
    in technology.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If we do not succeed in
    attracting new customers for our services and growing revenues from existing customers, we may not achieve our revenue growth goals.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may be unable to effectively
    manage our expansion for the anticipated growth, which could place significant strain on our management personnel, systems and resources.
    We may not be able to achieve anticipated growth, which could materially and adversely affect our business and prospects.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We face risks associated
    with having an extended selling and implementation cycle for our services that require us to make significant resource commitments
    prior to realizing revenues for those services.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adverse changes in the
    economic environment, either in China or globally, could reduce our customers&#8217; purchases from us and increase pricing pressure,
    which could materially and adversely affect our revenues and results of operations.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We generate a significant
    portion of our revenues from a relatively small number of major customers and loss of business from these customers could reduce
    our revenues and significantly harm our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may be forced to reduce
    the prices of our services due to increased competition and reduced bargaining power with our customers, which could lead to reduced
    revenues and profitability.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A portion of our income
    is generated, and will in the future continue to be generated, on a project basis with a fixed price; we may not be able to accurately
    estimate costs and determine resource requirements in relation to our projects, which would reduce our margins and profitability.</span></td></tr>
  </table><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>

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

</div><!-- Field: Page; Sequence: 6; 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: Arabic; Name: PageNo -->1<!-- 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"><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 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Risks
Related to Our Corporate Structure</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 35.45pt"><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 0; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks
and uncertainties related to our corporate structure include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: -17.25pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We are a Cayman Islands
    company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under
    U.S. law, shareholders may have less protection for their shareholder rights than they would under U.S. law.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: -17.25pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Judgments obtained against us by our shareholders may
    not be enforceable.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: -17.25pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may lose our foreign
    private issuer status in the future, which could result in significant additional costs and expenses.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: -17.25pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our disclosure controls and procedures may not prevent
    or detect all errors or acts of fraud.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: -17.25pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></td></tr>
  </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: 10pt"><i>&#160;</i></span></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; font-size: 10pt"><i>Risks
Related to Our Ordinary Shares</i></span></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; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks
and uncertainties related to our Shares include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our Shares may be delisted
    from the Nasdaq Capital Market as a result of our failure of meeting the Nasdaq Capital Market continued listing requirements.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our issuance of new shares
    and convertible note had a dilutive effect on our existing shareholders and may adversely impact the market price of our Ordinary
    Shares.</span></td></tr>
  </table><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">&#160;</span></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; font-size: 10pt"><i>Risks
Related to Doing Business in China</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 35.45pt"><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 0; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks
and uncertainties related to conducting business in China include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -18.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Chinese government
    exerts substantial influence over the manner in which we must conduct our business activities.&#160;We are currently not required
    to obtain approval from Chinese authorities to issue securities to foreign investors, however, if our subsidiaries or the holding
    company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges,
    we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adverse changes in political,
    economic and other policies of the Chinese government could have a material adverse effect on the overall economic growth of China,
    which could materially and adversely affect the growth of our business and our competitive position.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Uncertainties with respect
    to the PRC legal system could have a material adverse effect on us.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may be adversely affected
    by the complexity and uncertainties of and changes in PRC regulation of Internet business and related companies.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S. regulators&#8217;
    ability to conduct investigations or enforce rules in China is limited.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We face uncertainty regarding
    the PRC tax reporting obligations and consequences for certain indirect transfers of the stock of our operating company.</span></td></tr>
  </table><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>

</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 -->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: 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 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Business and Industry</b></span></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"><b><i>&#160;</i></b></span></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"><b><i>The
Company&#8217;s business operations could be adversely affected by the continued outbreak of&#160;COVID-19. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s business operations could continue to be adversely affected by the recent outbreak of respiratory illness caused by a
novel coronavirus&#160;known as&#160;COVID-19&#160;which was first reported in the City of Wuhan, Hubei, China. The Company&#8217;s corporate
headquarter is located in Zhuhai, China with operation offices located in Wuhan, Changsha, Nanning and Hangzhou, where any outbreak of
contagious diseases and other adverse public health developments could be materially adverse on the Company&#8217;s business operations.
In response to the highly contagious and sometimes fatal&#160;coronavirus&#160;inflicting thousands of people in China, the local government
imposed travel restrictions and quarantines order to help control the spread of&#160;COVID-19 in February 2020. During 2021, the situation
in China appeared to be on a path of slow recovery from the impact and compared with 2020, the adverse impact of COVID-19 on our operations
was alleviated. During the first quarter of 2020, our operations were closed in February due to China government mandates and we moved
quickly to transition our colleague base to a fully remote working environment in all our locations. The ongoing COVID-19 pandemic not
only adversely impacted our operations but business of our customers. We experienced delayed customer payments and rescheduled customer
orders, which adversely impacts the Company&#8217;s results of operations, cash flows and financial position. During 2022, our business
continued to be adversely impacted by the COVID-19 pandemic. Specifically, a new COVID-19 subvariant (Omicron) outbreak hit China in
March 2022, spreading more quickly and easily than previous strains. As a result, a new round of lockdowns, quarantines, or travel restrictions
were imposed upon different provinces or cities in China by the relevant local government authorities. &#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company primarily engages in providing software application and technology solutions and services to corporate and government customers
primarily located in China. Our customers are corporate and government organizations engaged in global trade, including import and export
companies, manufacturers and logistics providers engaged in international trade, as well as customs, ports, terminals, and other government
agencies that oversee the flow of goods and services across borders. The global outbreak of COVID-19 has significantly and adversely
impacted our business operations. During 2021 and 2022, restrictions on movement within China still took place as there were still intermittent
regional outbreaks of COVID-19. Given that the COVID-19 had been developed into a higher level of infectivity and lower level of lethality,
the intermittent outbreaks of COVID-19 in the surrounding areas still posed negative effect on our business activities and forced us
to postpone intercity in-person business meetings. We might fail to stick with the original timelines of certain on-premise projects.
We also experienced a slowdown in our regular business activities, as a result of remote working requirements and travel restrictions.
Our business in 2023 will be dependent on future developments such as new information on the effectiveness of the mitigation strategies,
the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the related travel advisories and restrictions,
the overall impact of the COVID-19 pandemic on the global economy and capital markets, and the efficacy of COVID-19 vaccines, which may
also take extended time to be widely and adequately distributed, all of which remain highly uncertain and unpredictable. Any potential
impact to the Company&#8217;s results will depend on, to a large extent, future developments and new information that may emerge regarding
the duration and severity of the COVID-19 and the actions taken by governmental authorities and other entities to contain the COVID-19
or treat its impact, almost all of which are beyond the Company&#8217;s control. Given this uncertainty, we are currently neither able
to affirm whether there will be positive or negative effect on our business under the changes in policies nor quantify the expected impact
of the COVID-19 pandemic on our future operations, financial condition, liquidity, and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Economic
uncertainties or downturns could materially adversely affect our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
or future economic uncertainties or downturns, including those caused by the ongoing&#160;COVID-19&#160;outbreak (as discussed above),
could adversely affect our business and operating results. Negative conditions in the general economy both in the China and abroad, including
conditions resulting from changes in gross domestic product growth, the continued sovereign debt crisis, financial and credit market
fluctuations, political deadlock, natural catastrophes, pandemics, warfare and terrorist attacks on the United States, Europe, the Asia
Pacific region or elsewhere, could cause a decrease in business investments, including corporate spending on business intelligence software
in general and negatively affect the rate of growth of our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">General
worldwide economic conditions may experience significant downturns and may be unstable. These conditions make it extremely difficult
for our customers and us to forecast and plan future business activities accurately, and they could cause customers to re-evaluate their
decisions to subscribe to our platform, which could delay and lengthen our sales cycles or result in cancellations of planned purchases.
Furthermore, during challenging economic times customers may tighten their budgets and face issues in gaining timely access to sufficient
credit, which could result in an impairment of their ability to make timely payments to us. In turn, we may be required to increase our
allowance for doubtful accounts, which would adversely affect our financial results.</span></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"></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; text-indent: 0.25in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
example, the rapid spread of&#160;coronavirus&#160;globally in 2020 and 2021 has resulted in travel restrictions and in some cases, prohibitions
of non-essential travel, disruption and shutdown of businesses and greater uncertainty in global financial markets. Health concerns or
political or governmental developments in countries in which we or our customers, partners and service providers operate could result
in economic, social or labor instability, slow our sales process, result in customers not purchasing or renewing our products or failing
to make payments, and could otherwise have a material adverse effect on our business and our results of operations and financial condition.
The extent to which the&#160;coronavirus&#160;impacts our results will depend on future developments, which are highly uncertain and
will include emerging information concerning the severity of the&#160;coronavirus&#160;and the actions taken by governments and private
businesses to attempt to contain the&#160;coronavirus. Any prolonged contractions in the industries in which our customers or partners
operate could materially and adversely impact our business, results of operations and financial condition.</span></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; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the extent subscriptions to our system solutions are perceived by customers and potential customers to be discretionary, our revenue
may be disproportionately affected by delays or reductions in general information technology spending. Moreover, competitors may respond
to market conditions by lowering prices and attempting to lure away our customers. In addition, the increased pace of consolidation in
certain industries may result in reduced overall spending on our system solutions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within any particular
industry. If the economic conditions of the general economy or industries in which we operate do not improve, or worsen from present
levels, our business, operating results, financial condition and cash flows could be adversely affected.</span></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"><b><i>&#160;</i></b></span></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"><b><i>The
growth and success of our business depends on our ability to develop new services and enhance existing services in order to keep pace
with rapid changes in technology. </i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market for our services is characterized by rapid technological changes, evolving industry standards, changing customer preferences and
new product and service introductions. Our future growth and success depend significantly on our ability to anticipate developments in
technologies, and develop and offer new services to meet our customers&#8217; evolving needs. We may not be successful in anticipating
or responding to these developments in a timely manner, or if we do respond, the services or technologies we develop may not be successful
in the marketplace. The development of some of the services and technologies may involve significant upfront investments and the failure
of these services and technologies may result in our being unable to recover these investments, in part or in full. Further, services
or technologies that are developed by our competitors may render our services uncompetitive or obsolete. In addition, new technologies
may be developed that allow our customers to more cost-effectively perform the services that we provide, thereby reducing demand for
our services. Should we fail to adapt to the rapidly changing technologies or if we fail to develop suitable services to meet the evolving
and increasingly sophisticated requirements of our customers in a timely manner, our business and results of operations could be materially
and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
our future growth and success could be adversely affected by conditions of potential business partners, which may cause delay or failure
in development of the services or technologies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>If
we do not succeed in attracting new customers for our services and growing revenues from existing customers, we may not achieve our revenue
growth goals.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
plan to significantly expand the number of customers we serve to diversify our customer base and grow our revenues. Obtaining new customers
is important for us to achieve rapid revenue growth. We also plan to grow revenues from our existing customers by identifying and selling
additional services to them. Our ability to attract new customers, as well as our ability to grow revenues from existing customers, depends
on a number of factors, including our ability to offer high quality services at competitive prices, the strength of our competitors and
the capabilities of our sales and marketing teams. If we are not able to continue to attract new customers or to grow revenues from our
existing customers, we may not be able to grow our revenues as quickly as we anticipate or at all.</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"></p><div>

</div><!-- Field: Page; Sequence: 9; 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 -->4<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>We
may be unable to effectively manage our expansion for the anticipated growth, which could place significant strain on our management
personnel, systems and resources. We may not be able to achieve anticipated growth, which could materially and adversely affect our business
and prospects.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
number of our total employees decreased from 210 in December 2021 to 187 in December 2022. As of the date of this Annual Report, we have
177 full-time employees. We have four branches, of which are located in China (Changsha, Wuhan, Nanning, Hangzhou) and maintain offices
in Changsha, Wuhan, Nanning and Hangzhou to serve different customers in various geographic locations. In order to pursue existing and
potential market opportunities, we plan to expand our business including (i) establishing new offices and expanding our current offices
in China; (ii) exploring and expanding into international markets; and (iii) upgrading our existing services and introducing new services.
We are facing the following challenges with respect to our planned expansion:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recruiting, training, developing
    and retaining sufficient industry and technology talents and management personnel;</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">creating and capitalizing
    upon economies of scale;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">managing a larger number
    of customers in a greater number of locations;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">maintaining effective oversight
    of personnel and offices;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">coordinating work among
    offices and project teams and maintaining high resource utilization rates;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">integrating new personnel
    and expanded operations while preserving our culture and core values;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">developing and improving
    our internal administrative infrastructure, particularly our financial, operational, human resources, communications and other internal
    systems, procedures and controls; and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">adhering to and further
    improving our service quality and process execution standards and maintaining high levels of customer satisfaction.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
as we introduce new services or enter into new markets, we may face new market, technological and operational risks and challenges with
which we are unfamiliar, and it may require substantial management efforts and skills to mitigate these risks and challenges. As a result
of any of these problems associated with expansion, our business, results of operations and financial condition could be materially and
adversely affected. Furthermore, we may not be able to achieve anticipated growth, which could materially and adversely affect our business
and prospects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></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"><b><i>We
face risks associated with having an extended selling and implementation cycle for our services that require us to make significant resource
commitments prior to realizing revenues for those services.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 26.4pt"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have an extended selling cycle for certain of our software applications and technology services, which requires significant investment
of capital, human resources and time by both our customers and us. Before committing to use our services, potential customers require
us to expend substantial time and resources educating them on the value of our services and our ability to meet their requirements. Therefore,
our selling cycle is subject to many risks and delays over which we have little or no control, including our customers&#8217; decisions
to choose alternatives to our services (such as other providers or in-house resources) and the timing of our customers&#8217; budget
cycles and approval processes. Implementing our services, particularly for our application development services also involves a significant
commitment of resources over an extended period of time ranging from three months to three years from both our customers and us. The
ongoing COVID-19 pandemic has resulted in a reduction in economic activity by adversely affecting the Company&#8217;s selling cycle.
As a result, we may have a longer selling cycle and delay in business meetings, which could materially and adversely affect our business
and our financials. Our customers may experience delays in obtaining internal approvals or delays associated with our services, thereby
further delaying the implementation process. Our current and future customers may not be willing or able to invest the time and resources
necessary to implement our services, and we may fail to close sales with potential customers to which we have devoted significant time
and resources, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>Adverse
changes in the economic environment, either in China or globally, could reduce our customers&#8217; purchases from us and increase pricing
pressure, which could materially and adversely affect our revenues and results of operations.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
software application and technology service industry are particularly sensitive to the economic environment, both in China and globally,
and tend to decline during general economic downturns. Accordingly, our results of operations, financial condition and prospects are
subject to a significant degree to the economic environment, especially for regions in which we and our customers operate. During an
economic downturn, our customers may cancel, reduce or defer their technology spending or change their technology strategy, and reduce
their purchases from us. The recent global economic slowdown, any future economic slowdown, and the resulting diminution in technology
spending, could also lead to increased pricing pressure from our customers. The trade war between the U.S. and China which may lead to
higher percentage of tariff to be placed on Chinese and American goods and services could also lead to a reduction of import and export
volume for some of our customers resulting in reduced purchases of our services from these customers. The occurrence of any of these
events could materially and adversely affect our revenues and results of operations.</span></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; font-size: 10pt">&#160;&#160;</span></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"><b><i>We
generate a significant portion of our revenues from a relatively small number of major customers and loss of business from these customers
could reduce our revenues and significantly harm our business.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that in the foreseeable future we will continue to derive a significant portion of our revenues from a small number of major
customers. For the year ended December 31, 2022, one customer accounted for 31.8% of the Company&#8217;s total revenues. For the year
ended December 31, 2021, one customer accounted for 12.8% of the Company&#8217;s total revenues. For the year ended December 31, 2020,
one customer accounted for 25.7% of the Company&#8217;s total revenues.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to maintain close relationships with major customers is essential to the growth and profitability of our business. However, the
volume of work performed for a specific customer is likely to vary from year to year, especially since we are generally not our customers&#8217;
exclusive technology services provider and we do not have long-term commitments with any of our customer to purchase our services. A
major customer in one year may not provide the same level of revenues for us in any subsequent year. The services that we provide to
our customers, and the revenues and income from those services, may decline or vary as the type and quantity of services we provide changes
over time. In addition, our reliance on any individual customer for a significant portion of our revenues may give that customer a certain
degree of pricing leverage against us when negotiating contracts and terms of service. In addition, a number of factors other than our
performance could cause the loss of or reduction in business or revenues from a customer, and these factors are not predictable. These
factors may include organization restructuring, pricing pressure, changes to its technology strategy, switching to another services provider
or returning work in-house. The loss of any of our major customers could adversely affect our financial condition and results of operations.</span></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"><b><i>&#160;</i></b></span></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"><b><i>We
may be forced to reduce the prices of our services due to increased competition and reduced bargaining power with our customers, which
could lead to reduced revenues and profitability.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
software application and technology service industry in China is developing rapidly and related technology trends are constantly evolving.
This results in the frequent introduction of new services and significant price competition from our competitors. We may be unable to
offset the effect of declining average sales prices through increased sales volumes and/or reductions in our costs. Furthermore, we may
be forced to reduce the prices of our services in response to offerings made by our competitors. Finally, we may not have the same level
of bargaining power we have enjoyed in the past when it comes to negotiating for the prices of our services, all of which could lead
to reduced revenues and profitability.</span></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">&#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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>A
portion of our income is generated, and will in the future continue to be generated, on a project basis with a fixed price; we may not
be able to accurately estimate costs and determine resource requirements in relation to our projects, which would reduce our margins
and profitability.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
portion of our income is generated, and will continue to be generated, from fees we receive for our projects at a fixed price. Our projects
often involve complex technologies, utilizing workforces with different skill sets and competencies, and must be completed within compressed
timeframes and meet customer requirements that are subject to changes and increasingly stringent. In addition, some of our fixed-price
projects are multi-year projects that require us to undertake significant projections and planning related to resource utilization and
costs. If we fail to accurately assess the time and resources required for completing projects and to price our projects profitably,
our business, results of operations and financial condition could be adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
revenues and results of operations are affected by seasonal trends.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business is affected by seasonal trends. In particular, our revenues are typically progressively higher in the second, third and fourth
quarters of each year compared to the first quarter of each year due to seasonal trends, such as: (i) a general slowdown in business
activities and a reduced number of working days during the first quarter of each year as a result of the Chinese New Year holiday period;
and (ii) our customers in general tend to spend their technology and software budgets in the second half of the year and in particular
the fourth quarter. Other factors that may cause our quarterly operating results to fluctuate include, among others, changes in general
economic conditions in China and the impact of unforeseen events. We believe that our revenues will continue to be affected in the future
by seasonal trends. As a result, you may not be able to rely on period-to-period comparisons of our operating results as an indication
of our future performance, and we believe it is more meaningful to evaluate our business on an annual basis.</span></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; font-size: 10pt">&#160;&#160;</span></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"><b><i>If
we are unable to collect our receivables from our existing customers, our results of operations and cash flows could be adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business depends on our ability to successfully obtain payment from our customers of the amounts they owe us for our services. As of
December 31, 2022 and 2021, our accounts receivable balance, net of allowance, amounted to approximately $14.8 million and $24.2 million,
respectively. As of December 31, 2022 and 2021, no customer accounted for more than 10% of our accounts receivable. The significant outstanding
accounts receivable balance was mainly related to certain projects for our government customers such as government agencies, authorities
and state-owned enterprises. Due to multiple levels of the government approval process for payments, it could take extra time for us
to collect the full proceeds from our government customers. The COVID-19 pandemic created significant economic uncertainties and volatility
in the credit and capital markets since December 2019. Many customers have delayed their payments to our Company, which caused the significant
increase in the Company&#8217;s aged accounts receivable balance over one year and slow collection progress in 2022 and 2021. In addition,
since we generally do not require collateral or other security from our customers, we establish an allowance for doubtful accounts based
upon estimates, historical experiences and other factors surrounding the credit risk of specific customers. However, actual losses on
customer receivables balance could differ from those that we anticipate and as a result we might need to adjust our allowance. There
is no guarantee that we will accurately assess the creditworthiness of our customers. Macroeconomic conditions, including related turmoil
in the global financial system, could also result in financial difficulties for our customers, including limited access to the credit
markets, insolvency or bankruptcy, and as a result could cause customers to delay payments to us, request modifications to their payment
arrangements that could increase our receivables balance, or default on their payment obligations to us. As a result, an extended delay
or default in payment relating to a significant account will have a material and adverse effect on the aging schedule and turnover days
of our accounts receivable. If we are unable to collect our receivables from our customers in accordance with the contracts with our
customers, our results of operations and cash flows could be adversely affected.</span></p><div>




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</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><i>&#160;</i></b></span></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"><b><i>We
face a number of risks in our strategy to target larger organizations for sales of our services, and if we do not manage these efforts
effectively, our business and results of operations could be adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
portion of our sales and marketing efforts is focusing on larger corporate and government organizations. As a result, we face a number
of risks with respect to this strategy. For example, we expect to incur higher costs and longer sales cycles for larger organizations,
and we may be less effective at predicting when will we complete these sales. In our industry, the decision to invest in our services
may require a great number of product evaluations and multiple approvals within a potential customer&#8217;s organization, which&#160;may
require us to invest more time educating these potential customers. In addition, larger organizations may demand more features and professional
services. As a result, these sales opportunities would likely lengthen our typical sales cycle and may require us to devote greater research
and development, sales, support, and professional services resources to individual customers. This could strain our resources and result
in increased costs. Moreover, larger customers may demand discounts in pricing, which could lower the amount of revenue we generate from
any particular services that we offer. If an expected transaction is delayed until a subsequent period, or if we are unable to close
one or more expected significant transactions with larger customers or potential new customers in a particular period, our results of
operations for that period, and for any future periods in which revenue from such transaction would otherwise have been recognized, may
be adversely affected. Our investments in marketing and selling to large organizations may not be successful, which could harm our results
of operations and our overall ability to grow our customer base.</span></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"><b><i>&#160;&#160;</i></b></span></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"><b><i>Our
business depends, in part, on services to the public sector, and significant changes in the contracting or fiscal policies of the public
sector could have an adverse effect on our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
derive a large portion of our revenue from our services to government organizations, and we believe that the success and growth of our
business will continue to depend in part on our successful procurement of government contracts. Factors that could impede our ability
to maintain or increase the amount of revenue derived from government contracts, include:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes in fiscal or contracting
    policies;</span></td></tr>
  </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: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">decreases in available
    government funding;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes in government programs
    or applicable requirements;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the adoption of new laws
    or regulations or changes to existing laws or regulations;&#160;and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">potential delays or changes
    in the government appropriations or other funding authorization processes.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
occurrence of any of the foregoing could cause governmental organizations to delay or refrain from purchasing our services in the future
or otherwise have an adverse effect on our business, results of operations and financial condition.</span></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">&#160;</span></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"><b><i>Any
failure to offer high-quality customer support may adversely affect our relationships with our customers.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to retain existing customers and attract new customers depends on our ability to maintain a consistently high level of customer
service and technical support. Our customers depend on our service support team to assist them in utilizing our services effectively
and to help them to resolve issues quickly and to provide ongoing support. If we are unable to hire and train sufficient support resources&#160;or
are otherwise unsuccessful in assisting our customers effectively, it could adversely affect our ability to retain existing customers
and could prevent prospective customers from adopting to our services. We may be unable to respond quickly enough to accommodate short-term
increases in demand for customer support. We also may be unable to modify the nature, scope and delivery of our customer support to compete
with changes in the support services provided by our competitors. Increased demand for customer support, without corresponding revenue,
could increase our costs and adversely affect our business, results of operations and financial condition. Our sales are highly dependent
on our business reputation and on positive recommendations from customers. Any failure to maintain high-quality customer support, or
a market perception that we do not maintain high-quality customer support, could adversely affect our reputation, business, results of
operations and financial condition.</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"></p><div>

</div><!-- Field: Page; Sequence: 13; 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 -->8<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>Incorrect
or improper implementation or use of our services could result in customer dissatisfaction and negatively affect our business, results
of operations, financial condition, and growth prospects.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are deployed in a wide variety of increasingly complex technology environments, including on premises, in the cloud or in hybrid
environments. We believe our future success will depend on our ability to increase sales of our services for use in such deployments.
We must often assist our customers in achieving successful implementations of our services, which we do through our professional consulting
and technical support services. If our customers are unable to implement our services successfully, or unable to do so in a timely manner,
customer perceptions of our services may be harmed, our reputation and brand may suffer, and customers may choose to cease usage of our
services or not to expand their use of our services. Our customers may need trainings in the proper use of and the variety of benefits
that can be derived from our services to maximize their benefits. If our services are not effectively implemented or used correctly or
as intended, or if we fail to adequately train customers on how to efficiently and effectively use our services, our customers may not
be able to achieve satisfactory outcomes. This could result in negative publicity and legal claims against us, which may cause us to
generate fewer sales to new customers and reductions in renewals or expansions of the use of our services with existing customers, any
of which would harm our business and results of operations.</span></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">&#160;</span></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"><b><i>Failure
to adhere to regulations that govern our customers&#8217; businesses could result in breaches of contracts with our customers. Failure
to adhere to the regulations that govern our business could result in we being unable to effectively perform our services.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
customers&#8217; business operations are subject to certain rules and regulations in China or elsewhere. Our customers may contractually
require that we perform our services in a manner that would enable them to comply with such rules and regulations. Failure to perform
our services in such manner could result in breaches of contract with our customers and, in some limited circumstances, civil fines and
criminal penalties for us. In addition, we are required under various Chinese laws to obtain and maintain permits and licenses to conduct
our business. If we do not maintain our licenses or other qualifications to provide our services, we may not be able to provide services
to existing customers or be able to attract new customers and could lose revenues, which could have a material adverse effect on our
business and results of operations.</span></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">&#160;<b><i>&#160;</i></b></span></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"><b><i>If
our new enhancements to our services do not achieve sufficient market acceptance, our financial results and competitive position will
suffer.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
spend substantial amounts of time and money to research and develop new enhancements of our services to incorporate additional features,
improve functionality or other enhancements in order to meet our customers&#8217; rapidly evolving demands. When we develop an enhancement
to our services, we typically incur expenses and expend resources upfront to develop, market and promote the new enhancements. Therefore,
when we develop and introduce new enhancements to our services, they must achieve high levels of market acceptance in order to justify
the amount of our investment in developing and bringing them to market. If our new enhancements to our services do not garner widespread
market adoption and implementation, our growth prospects, future financial results and competitive position could suffer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we cause disruptions to our customers&#8217; businesses or provide inadequate service, our customers may have claims for substantial
damages against us, and as a result our profits may be substantially reduced.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we make errors in the course of delivering services to our customers or fail to consistently meet service requirements of a customer,
these errors or failures could disrupt the customer&#8217;s business, which could result in a reduction in our net revenues or a claim
for substantial damages against us. In addition, a failure or inability to meet a contractual requirement could seriously damage our
reputation and affect our ability to attract new business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
services we provide are often critical to our customers&#8217; businesses. We generally provide customer support after our customized
application is delivered. Certain of our customer contracts require us to comply with security obligations including maintaining system
security, ensuring our system is virus-free, maintaining business continuity procedures, and verifying the integrity of employees that
work with our customers by conducting background checks. Any failure in a customer&#8217;s system or breach of security relating to the
services we provide to the customer could damage our reputation or result in a claim for substantial damages against us. Any significant
failure of our systems could impede our ability to provide services to our customers, have a negative impact on our reputation, cause
us to lose customers, reduce our revenues and harm our business.</span></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><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 -->9<!-- 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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>Unauthorized
disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services
could expose us to liability, protracted and costly litigation and damage our reputation.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business involves the collection, storage, processing and transmission of customers&#8217; business data. An increasing number of organizations,
including large merchants and businesses, other large technology companies, financial institutions and governmental institutions, have
disclosed breaches of their information technology systems, some of which have involved sophisticated and highly targeted attacks, including
on portions of their websites or infrastructure. We could also be subject to breaches of security by hackers. Threats may derive from
human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Concerns
about security are increased when we transmit information. Electronic transmissions can be subject to attacks, interceptions or losses.
Also, computer viruses and malware can be distributed and spread rapidly over the internet and could infiltrate our systems or those
of our associated participants, which can impact the confidentiality, integrity and availability of information, and the integrity and
availability of our products, services and systems, among other effects. Denial of services or other attacks could be launched against
us for a variety of purposes, including interfering with our services or creating a diversion for other malicious activities. These types
of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation,
force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liabilities, subject us to lawsuits,
fines or sanctions, distract our management or increase our costs of business operations.</span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
encryption of data and other protective measures may not prevent unauthorized access or use of sensitive data. A breach of our system
or that of one of our associated participants may subject us to material losses or liabilities. A misuse of such data or a cybersecurity
breach could harm our reputation and deter customers from using our products and services, thus reducing our revenue. In addition, any
such misuse or breach could cause us to incur costs to correct the breaches or failures, expose us to uninsured liability, increase our
risk of regulatory scrutiny, subject us to lawsuits, result in the imposition of material penalties and fines under applying laws or
regulations.</span></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; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
cannot assure that there are written agreements in place with every associated participant or that such written agreements will prevent
the unauthorized use, modification, destruction or disclosure of data or enable us or our customers to obtain reimbursement in the event
we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data. Any unauthorized use, modification,
destruction or disclosure of data could result in protracted and costly litigation, which could have a material adverse effect on our
business, financial condition and results of operations.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cybersecurity
incidents are increasing in frequency and evolving in nature and include, but are not limited to, installation of malicious software,
unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of
confidential or otherwise protected information and the corruption of data. Given the unpredictability of the timing, nature and scope
of information technology disruptions, there can be no assurance that the procedures and controls that we employ will be sufficient to
prevent security breaches from occurring and we could be subject to manipulation or improper use of our systems and networks or financial
losses from remedial actions, any of which could have a material adverse effect on our business, financial condition and results of operations.</span></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"><b><i>&#160;</i></b></span></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"><b><i>Interruptions
or performance problems associated with our technology and infrastructure may adversely affect our business, results of operations, and
financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
continued growth depends in part on the ability of our existing customers and new customers to access our SaaS services, at any time
and within an acceptable amount of time. We may in the future experience service disruptions, outages and other performance problems
due to a variety of factors, including infrastructure changes, human or software errors or capacity constraints. In some instances, we
may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It may become increasingly
difficult to maintain and improve our performance as our SaaS services become more complex. If our services are unavailable or if our
customers are unable to access features of our services within a reasonable amount of time or at all, our business would be negatively
affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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: 15; 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 -->10<!-- 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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently provide our <i>SaaS</i> services via designated data centers and we intend to outsource our cloud infrastructure to commercially
available cloud infrastructure as a service providers (&#8220;<b>IaaS</b>&#8221;), which can host our services. Our customers need to
be able to access our services at any time, without interruption or degradation of performance. IaaS providers run their own platforms
that we access, and we are, therefore, vulnerable to service interruptions.&#160;We expect that in the future we may experience interruptions,
delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human
or software errors, website hosting disruptions and capacity constraints. Capacity constraints could be due to a number of potential
causes including technical failures, natural disasters, fraud or security attacks. In addition, if our security, or that of IaaS providers,
is compromised, our services are unavailable or our customers are unable to use our services within a reasonable amount of time or at
all, then our business, results of operations and financial condition could be adversely affected. In some instances, we expect that
we may not be able to identify the cause or causes of these performance problems within a period of time acceptable to our customers.
It may become increasingly difficult to maintain and improve our service performance, especially during peak usage times, as the features
of our services become more complex and the usage of our services increases. Any of the above circumstances or events may harm our reputation,
cause customers to stop using our services, impair our ability to increase revenue from existing customers, impair our ability to grow
our customer base and otherwise harm our business, results of operations, and financial condition.</span></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"><b><i>&#160;</i></b></span></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"><b><i>The
market for our BaaS (blockchain-as-a-service) services is new and unproven, which could result in limited customer adoption of our services,
limited customer retention, or weaker customer expansion.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently provide our BaaS services as pilot projects on a limited basis to selected customers. While we believe that, over time, the
concept of a BaaS services will become fundamental to an organization&#8217;s core operations involving global trade, the market for
BaaS services is largely unproven and is subject to a number of risks and uncertainties.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market for BaaS services is new and less mature than traditional on-premises software applications, and the adoption rate for BaaS services
may be slower among customers with business practices requiring highly customizable application software. Our success with BaaS services
will depend to a substantial extent on the widespread adoption of BaaS services in general, but we cannot be certain that the trend of
adoption of BaaS services will continue in the future. In particular, many organizations have invested substantial personnel and financial
resources in integrating traditional software into their businesses over time, and some may be reluctant or unwilling to migrate to BaaS.
It is difficult to predict customer adoption rates and demand for our BaaS services, the future growth rate and size of the BaaS services
market or the entry of competitive applications. The expansion of the BaaS services market depends on a number of factors, including
the cost, performance and perceived value associated with BaaS. If BaaS services do not continue to achieve market acceptance, or there
is a reduction in demand for BaaS services caused by a lack of customer acceptance, technological challenges, weakening economic conditions,
data security or privacy concerns, governmental regulations, competing technologies and services or decreases in information technology
spending, it would result in decreased revenues and our business would be adversely affected.</span></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">&#160;</span></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"><b><i>It
is difficult to predict our future operating results.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to accurately forecast our future operating results is limited and subject to a number of uncertainties, including planning for
and modeling future growth. We have encountered, and will continue to encounter, risks, and uncertainties frequently experienced by growing
companies in rapidly changing industries. If our assumptions regarding these risks and uncertainties, which we use to plan our business,
are incorrect or change due to industry or market developments, or if we do not address these risks successfully, our operating results
could differ materially from our expectations and our business could suffer.</span></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">&#160;</span></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"><b><i>If
we have overestimated the size of our total addressable market, our future growth rate may be limited.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have estimated the size of our total addressable market based on data published by third parties and internally generated data and assumptions.
We have not independently verified any third-party information and cannot be assure of its accuracy or completeness. While we believe
our market size estimates are reasonable, such information is inherently imprecise. In addition, our projections, assumptions and estimates
of opportunities within our market are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including
but not limited to those described in this Annual Report. If this third-party or internally generated data prove to be inaccurate or
we make errors in our assumptions based on that data, our actual market may be more limited than our estimates. In addition, these inaccuracies
or errors may cause us to misallocate capital and other critical business resources, which could harm our business.</span></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>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Even
if our total addressable market meets our size estimates and experiences growth, we may not continue to grow our share of the market.
Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to various risks
and uncertainties. Accordingly, the estimates of our total addressable market included in this Annual Report should not be taken as indicative
of our ability to grow our business. For more information regarding the estimates of market opportunity and the forecasts of market growth
included in this Annual Report, see &#8220;Industry Background&#8221; and &#8220;Business&#8212;Our Opportunity&#8221;.</span></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"><b><i>&#160;</i></b></span></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"><b><i>We
face intense competition from onshore and offshore software application and technology service providers, and if we are unable to compete
effectively, we may lose customers and our revenues may decline.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market for software application and technology services is highly competitive and we expect competition to persist and intensify. We
believe that the principal competitive factors in our markets are domain knowledge and industry expertise, breadth and depth of service
offerings, quality of the services offered, reputation and track record, marketing and selling skills, scalability of technology infrastructure
and price. In the software application and technology services market, customers tend to engage multiple service providers instead of
using an exclusive service provider, which could reduce our revenues to the extent that customers obtain services from other competing
providers. Our ability to compete also depends in part on a number of factors beyond our control, including the ability of our competitors
to recruit, train, develop and retain highly skilled professionals, the price at which our competitors offer comparable services and
our competitors&#8217; responsiveness to customer needs. Therefore, we cannot assure you that we will be able to retain our customers
while competing against such competitors. Increased competition, our inability to compete successfully against competitors, pricing pressures
or loss of market share could harm our business, financial condition and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></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"><b><i>Our
corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity
and teamwork fostered by our culture, which could harm our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.4in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that our culture has been and will continue to be a key contributor to our success. We have optimized our operations in 2022
fiscal year&#160;for the anticipated growth and the number of our total employees decreased from 219 in December 2021 to 187 in December
2022. We expect to continue to adjust our workforce according to operational needs. If we do not continue to maintain our corporate culture
as we grow, we may be unable to foster the innovation, creativity, and teamwork we believe we need to support our growth. Our substantial
anticipated headcount growth and our transition from a private company to a public company may result in a change to our corporate culture,
which could harm our business.</span></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">&#160;</span></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"><b><i>Our
success depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely
disrupted if we lose their services.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
future success heavily depends upon the continued services of our senior executives and other key employees. If one or more of our senior
executives or key employees are unable or unwilling to continue in their present positions, it could disrupt our business operations,
and we may not be able to replace them easily or at all. In addition, competition for senior executives and key personnel in our industry
is intense, and we may be unable to retain our senior executives and key personnel or attract and retain new senior executive and key
personnel in the future, in which case our business may be severely disrupted, and our financial condition and results of operations
may be materially and adversely affected. If any of our senior executives or key personnel joins a competitor or forms a competing company,
we may lose customers, suppliers, know-how and key professionals and staff members to them. Also, if any of our business development
managers, who generally keep a close relationship with our customers, joins a competitor or forms a competing company, we may lose customers,
and our revenues may be materially and adversely affected. Additionally, there could be unauthorized disclosure or use of our technical
knowledge, practices or procedures by such personnel. All of our executives and key personnel have entered into employment agreements
with us that contain non-competition provisions, non-solicitation and nondisclosure covenants. However, if any dispute arises among our
executive officers, key personnel and us, such non-competition, non-solicitation and nondisclosure provisions might not provide effective
protection to us, especially in China, where most of these executive officers and key employees reside, in light of the uncertainties
with China&#8217;s legal system.</span></p><div>




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</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><i>&#160;</i></b></span></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"><b><i>Due
to intense competition for highly skilled personnel, we may fail to attract and retain enough sufficiently trained personnel to support
our operations; as a result, our ability to generate new business may be negatively affected and our revenues could decline.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
software application and technology service industry rely on skilled personnel, and our success depends to a significant extent on our
ability to recruit, train, develop and retain qualified personnel, especially experienced middle and senior level management. There is
significant competition for skilled personnel, especially experienced middle and senior level management, with the skills necessary to
perform the services we offer to our customers. Increased competition for these personnel, in the software application and technology
service industry or otherwise, could have an adverse effect on us. We have established certain programs to enhance our human capital
and employee loyalty, however, a significant increase in our attrition rate could decrease our operating efficiency and productivity
and could lead to a decline in demand for our services. Additionally, failure to recruit, train, develop and retain personnel with the
qualifications necessary to fulfill the needs of our existing and future customers or to assimilate new personnel successfully could
have a material adverse effect on our business, financial condition and results of operations. Failure to retain our key personnel on
customer projects or find suitable replacements for key personnel upon their departure may lead to termination of some of our customer
contracts or cancellation of some of our projects, which could materially and adversely affect our business.</span></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">&#160;<b><i>&#160;</i></b></span></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"><b><i>Our
profitability will suffer if we are not able to maintain our resource utilization levels and continue to improve our productivity levels.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
gross margin and profitability are significantly impacted by our utilization levels of human resources as well as our ability to increase
our productivity levels. We have expanded our operations in recent years through organic growth, which has resulted in a significant
increase in our headcount and fixed overhead costs. We may face difficulties maintaining high levels of utilization. Although we try
to use all commercially reasonable efforts to accurately estimate service and resource requirements from our customers, we may overestimate
or underestimate, which may result in unexpected cost and strain or redundancy of our human capital and adversely impact our utilization
levels. In addition, some of our professionals are trained to work for specific customers or on specific projects and some of our sales
are dedicated to specific customers or specific projects. Our ability to continually increase our productivity levels depends significantly
on our ability to recruit, train, develop and retain high-performing professionals and project staffs appropriately and optimize our
mix of services and delivery methods. If we experience a slowdown or stoppage of service for any customer or on any project for which
we have dedicated professionals or project staffs, we may not be able to efficiently reallocate these professionals and project staffs
to other customers and projects to keep their utilization and productivity levels high. If we are not able to maintain high resource
utilization levels without corresponding cost reductions or price increases, our profitability will suffer.</span></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">&#160;</span></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"><b><i>If
we are not able to maintain a strong brand for our services and increase market awareness of our Company and our services, then our business,
results of operations and financial condition may be adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that we have a strong brand name in our industry and the continuing success of our services will depend in part on our ability
to develop and sustain a strong brand identity for our services and to increase the market awareness of our services and their capabilities.
The successful promotion of our brand will depend largely on our continuous marketing efforts and our ability to offer high quality services
to our customers. Our brand promotion activities may not be successful or produce increased revenue. In addition, independent industry
analysts may provide reviews of our services and of competing products and services, which may significantly influence the perception
of our services in the marketplace. If these reviews are negative or not as positive as reviews of our competitors&#8217; products and
services, then our brand may be harmed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
promotion of our brand also requires us to make substantial expenditures, and we anticipate that these expenditures will increase as
our industry becomes more competitive and as we seek to expand into new markets. These higher expenditures may not result in any increased
revenue or incremental revenue that is sufficient to offset the higher expense levels. If we do not successfully maintain and enhance
our brand, then our business may not grow, we may see our pricing power reduced relative to competitors and we may lose customers, all
of which would adversely affect our business, results of operations and financial condition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may be unsuccessful in entering into strategic alliances or identifying and acquiring suitable acquisition candidates, which could impede
our growth and negatively affect our revenues and net income.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have pursued strategic alliances and intend to pursue strategic acquisition opportunities to increase our scale and geographical presence,
expand our service offerings and capabilities and enhance our industry and technical expertise. While we believe the strategic plans
that we implemented would enable us to better leverage synergies between our existing businesses and the newly expanded business, thus
improved our overall business operations, those strategic plans may not be ultimately successful. For instance, we intend to expand our
blockchain business by acquiring Smartconn Co., Limited, contribute expansion of Powerbridge&#8217;s operations in digital trade ecosystem
by acquiring DTI Group Limited and develop our metaverse operation by acquiring AIedu. See &#8220;Item 4. Information on the Company&#8212;C.
History and Development of the Company&#8221; and &#8220;Item 5. Operating and Financial Review and Prospects &#8212; Recent developments.&#8221;
for further information on the acquisition transactions entered into by us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, it is possible that in the future we may not succeed in identifying suitable alliances or acquisition candidates. Even if we
identify suitable candidates, we may not be able to consummate these arrangements on terms commercially acceptable to us or to obtain
necessary regulatory approvals in the case of acquisitions. Challenges we face in the potential acquisition and integration process include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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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    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">integrating operations,
    services and personnel in a timely and efficient manner;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">unforeseen or undisclosed
    liabilities;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">generating sufficient revenue
    and net income to offset acquisition costs;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">potential loss of, or harm
    to, employee or customer relationships;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">properly structuring our
    acquisition consideration and any related post-acquisition earn-outs and successfully monitoring any earn-out calculations and payments;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">retaining key senior management
    and key sales and marketing and research and development personnel;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">potential incompatibility
    of solutions, services and technology or corporate cultures;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">consolidating and rationalizing
    corporate, information technology and administrative infrastructures;</span></td></tr>
  </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: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">integrating and documenting
    processes and controls;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">entry into unfamiliar markets;
    and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">increased complexity from
    potentially operating in geographically dispersed sites, particularly if we acquire a company or business with facilities or operations
    outside of China.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
many of our competitors are likely to enter into similar arrangements or acquire the same targets that we are looking to enter into or
acquire. Such competitors may have substantially greater financial resources than we do and may be more attractive to our strategic partners
or be able to outbid us for the acquisition targets. In addition, we may also be unable to timely deploy our existing cash balances to
effect a potential acquisition, as use of cash balances located onshore in China may require specific governmental approvals or result
in withholding and other tax payments. To the extent cash is located in the PRC, Hong Kong or Macau or within a PRC, Hong Kong or Macau
domiciled entity and may need to be used outside of the PRC, Hong Kong or Macau, the funds may not be available due to limitations placed
on us by the PRC government. If we are unable to enter into suitable strategic alliances or complete suitable acquisitions, our growth
strategy may be impeded and our revenues and net income could be negatively affected.</span></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">&#160;</span></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"><b><i>Some
of our technology incorporates &#8220;open source&#8221; software, which could negatively affect our ability to sell our services and
subject us to possible litigation.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some
aspects of our technology platforms from which we develop our services, are built using open-source software, and we intend to continue
to use open-source software in the future. The terms of certain open-source licenses to which we are subject have not been interpreted
by U.S., China or foreign courts, and there is a risk that open-source software licenses could be construed in a manner that imposes
unanticipated conditions or restrictions on our ability to monetize our services. Additionally, we may from time to time face claims
from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that we developed using
such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open-source
license. These claims could result in litigations and could require us to make our software source code freely available, purchase a
costly license or cease offering the implicated services unless and until we can re-engineer them to avoid infringement. This re-engineering
process could require significant additional research and development resources, and we may not be able to complete it successfully.
In addition to the risks related to license requirements, use of certain open-source software can lead to greater risks than use of third-party
commercial software, as open source licensors generally do not provide warranties or controls on the origin of software. Any of these
risks could be difficult to eliminate or manage, and if not addressed, could have a negative effect on our business, results of operations
and financial condition.</span></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>

</div><!-- Field: Page; Sequence: 19; 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 -->14<!-- 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; text-indent: 0.5in">&#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"><b><i>We
may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through
our employees or otherwise.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are typically required to manage, utilize and store sensitive or confidential customer data in connection with the services that we provide.
Under the terms of our customer contracts, we are required to keep such information strictly confidential. We use system and network
security technologies and other methods to protect sensitive and confidential customer data. We also require our employees and subcontractors
to enter into confidentiality agreements to limit access to and distribution of our customers&#8217; sensitive and confidential information
as well as our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequate to protect our
customers&#8217; confidential information. If our customers&#8217; proprietary rights are misappropriated by our employees or our subcontractors
or their employees, in violation of any applicable confidentiality agreements or otherwise, our customers may consider us liable for
those acts and seek damages and compensation from us. Any such acts could cause us to lose existing and future business and damage our
reputation in the market. In addition, we currently do not have any insurance coverage for mismanagement or misappropriation of such
information by our subcontractors or employees. Any litigations with respect to unauthorized disclosure of sensitive and confidential
information might result in substantial costs and diversion of resources and management attention.</span></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; font-size: 10pt">&#160;<b><i>&#160;</i></b></span></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"><b><i>We
may not be able to prevent others from unauthorized use of our intellectual property, which could cause a loss of customers, reduce our
revenues and harm our competitive position.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely on a combination of patent, copyright, trademark, software registration, anti-unfair competition and trade secret laws, as well
as confidentiality agreements and other methods to protect our intellectual property rights. To protect our trade secrets and other proprietary
information, employees, customers, subcontractors, consultants, advisors and collaborators are required to enter into confidential agreements.
These agreements might not provide effective protection for the trade secrets, know-how or other proprietary information in the event
of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. Implementation
of intellectual property related laws in China has historically been lacking, primarily because of ambiguities in the PRC laws and difficulties
in enforcement. Accordingly, intellectual property rights and confidentiality protections in China may not be as effective as those in
the United States or other developed countries, and infringement of intellectual property rights continues to pose a serious risk of
doing business in China. Our patent applications may not issue as patents or may not issue as patents that provide meaningful protection
against third parties. Policing unauthorized use of proprietary technology is difficult and expensive. The steps we have taken may be
inadequate to prevent the misappropriation of our proprietary technology. Reverse engineering, unauthorized copying, other misappropriation,
or negligent or accidental leakage of our proprietary technologies could enable third parties to benefit from our technologies without
obtaining our consent or paying us for doing so, which could harm our business and competitive position. Though we are not currently
involved in any litigation with respect to intellectual property, we may need to enforce our intellectual property rights through litigations.
Litigations relating to our intellectual property may not prove successful and might result in substantial costs and diversion of resources
and management attention.</span></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">&#160;&#160;</span></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"><b><i>We
may face intellectual property infringement claims that could be time-consuming and costly to defend. If we fail to defend ourselves
against such claims, we may lose significant intellectual property rights and may be unable to continue providing our existing services.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
success largely depends on our ability to use and develop our technology and services without infringing the intellectual property rights
of third parties, including copyrights, trade secrets and trademarks. We may be subject to litigations involving claims of violation
of other intellectual property rights of third parties. The holders of other intellectual property rights potentially relevant to our
service offerings may make it difficult for us to acquire a license on commercially acceptable terms. Also, we may be unaware of intellectual
property registrations or applications relating to our services that may give rise to potential infringement claims against us. There
may also be technologies licensed to and relied on by us that are subject to infringement or other corresponding allegations or claims
by third parties which may damage our ability to rely on such technologies. We are subject to additional risks as a result of our recent
and proposed acquisitions and the hiring of new employees who may misappropriate intellectual property from their former employers. Parties
making infringement claims may be able to obtain an injunction to prevent us from delivering our services or using technology involving
the allegedly infringing intellectual property. Intellectual property litigation is expensive and time-consuming and could divert management&#8217;s
attention from our business. A successful infringement claim against us, whether with or without merit, could, among others things, require
us to pay substantial damages, develop non-infringing technology, or re-brand our name or enter into royalty or license agreements that
may not be available on acceptable terms, if at all, and cease making, licensing or using products that have infringed a third party&#8217;s
intellectual property rights. Protracted litigation could also result in existing or potential customers deferring or limiting their
purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringement
claims in certain instances. Any intellectual property claims or litigation in this area, whether we ultimately win or lose, could damage
our reputation and have a material adverse effect on our business, results of operations or financial condition.</span></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"><b><i>&#160;</i></b></span></p><div>

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

</div><!-- Field: Page; Sequence: 20; 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 -->15<!-- 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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
use third-party licensed software in or with our services, and the inability to maintain these licenses or errors in the software services
we provide could result in increased costs or reduced service levels, which would adversely affect our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services incorporate certain third-party software obtained under licenses from other companies. We anticipate that we will continue to
rely on such third-party software and development tools in the future. Such third-party companies may discontinue their products, go
out of business or otherwise cease to make support available for such third-party software. Although we believe that there are commercially
reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or
costly to replace. In addition, integration of the software used in our services with new third-party software may require significant
work and substantial investment of our time and resources. Also, to the extent that our services depends upon the successful operation
of third-party software in conjunction with our software, any undetected errors or defects in such third-party software could prevent
the deployment or impair the functionality of our services, delay new feature introductions, result in a failure of our services and
injure our reputation. Our use of additional or alternative third-party software would require us to enter into license agreements with
third parties. In the event that we are not able to maintain our licenses to third-party software, or cannot obtain licenses to new software
as needed to enhance our services, our business and results of operations may be adversely affected.</span></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">&#160;&#160;</span></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"><b><i>We
may need additional capital and any failure by us to raise additional capital on terms favorable to us, or at all, could limit our ability
to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that our current cash and cash flow from operations would be sufficient to meet our anticipated cash needs for at least the next
12 months from the date of this Annual Report. However, in order to capitalize on the growing needs of the Company, we intend to expand
to capture additional market shares. Thus, we may however, require additional cash resources for our research and development, sales
and market and potential strategic alliances and acquisitions. If these cash resources are insufficient to satisfy our cash requirements,
we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could
result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require
us to agree to operating and financing covenants that would restrict our operations. Our ability to obtain additional capital on acceptable
terms is subject to a variety of uncertainties, including:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">investors&#8217; perception
    of, and demand for, securities of technology services outsourcing companies;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">conditions of the U.S.
    and other global markets in which we may seek to raise funds;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our future results of operations
    and financial condition;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC government regulation
    of foreign investment in China;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">economic, political and
    other conditions in China; and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC government policies
    relating to the borrowing and remittance outside China of foreign currency.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the event that we are in need of additional financing, such financing may not be available in amounts or on terms acceptable to us, if
at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to grow our business
and develop or enhance our solution and service offerings to respond to market demand or competitive challenges.</span></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"><b><i>&#160;</i></b></span></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"><b><i>Failure
to comply with anti-bribery, anti-corruption, and anti-money laundering laws could subject us to penalties and other adverse consequences.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to anti-corruption, anti-bribery and anti-money laundering laws in China and various other jurisdictions. From time to time,
we leverage third party partners and intermediaries, including channel partners, to sell our services. We and our third-party intermediaries
may have direct or indirect interactions with officials and employees of governmental agencies or state-owned or affiliated organizations
and may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees,
representatives, contractors, channel partners, and agents, even if we do not explicitly authorize such activities. While we have policies
and procedure to address compliance with such laws, we cannot assure you that all of our employees and agents will not take actions in
violation of our policies and applicable law, for which we may be ultimately held responsible. Any violation of the applicable anti-bribery,
anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations,
severe criminal or civil sanctions, or suspension or debarment from government contracts, all of which may have an adverse effect on
our reputation, business, operating results and prospects.</span></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"><b><i>&#160;</i></b></span></p><div>

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

</div><!-- Field: Page; Sequence: 21; 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 -->16<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<b><i>&#160;</i></b></span></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"><b><i>Fluctuation
in the value of the Renminbi and other currencies may have a material adverse effect on the value of your investment.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
financial statements are expressed in U.S. dollars. However, a majority of our revenues and expenses are denominated in Renminbi. Our
exposure to foreign exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies
of each entity. We do not believe that we currently have any significant direct foreign exchange risk and have not hedged exposures denominated
in foreign currencies or any other derivative financial instruments. However, the value of your investment in our Ordinary Shares will
be affected by the foreign exchange rate between U.S. dollars and RMB because the primary value of our business is effectively denominated
in RMB, while the Ordinary Shares will be traded in U.S. dollars.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
value of the RMB against the U.S. 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. The People&#8217;s Bank of China regularly intervenes in the foreign
exchange market to limit fluctuations in RMB exchange rate and achieve certain exchange rate targets, and through such intervention kept
the U.S. dollar-RMB exchange rate relatively stable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
we may rely on dividends paid to us by our PRC subsidiaries and branches, any significant revaluation of the RMB may have a material
adverse effect on our revenues and financial condition, and the value of any dividends payable on our Ordinary Shares in foreign currency
terms. For example, to the extent that we need to convert U.S. dollars we received from offerings into for our operations, appreciation
of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we received from the conversion. Conversely, 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. Furthermore,
appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S.
dollar terms without giving effect to any underlying change in our business or results of operations. We cannot predict the impact of
future exchange rate fluctuations on our results of operations and may incur net foreign exchange losses in the future. In addition,
our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert into foreign
currencies.&#160;</span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Adverse
developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance
by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our
financial condition and results of operations.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adverse
developments that affect financial institutions, transactional counterparties or other third parties, or concerns or rumours about any
events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example,
on March 10, 2023, Silicon Valley Bank (&#8220;SVB&#8221;) was closed by the California Department of Financial Protection and Innovation,
which appointed the Federal Deposit Insurance Corporation (&#8220;FDIC&#8221;) as receiver. Similarly, on March 12, 2023, Signature Bank
and Silvergate Capital Corp. were each swept into receivership. The U.S. Department of the Treasury, the Federal Reserve and the FDIC
released a statement that indicated that all depositors of SVB would have access to all of their money after only one business day of
closure, including funds held in uninsured deposit accounts.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inflation
and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest
rates below current market interest rates. Although the U.S. Department of Treasury, FDIC and Federal Reserve Board have announced a
program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial
institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or
other liquidity needs of financial institutions for immediately liquidity may exceed the capacity of such program. There is no guarantee
that the U.S. Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event
of the closure of other banks or financial institutions, or that they would do so in a timely fashion.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
we currently neither holds bank accounts in nor has banking relationship with the SVB, Signature Bank and Silvergate Capital Corp, there
are factors that could adversely affect us, including, among others, events such as liquidity constraints or failures, the ability to
perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the
financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial
services industry. These factors could involve financial institutions or financial services industry companies with which we have financial
or business relationships but could also include factors involving financial markets or the financial services industry generally.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, widespread investor concerns regarding the U.S. or international financial systems could result in less favourable commercial
financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access
to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline
in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our
operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations
or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors
described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our
current and/or projected business operations and financial condition and results of operations.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
a partner or supplier could be adversely affected by any of the liquidity or other risks that are described above as factors that could
result in material adverse impacts on the Company, including but not limited to delayed access or loss of access to uninsured deposits
or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution. Any partner or supplier
bankruptcy or insolvency, or the failure of any partner to make payments when due, or any breach or default by a partner or supplier,
or the loss of any significant supplier relationships, may have a material adverse impact on our business.</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"></p><div>

</div><!-- Field: Page; Sequence: 22; 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 -->17<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>As
we plan to expand internationally, our business will become more susceptible to risks associated with international operations.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Historically,
we have generated all of our revenue from customers in PRC. We plan to expand our market coverage internationally, with a focus on B&amp;R
countries, including countries in Asia and Eastern Europe, Middle East, Africa and South America. Conducting international operations
subjects us to risks that we have not generally faced in the PRC. These risks include:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">challenges caused by distance,
    language, cultural and ethical differences and the competitive environment;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">heightened risks of unethical,
    unfair or corrupt business practices, actual or claimed, in certain geographies and of improper or fraudulent sales arrangements
    that may impact financial results and result in restatements of, and irregularities in, financial statements;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">application of multiple
    and conflicting laws and regulations, including complications due to unexpected changes in foreign laws and regulatory requirements;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">risks associated with trade
    restrictions and foreign import requirements, including the importation, certification and localization of our solutions required
    in foreign countries, as well as changes in trade, tariffs, restrictions or requirements;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">new and different sources
    of competitions;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">potentially different pricing
    environments, longer sales cycles and longer accounts receivable payment cycles and collections issues;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">management communication
    and integration problems resulting from cultural differences and geographic dispersion;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">greater difficulty in enforcing
    contracts, accounts receivable collection and longer collection periods;</span></td></tr>
  </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: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the uncertainty and limitation
    of protection for intellectual property rights in some countries;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">increased financial accounting
    and reporting burdens and complexities;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">lack of familiarity with
    locals laws, customs and practices, and laws and business practices favoring local competitors or partners;</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">uncertainties in global
    economy and foreign markets caused by COVID-19; and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">political, social and economic
    instability abroad, terrorist attacks and security concerns in general.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
of these risks could adversely affect our business. For example, compliance with laws and regulations applicable to our international
operations increases our cost of doing business in foreign jurisdictions. We may be unable to keep pace with changes in government requirements
as they change from time to time. Failure to comply with these regulations could have adverse effects on our business. In addition, in
many foreign countries it is common for others to engage in business practices that are prohibited by our internal policies and procedures
or applicable PRC laws and regulations. As we grow, we continue to implement compliance procedures designed to prevent violations of
these laws and regulations. There can be no assurance that all of our employees, contractors, resellers, and agents will comply with
the formal policies we will implement, or applicable laws and regulations. Violations of laws or key control policies by our employees,
contractors, resellers, or agents could result in delays in revenue recognition, financial reporting misstatements, fines, penalties,
or the prohibition of the import or export of our software and services, and could have a material adverse effect on our business and
results of operations.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further,
our limited experiences in operating our business internationally increases the risk that any potential future expansion efforts that
we may undertake will not be successful. If we invest substantial time and resources to expand our international operations and are unable
to do so successfully, or in a timely manner, our business and results of operations will suffer.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>Our
international operations may subject us to potential adverse tax consequences.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
plan to expand our international operations and staff to better support our growth into international markets. Our corporate structure
and associated transfer pricing policies contemplate future growth into the international markets, and consider the functions, risks
and assets of the various entities involved in the intercompany transactions.&#160;The amount of taxes we pay in different countries
and jurisdictions may depend on the application of the tax laws of the various countries and jurisdictions, including the United States,
to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies
and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing
authorities of the countries and jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions
pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific
jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional
taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall
profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>As
we plan to participate in retail and distribution of cryptocurrency mining machines, we&#8217;ve entered into certain customized servers
purchase agreement. The demand of our cryptocurrency mining machines is affected by the market of cryptocurrency. Substantial increases
in the supply of mining machines connected to the certain cryptocurrency network would lead to an increase in network capacity, which
in turn would increase mining difficulty. This development would negatively affect the economic returns of cryptocurrency mining activities,
which would decrease the demand for and/or pricing of our products.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
difficulty of cryptocurrency mining, or the amount of computational resources required for a set amount of reward for recording a new
block, directly affects the expected economic returns for cryptocurrency miners, which in turn affects the demand for our cryptocurrency
mining machines. Cryptocurrency mining difficulty is a measure of how much computing power is required to record a new block and it is
affected by the total amount of computing power in the cryptocurrency network. For example, the Bitcoin algorithm is designed so that
one block is generated, on average, every ten minutes, no matter how much computing power is in the network. Thus, as more computing
power joins the network, and assuming the rate of block creation does not change (remaining at one block generated every ten minutes),
the amount of computing power required to generate each block and hence the mining difficulty increases. In other words, based on the
current design of the Bitcoin network, Bitcoin mining difficulty would increase together with the total computing power available in
the Bitcoin network, which is in turn affected by the number of Bitcoin mining machines in operation. Additionally, the amount of Bitcoin
awarded for solving each block is designed to decline approximately every four years, with the most recent halving event occurred in
May 2020. As a result, a strong growth in sales of our cryptocurrency mining machines can contribute to further growth in the total computing
power in the network, thereby driving up the difficulty of cryptocurrency mining and coupled with the decrease in cryptocurrency reward,
resulting in downward pressure on the expected economic return of cryptocurrency mining and the demand for, and pricing of, our products,
under the assumption that the price of cryptocurrency does not increase enough.</span></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">&#160;</span></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"><b><i>Cryptocurrency
exchanges and wallets, and to a lesser extent, the cryptocurrency network itself, may suffer from hacking and fraud risks, which may
adversely erode user confidence in cryptocurrency which would decrease the demand for our cryptocurrency mining machines.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cryptocurrency
transactions are entirely digital and, as with any virtual system, are at risk from hackers, malware and operational glitches. Hackers
can target cryptocurrency exchanges and transactions, to gain access to thousands of accounts and digital wallets where cryptocurrency
are stored. Cryptocurrency transactions and accounts are not insured by any type of government program and all cryptocurrency transactions
are permanent because there is no third party or payment processor. Cryptocurrency has suffered from hacking and cyber-theft as such
incidents have been reported by several cryptocurrency exchanges and miners, highlighting concerns about the security of cryptocurrency
and therefore affecting its demand and price. Also, the price and exchange of cryptocurrency may be affected due to fraud risk. While
cryptocurrency uses private key encryption to verify owners and register transactions, fraudsters and scammers may attempt to sell false
cryptocurrency. All of the above may adversely affect the operation of the cryptocurrency network which would erode user confidence in
cryptocurrency, which would negatively affect demand for our products.</span></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">&#160;</span></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"><b><i>We
face intense competition and our competitors may employ aggressive pricing strategies, which can lead to a price reduction of our products
and material adverse effect on our results of operations.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may look to enter into markets with very competitive landscapes. Our competitors include many well-known domestic and international players,
and we face competitors that are larger than us and have advantages over us in terms of economies of scale and financial and other resources.
We expect that competition in our markets will continue to be intense, as we compete not only with existing players that have been focusing
on cryptocurrency mining or AI, but also new entrants that include well-established players in the semiconductor industry, or players
who have not been predisposed to this industry in the past. Some of these competitors may also have stronger brand names, greater access
to capital, longer histories, longer relationships with their suppliers or customers and more resources than we do. Furthermore, these
competitors may be able to adapt to changes in the industry more promptly and efficiently. Intense competition from existing and potential
competitors could result in material price reductions in the products we sell or a decrease in our market share. Aggressive pricing strategies
by our competitors and an abundant supply of cryptocurrency mining machines or AI products in the market may cause us to reduce the prices
of our products and also negatively affect the demand for our products or harm our profitability. If we fail to compete effectively and
efficiently or fail to adapt to changes in the competitive landscape, our business, financial condition and results of operations may
be materially and adversely affected.</span></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">&#160;</span></p><div>

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</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"><b><i>Our
Cryptocurrency mining machine business depends on supplies from limited numbers of third-party foundry partners, and any failure to obtain
sufficient foundry capacity from these third-party foundry partners would significantly delay the shipment of our products.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
we rely on limited numbers of third-party foundry partners, we cannot guarantee that they will be able to meet our manufacturing requirements.
The ability of our third-party foundry partners to provide us with foundry services is limited by their technology migration, available
capacity, existing obligations and global semiconductor supply. In particular, we have experienced a global shortage in semiconductors
beginning 2021, which may have adversely impacted the production activity and capacity of our third-party foundry partners. If these
third-party foundry partners fail to succeed in their technology migration or secure enough semiconductors, they will not be able to
deliver to us qualified products in a sufficient amount, which will significantly affect our technological advancement and shipment of
cryptocurrency mining machines. This could in turn result in lost sales and have a material adverse effect on our relationships with
our customers and on our business and financial condition.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, we do not have a guaranteed level of production capacity from our third-party foundry partners. We do not have long-term contracts
with them, and we source our supplies on a purchase order basis and prepay the purchase amount. As a result, we depend on our third-party
foundry partners to allocate to us a portion of their manufacturing capacity sufficient to meet our needs, to produce products of acceptable
quality and at acceptable final test yields and to deliver those products to us on a timely basis and at acceptable prices. If our third-party
foundry partners raise their prices or are unable to meet our required capacity for any reason, such as shortages or delays in the shipment
of semiconductor equipment, or if our business relationships with them deteriorate, we may not be able to obtain the required capacity
and would have to seek alternative foundries, which may not be available on commercially reasonable terms, or at all. Moreover, it is
possible that other customers of our third-party foundry partners that are larger and/or better financed than we are, or that have long-term
contracts with them, may receive preferential treatment in terms of capacity allocation or pricing. In addition, if we do not accurately
forecast our capacity needs, our third-party foundry partners may not have available capacity to meet our immediate needs or we may be
required to pay higher costs to fulfill those needs, either of which could materially and adversely affect our business, operating results
or financial condition.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
risks associated with our dependence on a few third-party foundry partners include limited control over delivery schedules and quality
assurance, lack of capacity in periods of excess demand, unauthorized use of our intellectual property and limited ability to manage
inventory and parts.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
if any of our third-party foundry partners suffers any damage to its facilities, suspends manufacturing operations, loses benefits under
material agreements, experiences power outages or computer virus attacks, lacks sufficient capacity to manufacture our products, encounters
financial difficulties, is unable to secure necessary raw materials from its suppliers or suffers any other disruption or reduction in
efficiency, we may encounter supply delays or disruptions.</span></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">&#160;</span></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"><b><i>Failure
to maintain inventory levels of our cryptocurrency mining machines in line with the approximate level of demand for our products could
cause us to lose sales, expose us to increased inventory risks and subject us to increases in holding costs, risk of inventory obsolescence,
increases in markdown allowances and write-offs, any of which could have a material adverse effect on our business, financial condition
and results of operations.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
operate our business successfully and meet our customers&#8217; demands and expectations, we must maintain a certain level of finished
goods inventory to ensure immediate delivery when required. Furthermore, we are required to maintain an appropriate level of inventory
of parts and components for our production. However, forecasts are inherently uncertain. If our forecasted demand is lower than actual
demand, we may not be able to maintain an adequate inventory level of our finished goods or produce our products in a timely manner,
and we may lose sales and market share to our competitors. On the other hand, we may also be exposed to increased inventory risks due
to accumulated excess inventory of our products or raw materials, parts and components for our products. Excess inventory levels may
lead to increases in inventory holding costs, risks of inventory obsolescence and write-down.</span></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">&#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="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>

</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"><b><i>The
average selling prices of our cryptocurrency mining may decrease from time to time due to technological advancement and we may not be
able to pass onto our suppliers such decreases, which may in turn adversely affect our profitability.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
cryptocurrency mining industry is characterized by quick launches of new products, continuous technological advancements and changing
market trends and customer preferences, all of which translate to a shorter life cycle and a gradual decrease in the average selling
prices of products over time. There are no assurances that we will be able to pass on any decrease in average selling prices of our products
to our suppliers. In the event that average selling prices of our products unusually or significantly decrease, and such decreases cannot
be offset by a corresponding decrease in the prices of the principal components of our products, our gross profit margins may be materially
and adversely affected, which in turn, may adversely affect our profitability.</span></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">&#160;</span></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"><b><i>Shortages
in, or increases in the prices of, the components of our cryptocurrency mining machines may adversely affect our business.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
components used for cryptocurrency mining machines include printed circuit board, other electronic components, fans and aluminum casings.
The use of our Bitcoin mining machines also requires certain ancillary equipment and components such as controllers, power adaptors and
connectors. The production of our current cryptocurrency mining machines depends on obtaining adequate supplies of these components on
a timely basis and at competitive prices. We do not typically maintain large inventories of components, but rather we purchase them on
a just-in-time basis to satisfy our quality standards and meet our volume requirements. Given the long lead times that may be required
to manufacture, assemble and deliver certain components and products, problems could arise in planning production and managing inventory
levels that could seriously interrupt our operations, including the possibility of defective parts, an increase in component costs, delays
in delivery schedules, and shortages of components. Furthermore, we may have to turn to less reputable suppliers if we cannot source
adequate components from our regular supplier. Under such circumstances, the quality of the components may suffer and could cause performance
issues in our cryptocurrency mining machines.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shortages
of components could result in reduced production or delays in production, as well as an increase in production costs, which may negatively
affect our abilities to fulfill orders or make timely shipments to customers, as well as our customer relationships and profitability.
Component shortages may also increase our costs of revenue because we may be required to pay higher prices for components in short supply,
not being able to pass such costs to customers, and redesign or reconfigure products to accommodate substitute components.</span></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">&#160;</span></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"><b><i>Risks
that may be encountered during the transportation of cryptocurrency mining machines</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Physical
damage during shipping: cryptocurrency mining machines are delicate pieces of equipment that can be easily damaged during shipping. Factors
such as rough handling, temperature changes, and vibration can cause damage to the hardware.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Theft
or loss during shipping: cryptocurrency mining machines are valuable and can be a target for theft during shipping. In some cases, they
can also be misplaced or lost during the shipping process.</span></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">&#160;</span></p><div>

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

</div><!-- Field: Page; Sequence: 26; 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 -->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 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Improper
packaging: cryptocurrency mining machines require specialized packaging to ensure their safety during shipping. Failure to properly package
cryptocurrency mining machines can increase the risk of damage during transport.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inadequate
storage conditions: cryptocurrency mining machines require specific storage conditions, including temperature and humidity control, to
maintain their performance and lifespan. Failure to store cryptocurrency mining machines under optimal conditions can lead to hardware
failure and increased downtime.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fire
or water damage: Fire or water damage can be catastrophic to cryptocurrency mining machines and result in significant data loss. Proper
fire suppression systems and measures to prevent water damage should be in place to minimize these risks.</span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Risks
like cryptocurrency mining machines storage, overhaul, operation, and maintenance may occur:</i></b></span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equipment
failure: Machines that are not properly stored, overhauled, operated, or maintained can lead to equipment failure, which can be dangerous
for operators and other individuals nearby.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inadequate
training: Operators and maintenance personnel who are not properly trained may not know how to properly operate, maintain, or overhaul
machines, which can increase the risk of equipment failure or accidents.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Improper
storage: Machines that are not stored properly, such as in a location that is too hot, cold, humid, or dusty, can be damaged or degraded
over time, leading to equipment failure or decreased performance.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Poor
maintenance: Failure to properly maintain machines, such as by not performing regular inspections, cleaning, lubrication, or repairs,
can lead to equipment failure, decreased performance, or shortened machines lifespan.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lack
of safety protocols: Inadequate safety protocols, such as not using appropriate personal protective equipment or not following proper
lockout/tagout procedures, can increase the risk of accidents and injuries during machine operation or maintenance.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Improper
overhaul: Overhauling machines improperly, such as by not replacing worn or damaged parts or not properly reassembling the machines,
can lead to equipment failure or decreased performance.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aging
machines: Machines that are not regularly replaced or updated can become outdated or obsolete, increasing the risk of failure or decreased
performance.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Environmental
factors: Exposure to environmental factors, such as extreme heat or cold, moisture, or corrosive substances, can damage our machines
and lead to failure or decreased performance.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inadequate
inspections: Failure to perform regular inspections, such as non-destructive testing or visual inspections, can lead to failure or decreased
performance.</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Human
error: Human error during equipment storage, overhaul, operation, or maintenance, such as misreading instructions, using incorrect tools
or materials, or skipping steps in a procedure, can lead to failure or accidents.</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"></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 -->22<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>We
may need additional capital and we may not be able to obtain it, which could adversely affect our liquidity and financial position.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that our current cash and cash equivalents and cash flow from operations will be sufficient to meet our anticipated cash needs
including for working capital and capital expenditures, for the foreseeable future. We may, however, require additional cash resources
due to changed business conditions or other future developments. If these sources are insufficient to satisfy our cash requirements,
we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of convertible debt securities or additional
equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt
service obligations and could result in operating and financing covenants that would restrict our operations and liquidity.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">investors&#8217; perception
    of, and demand for, securities of alternative advertising media companies;</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">conditions of the U.S.
    and other capital markets in which we may seek to raise funds;</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our future results of operations,
    financial condition and cash flows;</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC governmental regulation
    of foreign investment in advertising services companies in China;</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">economic, political and
    other conditions in China; and</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC governmental policies
    relating to foreign currency borrowings.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional
funds on terms favorable to us could have a material adverse effect on our liquidity and financial condition.</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"></p><div>

</div><!-- Field: Page; Sequence: 28; 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 -->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 0; 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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
do not maintain any business liability disruption or litigation insurance coverage for our operations, and any business liability, disruption
or litigation we experience might result in our incurring substantial costs and the diversion of resources.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
business disruption insurance is available to a limited extent in China, we have determined that the risks of disruption, cost of such
insurance and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to
have such insurance. As a result, we do not have any business liability, disruption or litigation insurance coverage for our operations
of advertising and media business in China. Any business disruption or litigation may result in incurring substantial costs and the diversion
of our resources.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></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"><b><i>Any
negative publicity with respect to us in general or our partners may materially and adversely affect our reputation, business and results
of operations.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Complaints,
litigation, regulatory actions or other negative publicity that arise from the advertising industry in general or our company in particular,
including on the quality, effectiveness and reliability of privacy and security practices, and advertising content, even if inaccurate,
could adversely affect our reputation and client confidence in, and the use of, our solutions. Harm to our reputation and client confidence
can also arise for many other reasons, including employee misconduct, misconduct of our data and content distribution channel partners,
data center providers or other counterparties, failure by these persons or entities to meet minimum quality standards or otherwise fulfill
their contractual obligations or to comply with applicable laws and regulations. Additionally, negative publicity with respect to our
data or content distribution channel partners could also affect our business and results of operation to the extent that we rely on these
partners or if marketers or marketing agencies associate our company with such partners.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we fail to promote or maintain our brand in a cost-efficient manner, our business and results of operations may be harmed.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that developing and maintaining awareness of our brand in a cost-effective manner is critical to achieving widespread acceptance
of our platforms, and is an important element in attracting new clients and partners. Furthermore, we believe that the importance of
brand recognition will increase as competition in our market increases. Successful promotion of our brand will depend largely on our
ability to deliver value propositions to marketers and on the effectiveness of our marketing efforts. If we fail to successfully promote
and maintain our brand, or incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract
enough new clients or retain our existing clients, thus our business and results of operations can be materially and adversely affected.</span></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">&#160;</span></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"><b><i>We
may need additional capitals for our business and future sales of our ordinary shares could cause the market price of our ordinary shares
to decline.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sales
of a substantial number of shares of our ordinary shares in the public market, or the perception that these sales could occur, may
depress the market price for our ordinary shares. These sales could also impair our ability to raise additional capital through the
sale of our equity securities in the future. We may issue additional ordinary shares in the future and our shareholders may elect to
sell large numbers of shares held by them from time to time. Our amended and restated memorandum and articles of association
authorize us to issue up to 300,000,000 ordinary shares.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2021, we filed with the SEC prospectus to issue and sell, in an at-the-market (&#8220;ATM&#8221;) offering through
A.G.P./Alliance Global Partners, ordinary shares having an aggregate offering price of up to $30 million. &#160;From March 22, 2021
through May 14, 2021, we issued and sold 1,626,327 ordinary shares through the ATM offering for net proceeds of approximately $5.1
million, and we issued and sold 56,800 ordinary shares through the ATM offering for net proceeds of approximately $0.1 million in
fiscal year 2022. The ATM offering was terminated by us on Feb 13, 2023. On February 22, 2022, an aggregate of 17,138,305 Ordinary
Shares was issued upon the closing of the First SmartConn Acquisition. On April 20, 2022, Powerbridge Zhuhai entered into an equity
purchase agreement with the Shenzhen Chenbao Information Service Co., Ltd. (&#8220;Chenbao&#8221;), pursuant to which the Company
agrees to acquire 5% equity interests (the &#8220;Acquired Interests&#8221;) of the outstanding equity interests of Chenbao for an
aggregate purchase price of US$2.35 million, which shall be paid as follows: (i) US$0.47 million in cash; and (ii) 5,756,481 shares
of the Company. On September 1, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC,
pursuant to which the Company issued Streeterville Capital, LLC an unsecured convertible promissory note on September 1, 2022 in the
original principal amount of $8,640,000, convertible into ordinary shares, $0.00166667 par value per share, of the Company. On
September 1, 2022, the Company entered into a share purchase agreement (the &#8220;White Lion Agreement&#8221;) with White Lion
Capital LLC, a Nevada limited liability company, which provides that, upon the terms and subject to the conditions and limitations
set forth therein, White Lion Capital is committed to purchase our ordinary shares, $0.00166667 par value per share, with an
aggregate offering price of up to $15,000,000. On September 9, 2022, the Company entered into a Standby Equity Purchase Agreement
(the &#8220;Standby Agreement&#8221;) with YA II PN, Ltd. Pursuant to the Standby Agreement, the Company will be able to issue and
sell up to $30,000,000 of its ordinary shares, par value of US$ 0.00166667 per share, at the Company&#8217;s sole option, any time
during the three-year period following the execution date of the Standby Agreement subject to certain limitations. On December 16,
2022, the Company entered into an equity transfer agreement (the &#8220;Second Boxinrui Acquisition&#8221;) with 14 shareholders of
Boxinrui in which the Company agreed to purchase 20% of the equity interest of Boxinrui for the aggregated total consideration of
RMB48,206,973, which shall be settled by 55,300,530 newly issued ordinary shares of the Company. On January 5, 2023, the Company
entered into the Second SmartConn Acquisition share transfer agreement, the consideration of which will be paid in the form of
114,899,222 newly issued shares of the Company. We may issue more ordinary shares through the ATM offering in the future and,
therefore, it may cause the market price of our ordinary shares to decline. See &#8220;Item 3. Key Information&#8212;D. Risk
Factors&#8212; We may need additional capitals for our business and future sales of our ordinary shares could cause the market price
of our ordinary shares to decline.&#8221;, &#8220;Item 4. Information on the Company&#8212;C. History and Development of the
Company.&#8221; and &#8220;Item 5. Operating and Financial Review and Prospects &#8212; Recent developments.&#8221;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Corporate Structure</b></span></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; font-size: 10pt">&#160;</span></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"><b><i>We
are a Cayman Islands company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands
law than under U.S. law, shareholders may have less protection for their shareholder rights than they would under U.S. law.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
corporate affairs are governed by our Fourth Amended and Restated Memorandum and Articles of Association, the Cayman Islands Companies Act (Revised) (the &#8220;Companies Act&#8221;) and the common law of the Cayman Islands. The rights of shareholders to take action against
the directors, actions by minority shareholders and the fiduciary 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 that from English common law, which has persuasive, but not binding, authority
on a court in 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 precedent in some jurisdictions in the United States.
In particular, the Cayman Islands has a different body of securities laws than the United States. In addition, some U.S. states, such
as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. There is no statutory
recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain
circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken
by management or members of the board of directors (&#8220;<b>Board</b>&#8221;) than they would as shareholders of a U.S. public company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></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"><b><i>Judgments
obtained against us by our shareholders may not be enforceable.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a Cayman Islands company and all of our assets are located outside of the United States. Our current operations are based in China.
In addition, the majority of our current directors and executive officers are nationals and residents of countries other than the United
States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible
for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights
have been infringed under the United States federal securities laws or otherwise. Even if you are successful in bringing an action of
this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of
our directors and officers.</span></p><div>

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</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"><b><i>We
may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
determination of our status as a foreign private issuer is made annually on the last business day of our most recently completed second
fiscal quarter and, accordingly, the next determination will be made with respect to us on or after June 30, 2023. We would lose our
foreign private issuer status if (1) a majority of our outstanding voting securities are directly or indirectly held of record by U.S.
residents; and (2) a majority of our shareholders or a majority of our Directors or management are U.S. citizens or residents, a majority
of our assets are located in the United States, or our business is administered principally in the United States. If we were to lose
our foreign private issuer status, the regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may
be significantly higher. We may also be required to modify certain of our policies to comply with corporate governance practices associated
with U.S. domestic issuers, which would involve additional costs.</span></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">&#160;</span></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><i>Our
disclosure controls and procedures may not prevent or detect all errors or acts of fraud.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file
or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that any disclosure controls and procedures, or internal controls and procedures, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the control system are met.</span></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>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of
simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more
people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements
due to error or fraud may occur and not be detected, which&#160;would likely cause investors to lose confidence in our reported financial
information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading
price of our Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of
fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations
and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.</span></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; font-size: 10pt">&#160;</span></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"><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></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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,
including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
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 and due to a transition period established by rules of
the SEC for newly public companies, we are not required to include a report of management&#8217;s assessment regarding internal control
over financial reporting in this annual report. 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. The material weakness identified consisted of (i) a lack of accounting staff
and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements; (ii) a lack of sufficient documented
financial closing policies and procedures, specifically those related to period-end expenses cut-off and accruals; (iii) inadequate controls
with respect to the maintenance of sufficient documentation for, and the evaluation of the accounting implications of, significant and
non-routine payment transactions; and (iv) a lack of sufficient documented financial closing policies and procedures, specifically those
related to period-end expenses cut-off and accruals, as defined in the standards established by the Public Company Accounting Oversight
Board of the United States.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have already taken some steps and have continued to implement measures to remediate the material weakness identified, including but not
limited to providing trainings to staff, changing to a new and well-established accounting system, and continuing to monitor the internal
control over financial reporting. However, we cannot assure you that we will not identify additional material weaknesses or significant
deficiencies in the future.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
to the material weakness in our internal controls over financial reporting, we conclude that our internal controls over financial reporting
are ineffective and therefore 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, the Ordinary Shares may not be able to remain listed on the NASDAQ Capital Market.</span></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">&#160;&#160;&#160;</span></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><i>We
will likely not pay dividends in the foreseeable future.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividend
policy is subject to the discretion of our Board and will depend on, among other things, our earnings, financial condition, capital requirements
and other factors. We have never declared a dividend. There is no assurance that our Board will declare dividends even if we are profitable.
The payment of dividends by entities organized in China is subject to limitations as described herein. Under Cayman Islands law, we may
only pay dividends from profits of the Company, or credits standing in the Company&#8217;s share premium account, and we must be solvent
before and after the dividend payment in the sense that we will be able to satisfy our liabilities as they become due in the ordinary
course of business; and the realizable value of assets of our Company will not be less than the sum of our total liabilities, other than
deferred taxes as shown on our books of account, and our capital. Pursuant to the Chinese enterprise income tax law, dividends payable
by a foreign investment entity to its foreign investors are subject to a withholding tax of 10%. Similarly, dividends payable by a foreign
investment entity to its Hong Kong investor who owns 25% or more of the equity of the foreign investment entity is subject to a withholding
tax of 5%. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations
in China currently permit payment of dividends only out of accumulated profits as determined in accordance with the accounting standards
and regulations in China. The transfer to this reserve must be made before distribution of any dividends to shareholders.</span></p><div>

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</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"><b><i>Our
business may be materially and adversely affected if our Chinese subsidiary declare bankruptcy or become subject to a dissolution or
liquidation proceeding.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Enterprise Bankruptcy Law of China provides that an enterprise may be liquidated if the enterprise fails to settle its debts as and when
they fall due and if the enterprise&#8217;s assets are, or are demonstrably, insufficient to clear such debts. Our Chinese subsidiaries
hold certain assets that are important to our business operations. If any of our Chinese subsidiary undergo a voluntary or involuntary
liquidation proceeding, unrelated 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.</span></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"><b><i>&#160;</i></b></span></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"><b><i>As
an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate
governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protections to shareholders
than they would enjoy if we complied fully with such corporate governance listing standards.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq listing standards. However, the Nasdaq
Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Currently,
we rely on home country practice with respect to certain aspects of our corporate governance. See &#8220;Item 16G. Corporate Governance.&#8221;
Our shareholders may be afforded less protections than they would otherwise enjoy under the Nasdaq listing standards applicable to U.S.
domestic issuers given our reliance on the home country practice exception.&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Ordinary Shares </b></span></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"><b><i>&#160;</i></b></span></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"><b><i>Our
Ordinary Shares may be delisted from the Nasdaq Capital Market as a result of our failure of meeting the Nasdaq Capital Market continued
listing requirements.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Ordinary Shares are currently listed on the Nasdaq Capital Market under the symbol &#8220;PBTS.&#8221; We must continue to meet the requirements
set forth in Nasdaq Listing Rule 5550 to remain listing on the Nasdaq Capital Market. On November 7, 2022, the Company received a written
notification from Nasdaq&#8217;s Listing Qualifications Staff of The NASDAQ Stock Market LLC (&#8220;Nasdaq&#8221;) notifying the Company
that the minimum bid price per share for its common shares has been below $1.00 for a period of 30 consecutive business days and the
Company therefore no longer meets the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) (the &#8220;Deficiency&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Nasdaq Listing Rules, the Company had until May 8, 2023 to regain compliance, and may be eligible for an extension of an additional
180 calendar days, provided that the Company meets the continued listing requirement for market value of publicly held shares and all
other initial listing standards for Nasdaq except for Nasdaq Listing Rule 5550(a)(2), and provide a written notice of its intention to
cure this Deficiency during the second compliance period, by effecting a reverse stock split, if necessary.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company fails to regain compliance with the Price-based Requirements or any other listing rules when required in the future, we could
be subject to suspension and delisting proceedings. There can be no assurance that our Shares will be eligible for trading on any such
alternative exchanges or markets in the United States. If Nasdaq determines to delist our ordinary shares, or if we fail to list our
Shares on other stock exchanges or find alternative trading venue for our Shares, the market liquidity and the price of our Shares and
our ability to obtain financing for our operations could be materially and adversely affected.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
issuance of new shares and convertible note had a dilutive effect on our existing shareholders and may adversely impact the market price
of our Ordinary Shares.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may from time to time issue additional Ordinary Shares or securities convertible into our Ordinary Shares, including in future financings
that we may undertake. For example, on January 6, 2022, the Company entered into an equity transfer agreement with the shareholder of
SmartConn Co., Limited (&#8220;<b>SmartConn</b>&#8221;), pursuant to which the Company agreed to purchase 19.99% equity of SmartConn
at 90% of the appraisal price, which was settled by an aggregate of 17,138,305 newly issued Ordinary Shares. The transaction was closed
on February 22, 2022.&#160;</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further,
pursuant to an equity purchase agreement with the Shenzhen Chenbao Information Service Co., Ltd. (&#8220;Chenbao&#8221;) dated April
20, 2022, the Company agrees to purchase 5% equity interests of Chenbao for a consideration of RMB15,000,000 million, which was settled
by the combination of cash of RMB3,000,000 and 5,756,481 newly issued Ordinary Shares. The transaction was closed on August 24, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, under the terms of an equity transfer agreement with eight individual shareholders of Boxinrui International Holdings Limited
(&#8220;Boxinrui&#8221;) dated June 24, 2022, the Company issued to them an aggregate of 19,942,553 Ordinary Shares as a consideration
for acquiring 15% equity of Boxinrui. The transaction was closed on June 28, 2022.</span></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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 1, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, a Utah limited liability
company, pursuant to which the Company issued Streeterville Capital, LLC an unsecured convertible promissory note on September 1, 2022
in the original principal amount of $8,640,000, convertible into ordinary shares, $0.00166667 par value per share, of the Company. As
of December 31, 2022, an aggregate of 13,981,758 Ordinary Shares has been converted into Ordinary Shares at conversion price of eighty-five
percent (85%) multiplied by the average of the two (2) lowest daily VWAPs during the ten (10) Trading Day period immediately preceding
the applicable measurement date. If our Ordinary Shares are issued in connection with the conversion of the note, our shareholders may
experience dilution and, as a result, our stock price may decline.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 9, 2022, the Company entered into a Standby Equity Purchase Agreement (the &#8220;Standby Agreement&#8221;) with YA II PN,
Ltd. Pursuant to the Standby Agreement, the Company will be able to issue and sell up to $30,000,000 of its ordinary shares, at the Company&#8217;s
sole option, any time during the three-year period following the execution date of the Standby Agreement subject to certain limitations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 27, 2022, the Company entered into an equity transfer agreement with DTI GROUP LIMITED (&#8220;DTI&#8221;) to which the Company
agreed to purchase 19% of the equity interest of DTI for a consideration of RMB57,435,100, which was settled by 55,506,750 newly issued
Ordinary Shares. The acquisition was closed on November 1, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 16, 2022, the Company entered into an equity transfer agreement (the &#8220;Second Boxinrui Acquisition&#8221;) with 14 shareholders
of Boxinrui in which the Company agreed to purchase 20% of the equity interest of Boxinrui for the aggregated total consideration of
RMB48,206,973, which shall be settled by 55,300,530 newly issued ordinary shares of the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
to these issuances and any future additional issuances of shares of our Ordinary shares or securities convertible into Ordinary Shares,
including pursuant to our shelf registration statement or our ATM facility, our shareholders may experience immediate dilution and, as
a result, our stock price may decline. See &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8212; We may need additional capitals
for our business and future sales of our ordinary shares could cause the market price of our ordinary shares to decline.&#8221;, &#8220;Item
4. Information on the Company&#8212;C. History and Development of the Company.&#8221; and &#8220;Item 5. Operating and Financial Review
and Prospects &#8212; Recent developments.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Doing Business in China </b></span></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; font-size: 10pt">&#160;</span></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"><b><i>The
Chinese government exerts substantial influence over the manner in which we must conduct our business activities</i>.&#160;<i>We are
currently not required to obtain approval from Chinese authorities to issue securities to foreign investors, however, if our subsidiaries
or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on
U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors.</i></b></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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through
regulation and state ownership. Under the current government leadership, the government of the PRC has been pursuing reform policies
which have adversely affected China-based operating companies whose securities are listed in the United States, with significant policies
changes being made from time to time without notice. There are substantial uncertainties regarding the interpretation and application
of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement and performance
of our contractual arrangements with borrowers in the event of the imposition of statutory liens, death, bankruptcy or criminal proceedings.
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.</span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Given
recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted
overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability
to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.</span></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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recently,
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, (the &#8220;Opinions&#8221;), which was 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. Effective measures, such as promoting the construction
of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas listed companies. As of
the date of this Annual Report, we have not received any inquiry, notice, warning, or sanctions from PRC government authorities in connection
with the Opinions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 10, 2021, the Standing Committee of the National People&#8217;s Congress of China (the &#8220;SCNPC&#8221;), promulgated the PRC
Data Security Law, which took effect in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities
and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance
of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate
rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used.
The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security
and imposes export restrictions on certain data an information.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
early July 2021, regulatory authorities in China launched cybersecurity investigations with regard to several China-based companies that
are listed in the United States. The Chinese cybersecurity regulator announced on July 2, 2021 that it had begun an investigation of
Didi Global Inc. (NYSE: DIDI) and two days later ordered that the company&#8217;s app be removed from smartphone app stores. On July
5, 2021, the Chinese cybersecurity regulator launched the same investigation on two other Internet platforms, China&#8217;s Full Truck
Alliance of Full Truck Alliance Co. Ltd. (NYSE: YMM) and KANZHUN LIMITED (Nasdaq: BZ). On July 24, 2021, the General Office of the Communist
Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden
of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education, pursuant to which foreign investment
in such firms via mergers and acquisitions, franchise development, and variable interest entities are banned from this sector.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure
(the &#8220;Regulations&#8221;), which took effect on September 1, 2021. The Regulations supplemented and specified the provisions on
the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others,
that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time
after the identification of certain critical information infrastructure.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC (the &#8220;Personal Information Protection
Law&#8221;), which took effect in November 2021. As the first systematic and comprehensive law specifically for the protection of personal
information in the PRC, the Personal Information Protection Law provides, among others, that (i) an individual&#8217;s consent shall
be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking; (ii) personal
information operators using sensitive personal information shall notify individuals of the necessity of such use and impact on the individual&#8217;s
rights; and (iii) where personal information operators reject an individual&#8217;s request to exercise his or her rights, the individual
may file a lawsuit with a People&#8217;s Court.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
such, the Company&#8217;s business segments may be subject to various government and regulatory interference in the provinces in which
they operate. The Company could be subject to regulations 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 the existing and newly adopted
laws and regulations or penalties for any failure to comply. Additionally, the governmental and regulatory interference could significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to
significantly decline or be worthless.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
it is uncertain when and whether the Company will be required to obtain permission from the PRC government to continue to be listed on
U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company
is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not
received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or
future laws and regulations relating to its business or industry.</span></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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 24, 2021, the CSRC, together with other relevant government authorities in China issued the Provisions of the State Council
on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), and the Measures for the
Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (&#8220;Draft Overseas Listing Regulations&#8221;).
The Draft Overseas Listing Regulations requires that a PRC domestic enterprise seeking to issue and list its shares overseas (&#8220;Overseas
Issuance and Listing&#8221;) shall complete the filing procedures of and submit the relevant information to CSRC. The Overseas Issuance
and Listing includes direct and indirect issuance and listing. Where an enterprise whose principal business activities are conducted
in PRC seeks to issue and list its shares in the name of an overseas enterprise (&#8220;Overseas Issuer&#8221;) on the basis of the equity,
assets, income or other similar rights and interests of the relevant PRC domestic enterprise, such activities shall be deemed an indirect
overseas issuance and listing (&#8220;Indirect Overseas Issuance and Listing&#8221;) under the Draft Overseas Listing Regulations. Therefore,
the proposed listing would be deemed an Indirect Overseas Issuance and Listing under the Draft Overseas Listing Regulations. As such,
the Company would be required to complete the filing procedures of and submit the relevant information to CSRC after the Draft Overseas
Listing Regulations become effective.&#160;&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, on December 28, 2021, the CAC, the National Development and Reform Commission (&#8220;NDRC&#8221;), and several other administrations
jointly issued the revised Measures for Cybersecurity Review (the &#8220;Revised Review Measures&#8221;), which became effective and
replaced the Measures for Cybersecurity Review on February 15, 2022. According to the Revised Review Measures, if an &#8220;online platform
operator&#8221; that is in possession of personal data of more than one million users intends to list in a foreign country, it must apply
for a cybersecurity review. Based on a set of Q&amp;A published on the official website of the State Cipher Code Administration in connection
with the issuance of the Revised Review Measures, an official of the said administration indicated that an online platform operator should
apply for a cybersecurity review prior to the submission of its listing application with non-PRC securities regulators. Given the recency
of the issuance of the Revised Review Measures and their pending effectiveness, there is a general lack of guidance and substantial uncertainties
exist with respect to their interpretation and implementation. For example, it is unclear whether the requirement of cybersecurity review
applies to follow-on offerings by an &#8220;online platform operator&#8221; that is in possession of personal data of more than one million
users where the offshore holding company of such operator is already listed overseas. Furthermore, the CAC released the draft of the
Regulations on Network Data Security Management in November 2021 for public consultation, which among other things, stipulates that a
data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider
and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the
following year.&#160;If the draft Regulations on Network Data Security Management are enacted in the current form, we, as an overseas
listed company, will be required to carry out an annual data security review and comply with the relevant reporting obligations.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals,
including on a retrospective basis, from the CSRC, the CAC or other PRC authorities, as well as regarding any annual data security review
or other procedures that may be imposed on us. If any approval, review or other procedure is in fact required, we are not able to guarantee
that we will obtain such approval or complete such review or other procedure timely or at all. For any approval that we may be able to
obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and offerings relating
to our securities.&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 8.35pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>Adverse
changes in political, economic and other policies of the Chinese government could have a material adverse effect on the overall economic
growth of China, which could materially and adversely affect the growth of our business and our competitive position.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
all of our business operations are conducted in China. Accordingly, our business, financial condition, results of operations and prospects
are affected significantly by economic, political and legal developments in China. Although the PRC economy has been transitioning from
a planned economy to a more market-oriented economy since the late 1970s, the PRC government continues to exercise significant control
over China&#8217;s economic growth through direct allocation of resources, monetary and tax policies, and a host of other government
policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between
the Renminbi and foreign currencies, and regulate the growth of the general or specific market. While the Chinese economy has experienced
significant growth in the past 30&#160;years, growth has been uneven, both geographically and among various sectors of the economy. Furthermore,
the current global economic crisis is adversely affecting economies throughout the world. As the PRC economy has become increasingly
linked with the global economy, China is affected in various respects by downturns and recessions of major economies around the world.
The various economic and policy measures enacted by the PRC government to forestall economic downturns or bolster China&#8217;s economic
growth could materially affect our business. Any adverse changes in the economic conditions in China, in policies of the PRC government
or in laws and regulations in China could have a material adverse effect on the overall economic growth of China and market demand for
our outsourcing services. Such developments could adversely affect our businesses, lead to reduction in demand for our services and adversely
affect our competitive position.</span></p><div>

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</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>

</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"><b><i>Uncertainties
with respect to the PRC legal system could have a material adverse effect on us. </i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC legal system is based on written statutes. Unlike under common law systems, decided legal cases have little value as precedents in
subsequent legal proceedings. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing
economic matters in general and forms of foreign investment (including in respect of wholly foreign owned enterprises) in particular.
These laws, regulations and legal requirements are relatively new and are often changing, and their interpretation and enforcement depend
to a large extent on relevant government policy and involve significant uncertainties that could limit the reliability of the legal protections
available to us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.45in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas
and foreign investment in China-based issuers. In addition, the enforcement of laws and regulations in China can change quickly with
little advance notice. In 2021, 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, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts
in anti-monopoly enforcement. We do not expect to be subject to cybersecurity review with the Cyberspace Administration of China (&#8220;CAC&#8221;)
if the draft Measures for Cybersecurity Censorship become effective as they are published, since: (i) our products and services are offered
not directly to individual consumers; (ii) we do not possess a large amount of personal information in our business operations; and (iii)
data processed in our business does not have a bearing on national security and thus may not be classified as core or important data
by the authorities. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative
regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will
be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business
operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.45in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
cannot predict the effects of future developments in government policy or the PRC legal system in general. We may be required in the
future to procure additional permits, authorizations and approvals for our existing and future operations, which may not be obtainable
in a timely fashion or at all, or may involve substantial costs and unforeseen risks. An inability to obtain, or the incurrence of substantial
costs in obtaining, such permits, authorizations and approvals may have a material adverse effect on our business, financial condition
and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.45in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may be adversely affected by the complexity and uncertainties of and changes in PRC regulation of Internet business and related companies.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.45in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC government extensively regulates the Internet industry, including with respect to foreign ownership of and licensing and permit requirements
pertaining to companies in the Internet industry. These Internet-related laws and regulations are relatively new and evolving and their
interpretation and enforcement involve significant uncertainties. As a result, in certain circumstances, it may be difficult to determine
what actions or omissions may be deemed to be in violation of the applicable laws and regulations. Issues, risks and uncertainties relating
to PRC regulation of Internet businesses include, but are not limited to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.45in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">there are uncertainties
    relating to the regulation of Internet businesses in China, including evolving licensing practices. This means that permits, licenses
    or operations at some of our companies may be subject to challenge, or we may fail to obtain permits or licenses that may be deemed
    necessary for our operations, or we may not be able to obtain or renew certain permits or licenses.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify; text-indent: -16.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the evolving PRC regulatory
    system for the Internet industry may lead to the establishment of new regulatory agencies. For example, the Cyberspace Administration
    of China was established in 2014, as the central Internet censorship, oversight and control agency for the PRC. Further, new laws,
    regulations or policies may be promulgated or announced that will regulate Internet activities, including the online video and online
    advertising businesses. If these new laws, regulations or policies are promulgated, additional licenses may be required for our operations.
    If our operations do not comply with these new regulations after they become effective, or if we fail to obtain any licenses required
    under these new laws and regulations, we could be subject to penalties.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.45in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.45in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
interpretation and application of the existing PRC laws, regulations, policies and possible new laws, regulations or policies relating
to the Internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in
and the businesses and activities of,&#160;Internet businesses in China, including our business. We cannot assure you that we have obtained
all the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain
any new licenses required under any new laws or regulations. There are also risks that we may be found to violate the existing or future
laws and regulations given the uncertainty and complexity of China&#8217;s regulation of Internet business.</span></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"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>U.S.
regulators&#8217; ability to conduct investigations or enforce rules in China is limited. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
all of our operations conducted outside of the U.S. As a result, it may not be possible for the U.S. regulators to conduct investigations
or inspections, or to effect service of process within the U.S. or elsewhere outside China on us, our subsidiaries, officers, directors
and shareholders, and others, including with respect to matters arising under U.S. federal or state securities laws. China does not have
treaties providing for reciprocal recognition and enforcement of judgments of courts with the U.S. and many other countries. As a result,
recognition and enforcement in China of these judgments in relation to any matter, including U.S. securities laws and the laws of the
Cayman Islands, may be difficult or impossible.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
face uncertainty regarding the PRC tax reporting obligations and consequences for certain indirect transfers of the stock of our operating
company.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises issued by
the PRC State Administration of Taxation on December&#160;10, 2009, or Circular 698, where a foreign investor transfers the equity interests
of a PRC resident enterprise indirectly by way of the sale of equity interests of an overseas holding company, or an Indirect Transfer,
and such overseas holding company is located in a tax jurisdiction that: (i)&#160;has an effective tax rate less than 12.5%; or (ii)&#160;does
not tax foreign income of its residents, the foreign investor should report such Indirect Transfer to the competent tax authority of
the PRC resident enterprise. The PRC tax authority will examine the true nature of the Indirect Transfer, and if the tax authority considers
that the foreign investor has adopted an abusive arrangement in order to avoid PRC tax, they will disregard the existence of the overseas
holding company and re-characterize the Indirect Transfer and as a result, gains derived from such Indirect Transfer may be subject to
PRC withholding tax at the rate of up to 10%. In addition, the PRC resident enterprise is supposed to provide necessary assistance to
support the enforcement of Circular 698. At present, the PRC tax authorities will neither confirm nor deny&#160;that they&#160;would
enforce Circular 698, in conjunction with other tax collection and tax withholding rules, to make claims against our PRC subsidiary as
being&#160;indirectly liable&#160;for&#160;unpaid taxes, if any,&#160;arising from Indirect Transfers by shareholders who did not obtain
their shares in the IPO of our shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 3, 2015, the PRC State Administration of Taxation issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect
Transfer of Properties by Non-Tax Resident Enterprises, or SAT Public Notice 7. SAT Public Notice 7 supersedes the rules with respect
to the Indirect Transfer under SAT Circular 698, but does not touch upon the other provisions of SAT Circular 698, which remain in force.
SAT Public Notice 7 has introduced a new tax regime that is significantly different from the previous one under SAT Circular 698. SAT
Public Notice 7 extends its tax jurisdiction to not only Indirect Transfers set forth under SAT Circular 698 but also transactions involving
transfer of other taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Public Notice
7 provides clearer criteria than SAT Circular 698 for assessment of reasonable commercial purposes and has introduced safe harbors for
internal group restructurings and the purchase and sale of equity through a public securities market. SAT Public Notice 7 also brings
challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets. Where
a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which
is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable
assets, may report such Indirect Transfer to the relevant tax authority. 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. Both the transferor and the transferee
may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved,
such as offshore restructuring, sale of the shares in our offshore subsidiaries or investments. Our Company may be subject to filing
obligations or taxations if our Company is transferor in such transactions, and may be subject to withholding obligations if our Company
is transferee in such transactions, under SAT Circular 698 and SAT Public Notice 7. For transfer of shares in our Company by investors
that are non-PRC resident enterprises, our PRC subsidiary may be requested to assist in the filing under SAT Circular 698 and SAT Public
Notice 7. As a result, we may be required to expend valuable resources to comply with SAT Circular 698 and SAT Public Notice 7 or to
request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our Company
should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders
to personal liability and limit our ability to acquire PRC companies or to inject capital into our PRC subsidiary, limit our PRC subsidiary
ability to distribute profits to us, or otherwise materially and adversely affect us.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2014, China&#8217;s State Administration of Foreign Exchange (&#8220;SAFE&#8221;) has promulgated the Circular on Relevant Issues
Concerning Foreign Exchange Control on Domestic Residents&#8217; Offshore Investment and Financing and Roundtrip Investment Through Special
Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic
Residents&#8217; Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be
effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate
entities) to register with local branches of SAFE in connection with their direct or indirect offshore investment activities. SAFE Circular
37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments
in offshore special purpose vehicles, or SPVs, will be required to register such investments with the SAFE or its local branches. In
addition, any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its filed registration with the local
branch of SAFE with respect to that SPV, to reflect any material changes. Moreover, any subsidiaries of such SPV in China is required
to urge the PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder of such SPV
fails to make the required registration or to update the previously filed registration, the subsidiaries of such SPV in China may be
prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the
SPV may also be prohibited from making additional capital contribution into its subsidiary in China. On February 28, 2015, the SAFE promulgated
a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became
effective on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investment
and outbound overseas direct investment, including those required under the SAFE Circular 37, will be filed with qualified banks instead
of the SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of the SAFE.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Ban Lor and Stewart Lor are not PRC resident, thus, they are not subject to SAFE Circular 37. We have informed our shareholders that
we know are PRC residents and hold direct or indirect interests in us to make the necessary applications, filings and amendments as required
under SAFE Circular 37 and other related rules. However, we may not at all times be fully aware or informed of the identities of all
our beneficial owners who are PRC residents, and we may not always be able to compel our beneficial owners to comply with the SAFE Circular
37 requirements. As a result, we cannot assure you that all of our shareholders or beneficial owners who are PRC residents will at all
times comply with, or in the future make or obtain any applicable registrations or approvals required by, SAFE Circular 37 or other related
regulations. Failure by any such shareholders or beneficial owners to comply with SAFE Circular 37 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 or affect our ownership structure, which could adversely affect our business and prospects.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
as these foreign exchange regulations are still relatively new and their interpretation and implementation has been constantly evolving,
it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted,
amended and implemented by the relevant governmental authorities. For example, we may be subject to a more stringent review and approval
process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings,
which may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company,
we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete
the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our
acquisition strategy and could adversely affect our business and prospects.</span></p><div>

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</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"><b><i>PRC
regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds
of the offerings to make loans or 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></span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
utilizing the proceeds from the offerings or any future offerings, as an offshore holding company of our PRC subsidiary, we may make
loans to our PRC subsidiary and controlled PRC affiliate, or we may make additional capital contributions to our PRC subsidiary. Any
loans to our PRC subsidiary or controlled PRC affiliate are subject to PRC regulations and approvals. For example, loans by us to our
PRC subsidiary in China, each of which is a foreign-invested enterprise, to finance their activities cannot exceed the statutory limits
and must be registered with SAFE or its local counterpart.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may also decide to finance our PRC subsidiary through capital contributions. These capital contributions must be approved by the Ministry
of Commerce in China or its local counterpart. We cannot assure you that we will be able to obtain these government registrations or
approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiary or controlled PRC affiliate or capital
contributions by us to our subsidiaries or any of their respective subsidiaries. If we fail to receive such registrations or approvals,
our ability to use the proceeds of the IPO and to capitalize our PRC operations may be negatively affected, which could adversely and
materially affect our liquidity and our ability to fund and expand our business.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2015, SAFE promulgated Circular 19, a notice regulating the conversion by a foreign-invested enterprise of foreign currency into Renminbi
by restricting how the converted Renminbi may be used. Circular 19 requires that Renminbi converted from the foreign currency-denominated
capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable governmental
authority and may not be used for equity investments within the PRC unless specifically provided for otherwise in its business scope.
In addition, SAFE strengthened its oversight of the flow and use of Renminbi funds converted from the foreign currency-denominated capital
of a foreign-invested enterprise. The use of such Renminbi may not be changed without approval from SAFE and may not be used to repay
Renminbi loans if the proceeds of such loans have not yet been used for purposes within the foreign-invested enterprise&#8217;s approved
business scope.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 by us to our PRC subsidiary or controlled PRC affiliate or with respect to
future capital contributions by us to our PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability
to use the proceeds we receive from the offerings and to capitalize or otherwise fund our PRC operations may be negatively affected,
which could adversely and materially affect our liquidity and our ability to fund and expand our business.</span></p><div>

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</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"><b><i>Governmental
control of currency conversion may limit our ability to use our revenues effectively and the ability of our PRC subsidiary to obtain
financing.</i></b></span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC government imposes control on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency
out of China. We receive a majority of our revenues in Renminbi, which currently is not a freely convertible currency. Restrictions on
currency conversion imposed by the PRC government may limit our ability to use revenues generated in Renminbi to fund our expenditures
denominated in foreign currencies or our business activities outside China. Under China&#8217;s existing foreign exchange regulations,
Renminbi may be freely converted into foreign currency for payments relating to current account transactions, which include among other
things dividend payments and payments for the import of goods and services, by complying with certain procedural requirements. Our PRC
subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, by complying with certain procedural
requirements. Our PRC subsidiary may also retain foreign currency in their respective current account bank accounts for use in payment
of international current account transactions. However, we cannot assure you that the PRC government will not take measures in the future
to restrict access to foreign currencies for current account transactions.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Conversion
of Renminbi into foreign currencies, and of foreign currencies into Renminbi, for payments relating to capital account transactions,
which principally includes investments and loans, generally requires the approval of SAFE and other relevant PRC governmental authorities.
Restrictions on the convertibility of the Renminbi for capital account transactions could affect the ability of our PRC subsidiary to
make investments overseas or to obtain foreign currency through debt or equity financing, including by means of loans or capital contributions
from us.</span></p><div>

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</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"><b><i>We
may be classified as a &#8220;resident enterprise&#8221; for PRC enterprise income tax purposes; such classification could result in
unfavorable tax consequences to us and our non-PRC shareholders.</i></b></span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Enterprise Income Tax Law provides that enterprises established outside of China whose &#8220;de facto management bodies&#8221; are located
in China are considered PRC tax resident enterprises and will generally be subject to the uniform 25% PRC enterprise income tax rate
on their global income. In addition, a tax circular issued by the State Administration of Taxation on April&#160;22, 2009 regarding the
standards used to classify certain Chinese-invested enterprises established outside of China as resident enterprises clarified that dividends
and other income paid by such resident enterprises will be considered to be PRC source income, subject to PRC withholding tax, currently
at a rate of 10%, when recognized by non-PRC enterprise shareholders. This recent circular also subjects such resident enterprises to
various reporting requirements with the PRC tax authorities. Under the implementation rules to the Enterprise Income Tax Law, 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 other assets of an enterprise. In addition, the tax circular mentioned above details that
certain Chinese-invested enterprises will be classified as resident enterprises if the following are located or resident in China: senior
management personnel and departments that are responsible for daily production, operation and management; financial and personnel decision
making bodies; key properties, accounting books, company seal, and minutes of board meetings and shareholders&#8217; meetings; and half
or more of the senior management or directors having voting rights.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
there are no detailed rules or precedents governing the procedures and specific criteria for determining de facto management bodies which
are applicable to our company or our overseas subsidiaries. We do not believe that Powerbridge meets all of the conditions required for
PRC resident enterprise. The Company is a company incorporated outside the PRC. As a holding company, its key assets are its ownership
interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its Board and the resolutions
of its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities outside of China are not PRC
resident enterprises either. 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;. There can be no assurance
that the PRC government will ultimately take a view that is consistent with ours.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
if the PRC tax authorities determine that Powerbridge is a PRC resident enterprise for enterprise income tax purposes, we may be required
to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. Such 10% tax rate could
be reduced by applicable tax treaties or similar arrangements between China and the jurisdiction of our shareholders. For example, for
shareholders eligible for the benefits of the tax treaty between China and Hong Kong, the tax rate is reduced to 5% for dividends if
relevant conditions are met. In addition, non-resident enterprise shareholders may be subject to a 10% PRC tax on gains realized on the
sale or other disposition of ordinary shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC
individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the
event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends or gains, it would generally
apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC
shareholders of the 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 the Company is treated as a PRC resident enterprise.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provided
that our Cayman Islands holding company, Powerbridge, is not deemed to be a PRC resident enterprise, our shareholders who are not PRC
residents will not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of
our shares. However, under Circular 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. As a result, gains derived from such indirect transfer may be
subject to PRC enterprise income tax, and the transferee would be obligated to withhold the applicable taxes, currently at a rate of
10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being
required to file a return and being taxed under Circular 7, and we may be required to expend valuable resources to comply with Bulletin
37, or to establish that we should not be taxed under Circular 7 and Bulletin 37.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the uncertainty in how the new resident enterprise classification could apply, it is also possible that the rules may change
in the future, possibly with retroactive effect. If we are required under the Enterprise Income Tax law to withhold PRC income tax on
our dividends payable to our foreign shareholders, or if you are required to pay PRC income tax on the transfer of our shares under the
circumstances mentioned above, the value of your investment in our shares may be materially and adversely affected. These rates may be
reduced by an applicable tax treaty, but it is unclear whether, if we are considered a PRC resident enterprise, holders of our shares
would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. Any
such tax may reduce the returns on your investment in our shares.</span></p><div>

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</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"><b><i>The
M&amp;A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors,
which could make it more difficult for us to pursue growth through acquisitions in China.</i></b></span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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&#160;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&#160;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. These M&amp;A Rules and
some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make
merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances that
the China&#8217;s Commerce Ministry (&#8220;MOC&#8221;) be notified in advance of any change-of-control transaction in which a foreign
investor takes control of a PRC domestic enterprise. Moreover, the Anti-Monopoly Law requires that the MOC shall be notified in advance
of any concentration of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOC that
became effective in September&#160;2011 specify that mergers and acquisitions by foreign investors that raise &#8220;national defense
and security&#8221; concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic
enterprises that raise &#8220;national security&#8221; concerns are subject to strict review by the MOC, and the rules prohibit any activities
attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.
In the future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned
regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including
obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions, which could
affect our ability to expand our business or maintain our market share.</span></p><div>

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</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"><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></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
February&#160;2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating
in Stock Incentive Plans of Overseas Publicly-Listed Companies, replacing earlier rules promulgated in March&#160;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 subsidiaries 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 and who are granted options or other awards under the equity incentive
plan are subject to these regulations as our company has become an overseas listed company. 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; ability to distribute dividends to us. We also face regulatory uncertainties that could restrict
our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.</span></p><div>

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</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"><b><i>Failure
to make adequate contributions to various mandatory social security plans as required by PRC regulations may subject us to penalties.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC
laws and regulations require us to pay several statutory social welfare benefits for our employees, including pensions, medical insurance,
work-related injury insurance, unemployment insurance, maternity insurance and housing provident fund contributions. Local governments
usually implement localized requirements as to mandatory social security plans considering differences in economic development in different
regions. Our failure in making contributions to various mandatory social security plans and in complying with applicable PRC labor-related
laws may subject us to late payment penalties. We may be required to make up the contributions for these plans as well as to pay late
fees and fines. If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results
of operations may be adversely affected.</span></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">&#160;</span></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"><b><i>Our
current employment practices may be restricted under the PRC Labor Contract Law and our labor costs may increase as a result.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC Labor Contract Law and its implementing rules impose requirements concerning contracts entered into between an employer and its employees
and establishes time limits for probationary periods and for how long an employee can be placed in a fixed-term labor contract. Because
there is lack of clarity with respect to the implementation and potential penalties and fines provided in the Labor Contract Law and
tis implementing rules, it is uncertain how it will impact our current employment policies and practices. We cannot assure you that our
employment policies and practices do not, or will not, violate the Labor Contract Law or its implementing rules and that we will not
be subject to related penalties, fines or legal fees. If we are subject to large penalties or fees related to the Labor Contract Law
or its implementing rules, our business, financial condition and results of operations may be materially and adversely affected. In addition,
according to the Labor Contract Law and its implementing rules, if we intend to enforce the non-compete provision with an employee in
a labor contract or non-competition agreement, we have to compensate the employee on a monthly basis during the term of the restriction
period after the termination or ending of the labor contract, which may cause extra expenses to us. Furthermore, the Labor Contract Law
and its implementation rules require certain terminations to be based upon seniority rather than merit, which significantly affects the
cost of reducing workforce for employers. In the event we decide to significantly change or decrease our workforce in the PRC, the Labor
Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our circumstances or in
a timely and cost-effective manner, thus our results of operations could be adversely affected.</span></p><div>




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</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"><b><i>If
the chops of our PRC company and branches are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes,
the corporate governance of these entities could be severely and adversely compromised.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature.
Each legally registered company in China is required to maintain a company chop, which must be registered with the local Public Security
Bureau. In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The
chops of our PRC subsidiary are generally held securely by personnel designated or approved by us in accordance with our internal control
procedures. To the extent those chops are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes,
the corporate governance of these entities could be severely and adversely compromised and those corporate entities may be bound to abide
by the terms of any documents so chopped, even if they were chopped by an individual who lacked the requisite power and authority to
do so. In addition, if the chops are misused by unauthorized persons, we could experience disruption to our normal business operations.
We may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management
from our operations.</span></p><div>

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</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"><b><i>You
may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against
us or our management named in the prospectus supplement based on foreign laws. It may also be difficult for you or overseas regulators
to conduct investigations or collect evidence within China.</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a company incorporated under the laws of the Cayman Islands, and we conduct our operations in China and our assets are located in
China. In addition, most of our senior executive officers reside within China for a significant portion of the time. As a result, it
may be difficult for you to effect service of process upon us or those persons inside mainland China. In addition, there is uncertainty
as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons
predicated upon the civil liability provisions of the securities laws of the U.S. or any state.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
recognition and enforcement of foreign judgments are provided for under the&#160;<i>PRC Civil Procedures Law</i>. PRC courts may recognize
and enforce foreign judgments in accordance with the requirements of the&#160;<i>PRC Civil Procedures Law</i>&#160;based either on treaties
between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any
treaties or other forms of written arrangement with the U.S. that provide for the reciprocal recognition and enforcement of foreign judgments.
In addition, according to the&#160;<i>PRC Civil Procedures Law</i>, the PRC courts will not enforce a foreign judgment against us or
our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security,
or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in
the U.S. See &#8220;Enforceability of Civil Liabilities&#8221;.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. For example, in China,
there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside
China or otherwise with respect to foreign entities. 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.
Furthermore, 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 PRC State
Council and the competent departments of the PRC 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.</span></p><div>




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</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"><b><i>Recent
joint statement by the SEC and the Public Company Accounting Oversight Board (United States) (&#8220;PCAOB&#8221;), proposed rule
changes submitted by Nasdaq, the Holding Foreign Companies Accountable Act and Accelerating Holding Foreign Companies Accountable
Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification
of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties
to our offering.</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint
statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including
China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers
in China and higher risks of fraud in emerging markets.</span></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">On
May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply a minimum offering size requirement for companies primarily operating
in a &#8220;Restrictive Market&#8221;; (ii) adopt a new requirement relating to the qualification of management or the board of directors
for Restrictive Market companies; and (iii) apply additional and more stringent criteria to an applicant or listed company based on the
qualifications of the company&#8217;s auditors.</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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned
or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not
subject to PCAOB inspection. If the PCAOB is unable to inspect the company&#8217;s auditors for three consecutive years, the issuer&#8217;s
securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding
Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June&#160;4, 2020, the U.S. President issued a memorandum ordering the President&#8217;s Working Group on Financial Markets, (the &#8220;PWG&#8221;),
to submit a report to the President within 60 days of the memorandum that includes recommendations for actions that can be taken by the
executive branch and by the SEC or PCAOB on Chinese companies listed on U.S. stock exchanges and their audit firms. On August&#160;6,
2020, the PWG released the report and recommended the SEC implement five recommendations to address companies from jurisdictions that
do not provide the PCAOB with sufficient access to fulfill its statutory mandate (the &#8220;NCJs&#8221;). In particular, the PWG recommends
that enhanced listing standards be applied to companies from NCJs for seeking initial listing and remaining listed on U.S. stock exchanges.
Under the enhanced listing standards, if the PCAOB does not have access to work papers of the principal audit firm located in a NCJ for
the audit of a U.S.-listed company as a result of governmental restrictions, the U.S.-listed company may satisfy this standard by providing
a co-audit from an audit firm with comparable resources and experience where the PCAOB determines that it has sufficient access to the
firm&#8217;s audit work papers and practices to inspect the co-audit. The report permits the new listing standards to provide for a transition
period until January&#160;1, 2022 for listed companies, but would apply immediately to new listings once the necessary rulemakings and/or
standard-setting are effective. After this transition period, if currently listed companies were unable to meet the enhanced listing
standards, then they would become subject to securities exchange rules&#160;and processes that could lead to possible de-listing if not
cured, deregistration from the SEC and/or other risks, which may materially and adversely affect the market price and liquidity of such
companies&#8217; securities, or effectively terminate their trading in the United States.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 24, 2021, the SEC adopted interim final rules to implement certain disclosure and documentation requirements of
the&#160;HFCAA, which became effective on May 5, 2021. The requirements of annual report for foreign issuers have been updated by
the SEC to reflect the disclosure requirements, which require disclosure in a foreign issuer&#8217;s annual report regarding the
audit arrangements of, and governmental influence on, such foreign issuer. A foreign issuer would be required to comply with such
disclosure requirement if the SEC identified it as having a&#160;&#8220;non-inspection&#8221;&#160;year. On May 13, 2021, the PCAOB
proposed a new rule to implement the&#160;HFCAA, which was subsequently adopted by PCAOB on September 22, 2021 and approved by the
SEC on November 5, 2021. Among other things, the proposed rule provides a framework for the PCAOB to determine, under
the&#160;HFCAA, 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. The proposed rule also established the
approach, evaluation factors, required documents and information, form, public availability, effective date and duration of such
determinations and the process by which the board of the PCAOB can modify or vacate its determinations. On June 22, 2021, the U.S.
Senate passed a bill and if eventually signed into law, would reduce the number of consecutive&#160;non-inspection&#160;years
required for triggering the prohibitions under the HFCA Act from three years to two. The SEC may propose additional rules or
guidance that could impact us if our auditor is not subject to the PCAOB inspection. The SEC have implemented some of the concepts
recommended in the PWG report published in 2013, which were more stringent than the&#160;HFCAA. For example, if a company was not
subject to the PCAOB inspection, the report recommended that the transition period before a company would be delisted would end on
January 1, 2022. On December 2, 2021, the SEC issued amendments to finalize the interim final rules adopted in March 2021, and
established procedures to identify and prohibit the trading of the securities of certain registrants under the&#160;HFCAA. On
December 16, 2021, the PCAOB issued a report on its determination (the &#8220;2021 Determinations&#8221;) that it is unable to inspect or
investigate completely PCAOB-registered public accounting firms headquartered in China and in Hong Kong because of positions taken
by PRC and Hong Kong authorities in those jurisdictions. The PCAOB has made such determination as mandated under the Holding Foreign
Companies Accountable Act. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers
that have used non-inspected audit firms and thus are at risk of such suspensions in the future.</span></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"><span>In June 2021, the Senate passed the Accelerating Holding Foreign Companies Accountable Act (the &#8220;AHFCAA&#8221;), which was signed into law on December 29, 2022, amending the HFCAA and requiring the SEC to prohibit an issuer&#8217;s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the &#8220;SOP&#8221;) with the China Securities Regulatory Commission and the Ministry of Finance of China. The SOP, together with two protocol agreements governing inspections and investigations, establishes a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 Determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor&#8217;s, control, including positions taken by authorities of the PRC. The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond. The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to its ability to inspect and investigate completely accounting firms based in the mainland China and Hong Kong.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
auditor, Onestop Assurance PAC, the independent registered public accounting firm that issues the consolidated financial statements incorporated
by reference in this Annual Report, is a firm registered with the PCAOB and is subject to laws in the United States pursuant to which
the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. However, the recent developments
added uncertainties to our continued listing in the U.S. and 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
the audit of our financial statements.<b><i>&#160;</i></b>Such uncertainty could cause the market price of the ordinary shares to be
materially and adversely affected, and our securities could be delisted or prohibited from being traded&#160;&#8220;over-the-counter&#8221;&#160;earlier
than would be required by the&#160;HFCAA.</span></p><div>

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</div><div><a id="a_006"></a></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>Item
4. INFORMATION ON THE COMPANY</b></span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">History
                                            and Development of the Company</span></span></td></tr></table><div>

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</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"><i>Corporate
History and Background</i></span></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"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Powerbridge
is a company that was established under the laws of the Cayman Islands on July 27, 2018 as a holding company. The Company, through its
subsidiaries, is a provider of software application and technology services to corporate and government customers engaged in global trade.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the purpose of the IPO and listing on the NASDAQ Capital Market, a reorganization of the Company&#8217;s legal structure was completed
on August 27, 2018. The reorganization involved the incorporation of Powerbridge, a Cayman Islands holding company, and its wholly owned
subsidiary, Powerbridge HK, a holding company incorporated on July 27, 2018 under the laws of Hong Kong; and the transfer of all equity
ownership of Powerbridge Zhuhai to Powerbridge HK from the former shareholders of Powerbridge Zhuhai through an investment holding company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the reorganization, Powerbridge Zhuhai&#8217;s equity interests were held by the former shareholders through an investment holding
company. Powerbridge Zhuhai was incorporated on October 30, 1997 in Zhuhai, Guangdong province under the laws of the People&#8217;s Republic
of China. Powerbridge Zhuhai is an operating subsidiary that provides global trade software application and technology services to corporate
and government customers located in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 7, 2018, the former shareholders transferred their 100% ownership interest in Powerbridge Zhuhai to Powerbridge HK, which is 100%
owned by Powerbridge. After the reorganization, Powerbridge owns 100% equity interests of Powerbridge HK and Powerbridge Zhuhai. All
shareholders have the same ownership interest in Powerbridge as in Powerbridge Zhuhai prior to the reorganization.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this Annual Report, Zhuhai Powerbridge has five branches, which are located in China (Changsha, Wuhan, Nanning, Hangzhou)
and maintain offices in Changsha, Wuhan, Naning, and Hangzhou to serve different customers in various geographic locations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Powerbridge
Cayman is the sole shareholder of Powerbridge HK, incorporated in Hong Kong on July 27, 2018, and Hongding Hong Kong, incorporated in
Hong Kong on August 19, 2020. Powerbridge H K is the sole shareholder of Powerbridge Zhuhai. Powerbridge Zhuhai was incorporated on October
30, 1997 under the laws of the People&#8217;s Republic of China, as a wholly-owned subsidiary of Powerbridge HK and a wholly foreign-owned
entity under the PRC laws. Hongding Shenzhen was incorporated on October 21, 2020&#160;under the laws of the People&#8217;s Republic
of China, as a wholly-owned subsidiary of Hongding Hong Kong and a wholly foreign-owned entity under the PRC laws. As of the date of
this Annual Report, Hongding Hong Kong and Hongding Shenzhen have no business operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Neither
Powerbridge Cayman, Powerbridge HK, nor Hongding Hong Kong is currently engaged in any active business other than acting as holding companies.
We conduct our business mainly through Powerbridge Zhuhai and Hongding Shenzhen. As of the date of this Annual Report, Hongding Shenzhen
has no business operations.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 2, 2019, our ordinary shares commenced trading on Nasdaq under the symbol &#8220;PBTS&#8221;.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 21, 2019, the Company incorporated Wuhan Honggang Technology Co. Ltd. (&#8220;Wuhan Honggang&#8221;) in Hubei province under the
law of the PRC. Wuhan Honggang is 60% owned by Powerbridge Zhuhai, one of the wholly owned subsidiaries of the Company, and 40% owned
by a third party. Wuhan Honggang is engaged in application development service and Internet of Things (&#8220;IOT&#8221;) system developments.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 28, 2019, Powerbridge Zhuhai entered into a joint venture agreement (the &#8220;JV Agreement&#8221;) with Guangdong Guangrui Network
Technology Co., Ltd. (&#8220;Gaungrui&#8221;) to form the joint venture through a newly-formed corporation named Shantou Hongrui Information
Technology Co., Ltd. (&#8220;Hongrui&#160;&#8221;) to undertake exploration for technology information services in the area of Shantou
and Guangdong. Powerbridge Zhuhai and Guangrui each initially owned 51% and 49% equity interest in Hongrui. On July 1, 2019, Powerbridge
Zhuhai, Guangrui, and Haoqing Su entered into a supplemental agreement to the JV Agreement for equity interest alternation, pursuant
to which Hongrui was 51% owned by Powerbridge Zhuhai, 43% owned by Guangrui, and 6% owned by Haoqing Su. On August 19, 2019, Hongrui
was established in Guangdong province under the law of the PRC. On January 14, 2020, Haoqing Su entered into certain share transfer agreements
with Xiaoyu Liu and Hengqin Baisheng Investment Partnership (General Partnership) (&#8220;Hengqin&#8221;), pursuant to each of which,
Haoqing Su agreed to transfer 3% equity interest of Hongrui for RMB 150,000. On the same day, Guangrui entered into a certain share transfer
agreement with Xiaoyu Liu to transfer 18% equity interest of Hongrui for RMB 900,000. As a result of the share transfer agreements, Hongrui
was 51% owned by Powerbridge Zhuhai, 25% owned by Guangrui, 3% owned by Hengqin, and 21% owned by Xiaoyu Liu. On May 21, 2020, Powerbridge
Zhuhai, Guangrui, Hengqin, and Xiaoyu Liu entered into another supplemental agreement to the JV Agreement for equity interest alternation,
pursuant to which Hongrui is currently 38% owned by Powerbridge Zhuhai, 35% owned by Guangrui, 15% owned by Hengqin, and 12% owned by
Xiaoyu Liu. Shantou Hongrui is engaged in IT system development and integration service.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 2, 2019, Powerbridge Zhuhai, together with two unrelated entities, incorporated Chongqing Powerbridge Zhixin Technology Co.,
Ltd. (&#8220;Chongqing Powerbridge&#8221;) with Powerbridge Zhuhai holding 45% equity interest in Chongqing Powerbridge. By the date
of this Annual Report, Chongqing Powerbridge has not commenced its operations and Powerbridge Zhuhai has not injected any capital to
the business. Chongqing Powerbridge is engaged in IT system development and technical consulting service.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 28, 2020, Powerbridge&#160;Zhuhai incorporated Shenzhen Honghao Internet Technology Co., Ltd. (&#8220;Honghao&#8221;) in Guangdong
province under the law of the PRC. Honghao is 100% owned by the Powerbridge Zhuhai. . Powerbridge HK, incorporated a fully owned subsidiary
-Shenzhen Hongding Interconnect Technology Co., Ltd in Guangdong province under the law of the PRC. By the date of this Annual Report,
Honghao has not commenced its operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
Feb 8, 2021, Hongxi Data Technology Co., Ltd. (&#8220;Powerbridge Macau&#8221;) was incorporated in Macau, PRC. Powerbridge Macau is
70% owned by Powerbridge Zhuhai and 30% owned by unrelated entity. By the date of this Annual Report, Powerbridge Macau has not commenced
its operations and Powerbridge Macau has not injected any capital to the business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 25, 2021, Powerbridge Zhuhai incorporated Ningbo Zhijing Tongfu Technology Co., Ltd. (&#8220;Ningbo Zhijing&#8221;) was incorporated
under the law of the PRC. Ningbo Zhijing was 51% owned by the Powerbridge Zhuhai and 40% owned by unrelated entities. By the date of
this Annual Report, Ningbo Zhijing has not commenced its operations and Powerbridge Zhuhai has not injected any capital to the business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 7, 2021, Powerbridge Zhuhai incorporated Zhanjiang Hongqin Technology Co., Ltd. (&#8220;Zhanjiang Hongqin&#8221;) under the law
of the PRC. Zhanjiang Hongqin was 51% owned by the Powerbridge Zhuhai and 49% owned by unrelated entities. By the date of this Annual
Report, Zhanjiang Hongqin has ceased from its business and Powerbridge Zhuhai has not injected any capital to the business. Zhanjiang
Hongqin experienced change in shareholders and was not owned by Zhuhai Powerbridge hereafter.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 21, 2021, Powerbridge Zhuhai incorporated Zhuhai Hongyang Supply Chain Co., Ltd. (&#8220;Zhuhai Hongyang&#8221;) under the law of
the PRC. Zhuhai Hongyang was 60% owned by the Powerbridge Zhuhai and 40% owned by unrelated entities. By the date of this Annual Report,
Zhuhai Hongyang has not commenced its operations and Powerbridge Zhuhai has not injected any capital to the business.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 2, 2021, Powerbridge Zhuhai incorporated Hunan Xinfei Digital Technology Co., Ltd. (&#8220;Hunan Xinfei&#8221;) under the law
of the PRC. Hunan Xinfei was 51% owned by the Powerbridge Zhuhai and 49% owned by unrelated entities.. Hunan Xinfei is engaged in IT
system development and technical consulting service. By the date of this Annual Report, Hunan Xinfei has not commenced its operations
and Powerbridge Zhuhai has not injected any capital to the business. Hunan Xinfei experienced change in shareholders and was not owned
by Zhuhai Powerbridge hereafter.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 17, 2021, Powerstream Supply Chain Co., Ltd. (&#8220;Powerstream&#8221;) was incorporated under the laws of the PRC, as a wholly-owned
subsidiary of Powerbridge HK and a wholly foreign-owned entity under the PRC laws. Powerstream Zhuhai is engaged in supply chain services
and new business development.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 1, 2021, Powercrypto Holding Pte. Ltd. (&#8220;Powercrypto&#8221;) was incorporated under the laws of Republic of Singapore and
Powerbridge Cayman is the sole shareholder of Powercrypto. Powercrypto is planning to engage in cryptocurrencies mining and digital asset
related business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 21, 2022, Powermeta Digital Co., Ltd. (&#8220;Powermeta&#8221;) was incorporated under the laws of PRC, as a wholly-owned subsidiary
of Powerbridge HK. Powermeta is planning to engage in development of interactive media services, metaverse and digital services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
Febuary 15, 2022, Metafusion Digital Co., Ltd. (&#8220;Metafusion&#8221;) was incorporated under the laws of PRC and 66% stake of Metafusion
is owned by Powermeta. Metafusion is planning to engage in IPs development, metaverse and digital services.</span></p><div>




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</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 4, 2022, POWERCRYPTO USA Inc. (&#8220;POWERCRYPTO&#8221;) was incorporated under the laws of United States, as a wholly-owned subsidiary
of Powerbridge Cayman. By the date of this Annual Report, POWERCRYPTO has not commenced its operations and Powerbridge Zhuhai has not
injected any capital to the business</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 11, 2022, Powerstream Capital Co., Ltd. (&#8220;Powerstream Capital&#8221;) was incorporated under the laws of PRC, as a wholly-owned
subsidiary of Powerbridge HK. Powerstream Capital is engaged in strategic acquisitions and investments to expand market reach.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 6, 2022, the Company entered into an equity transfer agreement (the &#8220;First SmartConn Acquisition&#8221;) with the shareholder
of SmartConn., Limited (&#8220;SmartConn&#8221;) pursuant to which the Company agrees to purchase 19.99% equity of SmartConn at 90% of
the appraisal price. The consideration of the First SmartConn Acquisition was to be paid in the form of newly issued shares of the Company.
An aggregate of 17,138,305 Ordinary Shares was issued to its shareholders on February 22, 2022 upon the closing of the First SmartConn
Acquisition.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 5, 2023, the Company entered into an equity transfer agreement (the &#8220;Second SmartConn Acquisition&#8221;) with a shareholder
of SmartConn pursuant to which the Company agrees to purchase 31% equity of SmartConn at 90% of the appraisal price. The consideration
of the Second SmartConn Acquisition will be paid in the form of 114,899,222 newly issued shares of the Company. The Company will hold
an aggregate of 50.99% equity interest of the SmartConn following the closing of the Second SmartConn Acquisition and the First SmartConn
Acquisition of 19.99% equity interest of the SmartConn in January 2022.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SmartConn
wholly controls Shanghai Stamp Technology Co., Ltd. (&#8220;Stamp Technology&#8221;). Stamp Technology mainly engaged in distributed
database blockchain, cryptocurrency DAPP development and web 3.0 application in the industry. By acquiring SmartConn, Powerbridge intend
to incorporate its blockchain technology and web 3.0 know how application to further elevate Powerbridge&#8217;s product development
ability.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 20, 2022, Powerbridge Zhuhai entered into an equity purchase agreement with the Shenzhen Chenbao Information Service Co., Ltd.
(&#8220;Chenbao&#8221;), pursuant to which the Company agreed to acquire 5% equity interests (the &#8220;Acquired Interests&#8221;) of
the outstanding equity interests of Chenbao. Pursuant to the Agreement, Powerbridge Zhuhai shall purchase the Acquired Interests for
an aggregate purchase price of US$2.35 million, which shall be paid as follows: (i) US$0.47 million in cash; and (ii) 5,756,481 shares
of the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 24, 2022, the Company entered into an equity transfer agreement (the &#8220;First Boxinrui Acquisition&#8221;) with Boxinrui&#8217;s
shareholders (the &#8220;relevant shareholders&#8221;) of Boxinrui International Holdings Limited (&#8220;Boxinrui&#8221;) pursuant to
which the Company agrees to purchase 15% equity of Boxinrui at 90% of the appraisal price. The relevant shareholders would hold 19,942,553
shares of the Company upon the consummation of the First Boxinrui Acquisition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 16, 2022, the Company entered into an equity transfer agreement (the &#8220;Second Boxinrui Acquisition&#8221;) with 14 shareholders
of Boxinrui in which the Company agreed to purchase 20% of the equity interest of Boxinrui for the aggregated total consideration of
RMB48,206,973, which shall be settled by 55,300,530 newly issued ordinary shares of the Company. The Company will hold an aggregate of
35% equity interest of the Boxinrui following the closing of the Second Boxinrui Acquisition and the First Boxinrui Acquisition of 20%
equity interest of the Boxinrui in June 2022. Boxinrui wholly owns Hong Kong Anxin Jieda Co., Limited (&#8220;Anxin Jieda&#8221;), which
in turn owns 90% equity interest in Ascendent Insights Education Co., Ltd. (&#8220;AIedu&#8221;) (also previously known as Shenzhen Wenxing
Tianxia Technology Co., Ltd.). AIedu mainly engaged in Artificial Intelligence, Blockchain and NFT technology in the educational industry.
Such acquisition is aligned with Powerbridge&#8217;s metaverse strategy as Powerbridge intends to utilize AIedu&#8217;s business know-how
and technology to expand the Company&#8217;s operation.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 1, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, a Utah limited liability
company, pursuant to which the Company issued Streeterville Capital, LLC an unsecured convertible promissory note on September 1, 2022
in the original principal amount of $8,640,000, convertible into ordinary shares, $0.00166667 par value per share, of the Company.</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"></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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 1, 2022, the Company entered into a share purchase agreement (the &#8220;White Lion Agreement&#8221;) with White Lion Capital
LLC, a Nevada limited liability company, which provides that White Lion Capital is committed to purchase our ordinary shares, $0.00166667
par value per share, with an aggregate offering price of up to $15,000,000 (&#8220;Commitment Amount&#8221;) from time to time during
the commitment period, which commences on the execution date of the White Lion Agreement, and shall terminate on the earlier of (i) the
date on which the Investor shall have purchased shares equal to the Commitment Amount, or (ii) May 31, 2024 , or (iii) the date on which
the White Lion Agreement is terminated.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 9, 2022, the Company entered into a Standby Equity Purchase Agreement (the &#8220;Standby Agreement&#8221;) with YA II PN,
Ltd. Pursuant to the Standby Agreement, the Company will be able to issue and sell up to $30,000,000 of its ordinary shares, par value
of US$ 0.00166667 per share, at the Company&#8217;s sole option, any time during the three-year period following the execution date of
the Standby Agreement subject to certain limitations. Pursuant to the terms of the Standby Agreement, any shares sold to the Investor
will be priced at 96% of the market price, which is defined as the lowest daily volume weighted average price of the shares during the
three consecutive trading days commencing on the trading day immediately following the Company&#8217;s delivery of an advance notice
to the Investor. Any sale of shares pursuant to the Standby Agreement is subject to certain limitations, including that the Investor
is not permitted to purchase any shares that would result in it owning more than 4.99% of the Company&#8217;s Shares.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 27, 2022, the Company entered into an equity transfer agreement with six individual shareholders of DTI Group Limited (&#8220;DTI&#8221;),
pursuant to which the Company agreed to purchase 19% equity interest of DTI Jiangsu Corporation Limited (&#8220;DTI Jiangsu&#8221;) for
a consideration of RMB 57,435,100.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 29, 2022, the Company entered into a standby equity purchase agreement (the &#8220;Standy Agreement&#8221;) with TBS CAPITAL
LP, pursuant to which the Company will be able to issue and sell up to US$10,000,000 of its ordinary shares, par value of US$0.00166667
per share, at the Company&#8217;s sole option. Pursuant to the terms of the Standby Agreement, any shares sold to the investor will be
priced at 96% of the market price, which is defined as the lowest daily volume weighted average price of the shares during the three
consecutive trading days commencing on the trading day immediately following the Company&#8217;s delivery of an advance notice to the
investor. Any sale of shares pursuant to the Standby Agreement is subject to certain limitations, including that the Investor is not
permitted to purchase any shares that would result in it owning more than 4.99% of the Company&#8217;s Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and will file reports, registration
statements and other information with the SEC. The Company&#8217;s reports, registration statements and other information can be inspected
on the SEC&#8217;s website at www.sec.gov and such information can also be inspected and copies ordered at the public reference facilities
maintained by the SEC at the following location: 100 F Street NE, Washington, D.C. 20549. You may also visit us on the World Wide Web
at www.powerbridge.com. However, information contained on our website does not constitute a part of this Annual Report.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
principle executive offices are located at Advanced Business Park, 9th Fl, Bldg C2, 29 Lanwan Lane&#65292;Hightech District, Zhuhai,
Guangdong 519080, China. Our telephone number is +86-756-339-5666. Our principle website address is www.powerbridge.com. The information
on our website is not part of this Annual Report.</span></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-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following diagram illustrates our corporate structure of our principal subsidiaries as of the date of this Annual Report.</span></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; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_001.jpg" style="height: 207px; width: 750px"/>&#160;</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"><i>Compliance
with Foreign Investment </i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
limited liability companies formed and operating in the PRC are governed by the Company Law of the People&#8217;s Republic of China (the
&#8220;Company Law&#8221;), which was amended and promulgated by the Standing Committee of the National People&#8217;s Congress on October
26, 2018 and came into effect on the same day. Foreign invested enterprises must also comply with the Company Law, with exceptions as
specified in the relevant foreign investment laws. Under our corporate structure as of the date of this Annual Report, 100% of the equity
interests of Powerbridge Zhuhai are entirely and indirectly held by our company through Powerbridge HK. Therefore, Powerbridge Zhuhai,
a wholly foreign-owned enterprise (&#8220;WFOE&#8221;) of Powerbridge HK, should be regarded as a foreign-invested enterprise and comply
with both the Company Law and other applicable foreign investment laws.</span></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>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
respect to the establishment and operation of WFOEs, the MOFCOM, and the National Development and Reform Commission (the &#8220;NDRC&#8221;),
promulgated the Catalogue of Industries for Guiding Foreign Investment (the &#8220;Catalogue&#8221;), as amended on June 28, 2017, which
came into effect on August 28, 2017. The Catalogue divides industries for foreign investment into three categories: encouraged, restricted
and prohibited. Those industries not set out in the Catalogue shall be classified as industries permitted for foreign investment. The
Catalogue serves as the main basis for management and guidance for the MOFCOM to manage and supervise foreign investments to PRC. In
addition, in June 2018, MOFCOM and NDRC promulgated the Special Management Measures (Negative List) for the Access of Foreign Investment
(the &#8220;Negative List&#8221;), effective July 2018. The Negative List expands the scope of permitted industries by foreign investment
by reducing the number of industries that fall within the Negative List where restrictions on the shareholding percentage or requirements
on the composition of board or senior management still exists. According to the Catalogue and the Negative List, IT services, the main
business that our PRC subsidiary presently conduct, are neither restricted nor prohibited.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Emerging
Growth Company Status </i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an &#8220;emerging growth company&#8221;
as defined in the Jumpstart Our Business Startups Act (the &#8220;JOBS Act&#8221;), enacted in April 2012, and may take advantage of
reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">being permitted to present
    only two years of audited financial statements and only two years of related Management&#8217;s Discussion and Analysis of Financial
    Condition and Results of Operations in our SEC filings;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">not being required to comply
    with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reduced disclosure obligations
    regarding executive compensation in periodic reports, proxy statements and registration statements; and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exemptions from the requirements
    of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
    approved.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first
sale of our common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended. However,
if certain events occur before the end of such five-year period, including if we become a &#8220;large accelerated filer&#8221;, our
annual gross revenues exceed $1.07 billion or we issue more than $1.00 billion of non-convertible debt in any three-year period, we will
cease to be an emerging growth company before the end of such five-year period.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, Section 107 of the JOBS Act provides that an &#8220;emerging growth company&#8221; can take advantage of the extended transition
period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have elected to
take advantage of the extended transition period for complying with new or revised accounting standards and acknowledge such election
is irrevocable pursuant to Section 107 of the JOBS Act.</span></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">&#160;&#160;</span></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"><i>Foreign
Private Issuer Status </i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are incorporated in the Cayman Islands. Less than 50% of our outstanding voting securities are held by U.S. residents&#160;and none of
the following three circumstances applies: the majority of our executive officers or directors are U.S. citizens or residents; more than
50% of our assets are located in the United States; or our business is administered principally in the United States. Therefore, we are
a &#8220;foreign private issuer&#8221;, as defined in Rule 405 under the Securities Act and Rule 3b-4(c) under the Securities Exchange
Act of 1934, as amended (&#8220;Exchange Act&#8221;). As a result, we are not subject to the same requirements as U.S. domestic issuers.
Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those
of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not
be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will
not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit
disclosure and recovery regime.</span></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">&#160;</span></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"><i>The
Initial Public Offering&#160;</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 4, 2019, the Company completed its initial public offering of 1,750,000 Ordinary Shares, $0.00166667 par value per share. The Ordinary
Shares were sold at an offering price of $5.00 per share, generating gross proceeds of approximately $8.75 million, and net proceeds
of approximately $7.8 million. The registration statement relating to the IPO also covered the underwriters&#8217; common stock purchase
warrants and the Ordinary Shares issuable upon the exercise thereof in the total amount of 122,500 Ordinary Shares. Each five-year warrant
entitles the warrant holder to purchase the Company&#8217;s shares at the exercise price of $5.50 per share and is not be exercisable
for a period of 180 days from March 28, 2019. Our Ordinary Shares began trading on the NASDAQ Capital Market on April 2, 2019 under the
ticker symbol &#8220;PBTS&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 10, 2019, the Company closed on the exercise in full of the over-allotment option to purchase an additional 262,500 Ordinary Shares
of the Company by Maxim Group LLC and The Benchmark Company, LLC, the representatives of the underwriters in connection with and the
joint book running managers of the Company&#8217;s IPO (&#8220;Underwriters&#8221;), at the IPO price of $5.00 per share. As a result,
the Company has raised gross proceeds of approximately $1.31 million, in addition to the IPO gross proceeds of $8.75 million, or combined
gross proceeds in this IPO of approximately $10.06 million, before underwriting discounts and commissions and offering expenses.</span></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><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; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Business Overview </span></span></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">&#160;</span></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"><b>Overview</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a provider of software application and technology solutions and services to corporate and government customers primarily located
in China. We introduced global trade software applications when we launched our operations in 1997 with a vision to make global trade
operations easier for our customers. Our mission is to make global trade easier by empowering all players in the ecosystem. Since our
inception, we have continued to innovate by developing technologies that enable us to successfully deliver a series of technology solutions
that address the evolving and changing needs of our corporate and government customers.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Most
of our customers are corporate and government organizations engaged in global trade. Our corporate customers are import and export companies,
manufacturers engaged in international trade, as well as logistics and other service providers. Our government customers include customs
and other government agencies that oversee the flow of goods and services across borders, as well as governmental authorities and organizations
that manage and operate free trade and bonded trade zones, ports and terminals, and other international trade facilities.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
customers are facing increasing challenges as the world&#8217;s trade ecosystems continue to grow in size and complexity. Costs associated
with global trade, such as logistics performance, border control and international connectivity remain high. Potential savings from more
collaborative and efficient trade processes could reduce the costs of global trade significantly. The need for greater efficiency and
cost savings are driving the transformative shift for participants in global trade to become more connected and collaborative.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
comprehensive and robust solutions and services include <i>Powerbridge Digital Solutions</i> and <i>Powerbridge SaaS Services</i> with
more than 40 solutions and services deployable on premise and in the cloud. Leveraging our deep domain knowledge and strong industry
experience, we provide a series of differentiated and robust solutions and services that address the mission critical needs of our corporate
and government customers, enabling them to handle and simplify the complexities of global trade operations, logistics and compliance.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration:underline">Powerbridge
Digital Solutions</span></i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
provide <i>Powerbridge Digital Solutions</i> to our corporate and government customers engaged in global trade, including businesses
and manufacturers across a broad range of industries, government agencies and regulatory authorities, as well as global trade logistics
and other service providers. <i>Powerbridge Digital Solutions</i> enable our customers to streamline their trade operations, trade logistics
and regulatory compliance, consisting of <i>Trade Enterprise Solutions</i> and <i>Trade Compliance Solutions</i> which have been in service
since our first introduction twenty years ago and <i>Import &amp; Export Loan and Insurance Processing </i>which have recently been introduced
to a selected group of customers.</span></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">&#160;</span></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"><b><i><span style="text-decoration:underline">Powerbridge
SaaS Services</span></i></b></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
began offering our <i>Powerbridge SaaS Services</i> (software-as-a-service) in 2016 and are continually developing and expanding our
SaaS services that provide our corporate and government customers with significant benefits, including better use of resources, a lower
cost of operations, easier document handling, faster processing time as well as higher logistics and compliance connectivity and efficiency.
<i>Powerbridge SaaS Services</i> include <i>Logistics Service Cloud </i>and <i>Trade Zone Operations Cloud </i>which are in service,
and <i>Inward Processed Manufacturing Cloud, Cross-Border eCommerce Cloud </i>and <i>Import &amp; Export Loan. </i></span></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"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration:underline">Powerbridge
BaaS Services</span></i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have begun offering our cloud-based&#160;<i>Powerbridge BaaS Services</i>&#160;(blockchain-as-a-service) with designated use case for
limited government customer in June 2019 and we have generated limited revenue from it. We continue developing our BaaS Services for
market commercialization. Blockchain technology is emerging as a major disruptive force across many industries including those involved
in global trade. We believe that blockchain technology could allow our customers to conduct business in more synchronized and collaborative
ways to substantially increase operational efficiency and reduce trade costs across the global trade supply chain.&#160;<i>Powerbridge
BaaS Service</i>&#160;includes&#160;<i>Compliance Blockchain Services</i> and <i>Supply Chain Blockchain Services</i>.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
solutions and services are built from our multiple proprietary technology platforms which are developed based on industry leading open
source infrastructure technologies. Our technology platforms include <i>Powerbridge System Platform</i> and <i>Powerbridge SaaS Platform</i>,
which are designed for high-performance reliability, flexibility and scalability, allowing us to expand our solutions and services rapidly
and efficiently to consistently address the needs of our corporate and government customers. Our <i>Powerbridge BaaS Platform </i>became
available in June 2019.&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Powerbridge
System Platform </i>consists of modular technology and business components that enable us to provide mission critical applications and
solutions in trade operations, trade logistics and regulatory compliance to our corporate and government customers.</span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Powerbridge
SaaS Platform </i>is the technology infrastructure upon which we are developing our SaaS services designed to provide on-demand services
in trade operations, trade logistics and regulatory compliance with a multi-tenant and microservice architecture.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
BaaS services are built on top of our <i>Powerbridge Blockchain Platform</i> that is designed to allow the customs agency to increase
the effectiveness of risk assessments and interventions in monitoring and controlling the flow of goods, documents, and vendors for cross
border trade events and transactions, with an enhanced level of regulatory information transparency and synchronization among customs
agencies and other government authorities.&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
intend to continue leveraging our industry expertise and product knowledge with the best use of emerging and disruptive technologies
such as big data, artificial intelligence and Internet of Things to enhance our core technology capabilities and continually increase
the scope of our solutions and services to our customers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
corporate and government customers include (i) international trade businesses and manufacturers; (ii) governmental agencies and authorities;
and (iii) logistics and other various service providers. We currently derive our revenues from four sources: (1) revenue from application
development services generated from <i>Powerbridge Digital Solutions, </i>which require us to perform services including project planning,
project design, application development and system integration based on customers&#8217; specific needs. These services also require
significant production and customization; (2) revenue from consulting and technical support services primarily generated from <i>Powerbridge
Digital Solutions</i>; and (3) revenue from subscription services generated from <i>Powerbridge SaaS Services</i>, (4) revenue from trading
business. We currently generate most of our revenues from application development services, which represented 36.7% 63.3% and 82.5% of
total revenue in fiscal 2022, 2021 and 2020, respectively. Revenue from consulting and technical support services represented 24.2%,
14.2% and 14.2% of total revenue in fiscal 2022, 2021 and 2020, respectively. Revenue from subscription services represented 7.2%, 2.9%
and 3.3% of total revenue in fiscal 2022, 2021 and 2020, respectively. Revenue from trading represented 31.8% and 19.6% of total revenue
in fiscal 2022 and 2021. For the fiscal years ending December 31, 2022, 2021 and 2020, our revenues were $10.5 million, $32.1 million
and $26.7 million, respectively.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this Annual Report, we had a total of 177 full-time employees, of which 90 are in research and development, 17 are in
sales and marketing, 38 are in technical and customer services, and 32 are in general administration.&#160;</span></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>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe the need for global trade software application and technology services will continue to grow, driven by the continuing growth
in China&#8217;s global trade volume and the rapid advancement of the Belt &amp; Road Initiative (&#8220;B&amp;R&#8221;). The convergence
of disruptive technologies and emergence of blockchain technology will accelerate the drive for organizations engaged in global trade
to increasingly adapt at scale to new technologies as they mature and become more widely available.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
intend to address the subsets of three technology markets: the traditional enterprise software market in China which we have been servicing
since our inception, the SaaS application market in China which we began servicing in 2016, and the blockchain applications market for
which we have begun to implement the BaaS services with designated use since June 2019.&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to Techvio, an industry research and consulting firm with offices located around the world, the market size in global trade management
software of 2019 is $334.5 million and is expected to grow to $416.23 million in 2024.<sup>1</sup>&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the market report entitled &#8220;Blockchain Technology Market Size By Providers (Infrastructure Provider, Application Provider, Operators),
By Application (Smart Contract, Payment &amp; Wallet, Digital Identity, Exchange, Compliance &amp; Risk Management), By End-use (BFSI,
Government, Healthcare, IT Service, Media &amp; Entertainment, Transportation &amp; Logistics) Industry Analysis Report, Regional Outlook,
Growth Potential, Competitive Market Share &amp; Forecast, 2019 &#8211; 2025&#8221; published in November 2019, blockchain technology
market size surpassed USD 488 million in 2018 and is predicted to grow at more than 69% CAGR between 2019 and 2025<sup>2</sup>.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b>Our
Competitive Strengths</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that the following competitive strengths contribute to our success and differentiate us from our competitors:</span></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">&#160;</span></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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    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Global Trade Software
    Application Pioneer</i></b>. We introduced software applications for international trade companies when we launched our operations
    in 1997. Since our inception, we have continued to innovate by developing technologies that enable us to consistently and successfully
    deliver a series of solutions and services that address the evolving and changing needs of our customers.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>1</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">https://www.technavio.com/talktous?report=IRTNTR22765&amp;type=sample&amp;rfs=epd&amp;src=search</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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: justify"><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: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>2</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Blockchain Technology Market
    2019-2025 | Global Report; Published Date: November 2019 | 259 Pages | Report ID: GMI2194 (From Global Market Insights) https://www.gminsights.com/industry-analysis/blockchain-technology-market</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>3.</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The industry enters the
    era of strict regulation: In-depth analysis on the current situation of Chinese cosmetics market and key enterprises in 2022 | China
    Business Industry Research Institute | https://www.askci.com; https://baijiahao.baidu.com/s?id=1725091146940684122&amp;wfr=spider&amp;for=pc</span></td></tr>
  </table><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">&#160;</span></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 -->46<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Deep Domain Knowledge
    and Industry Expertise.&#160;</i></b>We have gained and developed deep domain knowledge and industry expertise from over twenty years
    of experience in service, which is built into and will continue to contribute to the robust and differentiated capabilities of our
    solutions and services. We believe domain knowledge and industry expertise is a significant competitive barrier due to the complex
    nature of global trade.</span></td></tr>
  </table><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"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Solid and Diversified
    Customer Base</i></b>. Our corporate and government customers include global trade businesses and manufacturers across a broad range
    of industries, governmental agencies and authorities as well as logistics and other service providers. Our solid customer base enables
    us to continually cross sell our solutions and services and to expand our market share.</span></td></tr>
  </table><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"><b><i>&#160;</i></b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Comprehensive and
    Robust Product Portfolio</i></b>. Our proven track record with our customers demonstrates the strengths in our comprehensive and
    robust solution and service portfolio that is built to handle the complexities of global trade business. We continue to leverage
    disruptive technologies to expand the breadth and adaptability of our portfolio of offerings to serve a wider range of customers.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Mission-Critical
    System That is Difficult to Replace</i></b>. Because our solutions and services address the mission-critical needs in global trade,
    our customers depend on our solutions and services for managing their regulatory compliance and trade logistics operations. Once
    deployed, our solutions and services become a mission-critical system that is often deeply entrenched into their core technology
    and operational infrastructures.</span></td></tr>
  </table><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;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Extensive Experience
    for the Belt</i>&#160;&amp;&#160;<i>Road</i></b>. The B&amp;R has catalyzed substantial development for improving regulatory compliance
    and trade logistics in China. We have been providing our solutions and services to help our customers achieve their objectives in
    this regard. Our extensive experience will enable us to efficiently expand into international markets which we intend to target as
    B&amp;R accelerates in these markets<sup>3</sup>.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Strong Brand Recognition
    and Industry Resources.&#160;</i></b>We have built a trusted brand with a long history and a proven track record of delivering value
    to our customers. We believe our brand, reputation and scale as well as our extensive network of industry and government resources
    enable us to capture substantial growth potential as our corporate and government customers continue to grow and evolve.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Solid Foundation
    for Developing Blockchain Applications.&#160;</i></b>Blockchain technology is promising for business but its adoption is challenging.
    It requires not only technology and product expertise but also the ability to integrate and bring all players to adapt and participate.
    We believe we are capable of utilizing blockchain for global trade by leveraging our strong domain knowledge, product expertise and
    industry resources.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Scalable Business
    Model with a Prudent Approach</i></b>. Our solutions and services are highly adaptable, scalable and supported by our flexible technology
    infrastructures, enabling us to efficiently expand our customer base. In addition, we are taking a prudent approach by combining
    traditional technologies and disruptive technologies because we believe the adoption and transformation of new technologies will
    take considerable time and effort.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Experienced and Visionary
    Management Team</i></b>. Our success is attributable to the deep industry expertise and proven track-record of our experienced management.
    We were founded twenty years ago with a vision to make global trade operations easier, and since then, we have successfully demonstrated
    our abilities. We believe our management&#8217;s strong execution capability is among the best in our industry.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>3</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Belt and Road Portal,&#160;https://eng.yidaiyilu.gov.cn</span></td></tr>
  </table><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>

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

</div><!-- Field: Page; Sequence: 52; 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 -->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">&#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"><b>Our
Growth Strategy</b>&#160;&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
plan to grow and expand our business by pursuing the following growth strategies:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Increase Revenue
    with Existing Customers</i></b>. We have a large number of corporate and government customers that currently utilize our global trade
    software application and technology services. We intend to increase our revenue by leveraging and broadening our relationships with
    existing customers by helping them identify new use cases for our existing solutions and services; and solving more problems for
    them by providing new solutions and services.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Accelerate Research
    and Development.&#160;</i></b>We used a portion of the proceeds from the IPO towards our research and development to accelerate the
    development of disruptive technology-enabled global trade software application and technology solutions and services. We believe
    disruptive technology-enabled applications such as SaaS and BaaS services will enable us to capture significant market share in China
    and abroad.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Expand Our Solution
    and Service Offerings.</i></b>&#160;Global trade involves complex and cumbersome processes in trade operations, trade logistics and
    regulatory compliance with many players in the global trade ecosystem. Each player is operating in different settings and with different
    objectives. We plan to expand our offerings and focus on solutions and services that enable our customers to better connect and collaborate.</span></td></tr>
  </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: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Increase Market Penetration.</i></b>&#160;We
    plan to leverage our deep domain knowledge, industry experience and product expertise to increase our market penetration with a deeper
    market coverage and a broader geographical reach in China. We intend to continually strengthen our sales and marketing capabilities
    and build strategic partnerships with government and corporate organizations to further drive sales.</span></td></tr>
  </table><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"><b><i>&#160;</i></b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Expand into International
    Markets</i></b>. China&#8217;s B&amp;R has brought significant opportunities for Chinese organizations such as infrastructure builders
    and logistics service providers. We plan to expand into international markets by &#8220;piggybacking&#8221; on these organizations
    as they bring their products and services to the B&amp;R countries. We believe this approach will mitigate risk, reduce cost and
    minimize time-to-market for entering new markets.</span></td></tr>
  </table><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"><b><i>&#160;</i></b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Pursue Strategic
    Acquisitions and Investments.</i></b>&#160;We plan to pursue strategic acquisitions and investments in selective technologies and
    businesses that will enhance our technology capabilities, expand our offerings and increase our market penetration. We believe our
    strategic acquisition and investment strategy is critical for us to accelerate our growth and strengthen our competitive position.</span></td></tr>
  </table><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>

</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"><b>Our
Solutions</b></span></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"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
provide software applications and technology solutions and services to corporate and governmental organizations which involved in global
trade. We introduced our first global trade software application in 1998 and have since substantially expanded the scope of our solutions
and services to address deeper and broader customer needs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
solutions and services currently include&#160;<i>Powerbridge Digital Solutions </i>and <i>Powerbridge SaaS Services; </i>we are also
designing and developing <i>Powerbridge BaaS Services</i>.</span></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><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have been serving our corporate and government customers with&#160;<i>Powerbridge Digital Solutions&#160;</i>since our introduction of
this solution series twenty years ago. Our comprehensive solutions and services address the mission critical needs in global trade for
our customers, enabling them to optimize and streamline their trade operations, trade logistics and regulatory compliance.</span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2016, we introduced&#160;<i>Powerbridge SaaS Services&#160;</i>and are continually expanding the scope of our SaaS services.&#160;<i>Powerbridge
SaaS Services</i>&#160;is a software-as-a-service designed to enable businesses and government organizations with significant benefits,
including better use of resources, lower cost of operations, easier documentation handling, faster processing time as well as higher
logistics and compliance and connectivity and efficiency.</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"></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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
began offering our cloud-based&#160;<i>Powerbridge BaaS Services</i>&#160;(blockchain-as-a-service) with designated use case for limited
government customer in June 2019 and have not generated any revenue from it yet. We continue developing our BaaS Services for market
commercialization. Blockchain technology is emerging as a major disruptive force across many industries, including those involved in
global trade. We believe that blockchain technology could allow our customers to conduct business in more synchronized and collaborative
ways to substantially increase operational efficiency and reduce trade costs across the global trade supply chain.&#160;<i>Powerbridge
BaaS Service</i> includes&#160;<i>Compliance Blockchain Services and Supply Chain Blockchain Services.</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
solutions and services are built from our multiple proprietary technology platforms:&#160;<i>Powerbridge System Platform</i>&#160;and&#160;<i>Powerbridge
SaaS Platform</i>, which are designed for high-performance reliability, flexibility and scalability, allowing us to expand our solutions
and services rapidly and efficiently to consistently address the needs of our corporate and government customers. Our&#160;<i>Powerbridge
BaaS Platform</i>&#160;became available in June 2019.&#160;</span></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"><b><i>&#160;</i></b></span></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"><b><i><span style="text-decoration:underline">Powerbridge
Digital Solutions</span></i></b></span></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"><b>&#160;</b></span></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"><b><i>Overview
of Powerbridge Digital Solutions</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
provide&#160;<i>Powerbridge Digital Solutions&#160;</i>to our corporate and government customers engaged in global trade, including import
and export businesses, manufacturers, government agencies and regulatory authorities, as well as trade logistics and other service providers.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Powerbridge
Digital Solutions</i>&#160;include&#160;<i>Trade Compliance Solutions</i>&#160;and&#160;<i>Trade Enterprise Solutions&#160;</i>which
have been in service since our first introduction twenty years ago and&#160;<i>Import &amp; Export Loan and Insurance Processing</i>&#160;which
have recently been introduced to a selected group of customers.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Trade
Compliance Solutions</i>&#160;and&#160;<i>Trade Enterprise Solutions</i>&#160;are implemented and deployed on premises largely as customized
services capable of integrating with applications, systems, equipment and facilities from customers and third-party providers.</span></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">&#160;</span></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"><b><i>Strengths
of Powerbridge Digital Solutions: </i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe&#160;<i>Powerbridge Digital Solutions</i>&#160;provide the following core benefits for our customers:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our&#160;<i>Trade Compliance
    Solutions</i>&#160;enable government agencies and regulatory authorities with greater control and security, better use of resources,
    higher duty collection, faster processing time and higher compliance efficiency in servicing global trade businesses and logistics
    service providers.</span></td></tr>
  </table><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;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Import and export businesses
    and manufacturers in diverse vertical industries use our&#160;<i>Trade Enterprise Solutions</i>&#160;to manage business operations,
    simplify trade processes, reduce document handling, minimize operational cost and increase overall productivity.</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"></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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Trade
Compliance Solutions</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Trade
Compliance Solutions</i>&#160;are a series of regulatory compliance solutions and services for government agencies and regulatory authorities
for managing trade zones, optimizing port control, streamlining customs clearance, accelerating cross-border processing, and expanding
Chinaport services, which include the following:</span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Trade
Zone Compliance.&#160;</i>We provide&#160;<i>Trade Zone Compliance&#160;</i>to government agencies and authorities such as customs for
regulating cross-border flow of goods and services and trade facility authorities for managing the trade zones, including bonded traded
zones, free trade zones and other regulated trade zones. Our solution allows our government customers to streamline compliance and business
processes and automate document processing and exchange as well as manage and regulate all operational activities in the trade zones,
including goods and cargo flows, logistics and warehousing, and inward processing manufacturing.</span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Port
Compliance &amp; Logistics.&#160;</i>Import and export ports include ocean, air, rail, river, highway and cross-border ports. Port operations
involve complex and cumbersome processes with many players involved, including port and terminal authorities, customs and other government
agencies, import and export businesses and cargo owners, transport vessels and vehicle operators, customs and forwarding agents and various
logistics service providers. We provide&#160;<i>Port Compliance</i>&#160;&amp;&#160;<i>Logistics</i>&#160;to all players to streamline
compliance and logistics processes, which enables rapid and efficient handling of goods and documents.</span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Customs
Clearance</i>. We provide&#160;<i>Customs Clearance</i>&#160;to customs and other government agencies such as customs and inspections
to regulate cross-border flow of goods and services for regulatory compliance operations and control. Our solution enables our government
customers to streamline customs clearance processes, increase fraud detection capabilities, and enhance duty collections, with featured
applications including single window operations, clearance compliance and processing, import and export goods inspection, inward processed
manufactured goods clearance, cross-border clearance as well as risk and security control and duty processing.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cross-Border
Processing</i>. We provide&#160;<i>Cross Border Processing</i>&#160;to the customs agency, quarantine and inspection agency and other
government agencies and authorities for managing and regulating commodity and merchandise trades at designated trade markets or areas
at cross-borders between China and its neighboring countries. Our solution enables government agencies and authorities to effectively
and efficiently manage all cross-border trade operations, including trader registration, merchandise inspection, customs processing,
vehicle control and checkpoint operations.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Chinaport
Services</i>. Chinaport is an import and export technology and data platform supported by sixteen major government ministries and bureaus,
including China Customs, MOC, Ministry of Industry and Information Technology, Ministry of Transportation and State Administration of
Foreign Exchange. Chinaport provides services to port authorities for data sharing and online verifications and to trade businesses for
import and export processing. We offer customized solutions and services to Chinaport organizations at national and local levels, engaging
in project designing and planning, system and platform development, system maintenance and customer service for multiple Chinaport strategic
initiatives and programs.</span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Smart
Command.&#160;</i>Government agencies and authorities such as customs and trade facility authorities use&#160;<i>Smart Command</i>&#160;for
more effective managing and regulating trade compliance and trade logistics activities under their supervision. Our smart command dashboard
integrates key performance data from structured and unstructured data sources. Our visualization applications enable data display in
real time on a single large multi-screen interface with three-dimensional features. Our solution provides intelligent data in an intuitive
and timely manner to enable the operators and decision makers to make informed decisions.</span></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"><b>&#160;&#160;</b></span></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"><b><i>Trade
Enterprise Solutions</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
provide&#160;<i>Trade Enterprise Solutions</i>&#160;to businesses, manufacturers and inward processed manufacturing companies involved
in global trade. Our solutions provide a suite of enterprise management applications that allow our customers to streamline their global
trade business and operations with features and functionalities including business and process operations, inventory and warehousing
control, project execution and management, customs clearance processing and all other compliance and logistics processing.</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"></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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inward
processed manufacturing companies use imported raw materials, components and parts, packing and other materials to produce finished products
for exporting. Inward processed manufacturing is a complicated and extended process that is highly regulated. We provide a series of
applications specific to inward processed manufacturing companies to help streamline and automate their operations with features and
functionalities including bonded goods verification, bonded logistics record keeping, digital manual processing and customs data management.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration:underline">Powerbridge
SaaS Services</span></i></b></span></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">&#160;</span></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"><b><i>Overview
of Powerbridge SaaS Services</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2016, we introduced&#160;<i>Powerbridge SaaS Services</i>&#160;(software-as-a-service) designed for corporate and government organizations
involved in global trade, including import and export businesses and manufacturers, government agencies and regulatory authorities, cross-border
eCommerce operators, as well as logistics and other service providers.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are designed to be deployed rapidly via internet browsers and mobile devices, and can be supported through designated data centers
and commercially available cloud platform services that provide infrastructure as a service for servers, storage, networking and database.</span></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">&#160;</span></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"><b><i>Strengths
of Powerbridge SaaS Services</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe our services encompass the following core advantages:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Lower total cost of
    ownership</i>. Unlike the traditional software model, our on-demand services enable our customers to have access anytime and anywhere
    without the upfront spending in software and hardware.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Rapid deployment and
    configuration</i>. Our services are designed to be deployed and configured rapidly through our application programming interfaces.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Flexible and scalable</i>.
    Our flexible and extensible architecture enables us to offer services that are scalable and adjustable to quickly address the different
    needs of our diverse group of customers.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Reliable and secure.</i>&#160;Our
    multi-tenant and microservice technology architectures allow us to design our services to provide our customers with a high level
    of performance, reliability and security.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Intuitive and ease of
    use.</i>&#160;Our services are designed be intuitive and easy to use with interfaces that are simple and user friendly. Our users
    are able to learn and use our services without specialized trainings.</span></td></tr>
  </table><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"><b><i>&#160;</i></b></span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></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"><b><i>Logistics
Service Cloud</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Logistics
Service Cloud</i>&#160;services are used by import and export logistics service providers such as freight forwarding agent companies
who organize and arrange for air, ocean or land shipments. Our services allow our logistics service customers to minimize paperwork handling,
reduce processing time, simplify workflow and increase performance efficiency by streamlining the import and export freight forwarding
process and by facilitating digital exchange of information and documents among all players engaged in the freight forwarding process.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services enable our customers to connect and synchronize with the applications and systems of cargo owners, cargo depots and terminals,
transportation and carrier companies and regional customs agencies for rapid exchange and sharing of information and data. Our customers
can complete the freight arrangement process to minimize paper document handling that is often tedious, error-prone and time consuming.
Electronic processing of customs declaration, reporting and approval through our data exchange system further expedites the freight forwarding
process.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are continually expanding the features and functionalities of our services to reach a broader range of our logistics service customers.
Our core services provide features and functionalities including digital document exchange and processing among freight forwarders, cargo
owners, cargo terminals, transportation carriers and local customs for a variety of tasks, including transport booking confirmation,
cargo manifests and waybills processing, cargo status reporting at regulated depots and terminals, unloading and loading reporting, document
receipt and message handling.</span></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"><i>&#160;</i></span></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"><b><i>Trade
Zone Operations Cloud</i></b></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
newly introduced&#160;<i>Trade Zone Operations Cloud</i>&#160;is designed for all businesses operating in regulated bonded and free trade
zones, including importers and exporters, manufacturers engaged in global trade, inward processed manufacturers, cross-border eCommerce
operators and logistics service providers as well as government zone management authorities. Our services are designed to enable businesses
to streamline their operations in the zones and allow authorities to effectively manage the zones. Our services are integrated with the
systems from businesses, government authorities, logistics service providers and other third parties.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Businesses
and logistics service providers use our services to run and manage their daily operational, compliance and logistics activities, including
commodity flows of bonded and non-bonded goods, operations record declaration and verification, goods display and business transaction,
bonded to non-bonded conversion, inward processed operations and materials management, zone in-and-out processing, cross-border eCommerce
operations and compliance as well as customs declaration and clearance processing.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are provided to government zone management and operating authorities as a supplement to their management and operations systems
for a variety of regulatory and management operations, including checkpoint verification and release, logistics planning and allocation,
contract and settlement management as well as document handling and performance data analysis. We are expanding our services using artificial
intelligence and IoT technologies and applications to enhance the government&#8217;s capabilities in checkpoint and zone security, vehicle
monitoring and control, and smart command operations.</span></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">&#160;</span></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"><b><i>Inward
Processed Manufacturing Cloud</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are developing our&#160;<i>Inward Processed Manufacturing Cloud</i>&#160;services designed for inward processed manufacturing and trade
companies who use imported raw materials, components and parts, packing and other materials to produce finished products for exporting.
Our services are being developed to allow our customers to streamline and optimize their logistics and compliance operations in bonded
or non-bonded environments. Our services are being designed to integrate with the systems from inward processed businesses, government
authorities and agencies, and logistics service providers. Our services have recently been made available to selected customers.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inward
processed manufacturing and trade businesses may use our services to perform a variety core logistics and compliance works, including
digital handbook and manual declaration, material and component usage management, customs code revision and update, ledger maintenance,
authorized economic operators services, production related work order based declaration, import and export customs declaration and processing,
bonded goods operations and compliance as well as material and warehousing logistics management.</span></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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are designed to connect and synchronize with regional customs and other authorities through their localized single window platforms,
customs compliance and clearance systems, and Chinaport systems and applications, allowing us not only service our inward processed and
trade businesses effectively, but also offer value-added services to the government authorities by streamlining the work order based
manufacturing data verification process as well as providing insightful inward processed manufacturing related operational and compliance
analytics using big data technologies.</span></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; font-size: 10pt">&#160;&#160;</span></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"><b><i>Cross-Border
eCommerce Cloud</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our&#160;<i>Cross</i>-<i>Border
eCommerce Cloud</i>&#160;is being developed for cross-border eCommerce operators, logistics service providers and payment and settlement
service providers for rapid and efficient handling of the import and export process for couriered consumer merchandise and products.
Our services are aimed at addressing the unique and challenging logistics, compliance and settlement needs of our customers, allowing
them to reduce workflow complexities, minimize processing time while increase customs clearance and overall productivity. Our services
have currently been available for Zhuhai-Macao cross border trade only and we have been working to realize the commercialization of our
cross-border eCommerce services.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are being designed to integrate with the platforms, systems and applications from all players involved in the cross-border eCommerce
process, including those from cross-border eCommerce operators, logistics service providers, payment and settlement service providers
as well as government agencies and authorities. Our services should enable the players to exchange and share information and data for
streamlining the cross-border process as well as to derive intelligent insight from the trade data for better performance and decision
making.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are being designed to encompass all core steps throughout the entire cross-border eCommerce process with features and functionalities,
including identity authentication of eCommerce operators, customs declaration and verification, merchandise inspection and approval,
data verification and exchange, customs clearance declaration and processing, logistics handling and tracking, compliance status inquiry
and notification via mobile devices, duty payment and tariff refund processing, government data analytics as well as regulatory information
announcements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration:underline">Powerbridge
BaaS Services</span></i></b>&#160;</span></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">&#160;</span></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"><b><i>Overview
of Powerbridge BaaS Services</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
began offering our cloud-based&#160;<i>Powerbridge BaaS Services</i>&#160;(blockchain-as-a-service) with designated use case for limited
government customer in June 2019 and generated approximately $0.7 million.in fiscal 2021 We continue developing our BaaS Services for
market commercialization. Blockchain technology is emerging as a major disruptive force across many industries, including those involved
in global trade. We believe that blockchain technology could allow our customers to conduct business in more synchronized and collaborative
ways to substantially increase operational efficiency and reduce trade costs across the global trade supply chain.&#160;<i>Powerbridge
BaaS Service</i>&#160;includes&#160;<i>Compliance Blockchain Services and Supply Chain Blockchain Services.</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"></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; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
blockchain technology-enabled compliance applications and services are designed to allow the customs agency to increase the effectiveness
of risk assessments and interventions in monitoring and controlling the flow of goods, documents, and vendors for cross border trade
events and transactions, with an enhanced level of regulatory information transparency and synchronization among customs agencies and
other government authorities.</span></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; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
trade is generally characterized by its extended workflows with complicated compliance and logistics processes, voluminous documentation
and time-consuming paper handling, cumbersome and costly peer-to-peer messaging and a great number of players from many different disciplines.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
estimated that a typical process for an export shipment in China may involve 1 exporter, 8 government agencies and authorities and 12
various logistics and financial service providers with more than 60 persons involved in 13 different work processes that generate more
than 55 trade compliance and logistics documents and 150 information or message exchanges.</span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Conventional
and traditional applications have enhanced the functional performance of global trade organizations, but are limited at establishing
trusted relationships, allowing transparency because of inconsistent information sharing, and enabling collaboration across organizational
boundaries among all players.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe blockchain technologies can not only address the shortfalls of conventional and traditional applications, but will disrupt the
global trade industry and change how global trade is conducted with a collaborative model that can drastically enhance overall efficiency
and reduce trade cost for all players in the global trade ecosystem.</span></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">&#160;</span></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"><b><i>Strengths
of Powerbridge BaaS Services</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are designing and developing our&#160;<i>Powerbridge BaaS Services</i>&#160;to provide corporate and government organizations involved
in global trade with significant improvements in workflow performance, reduction in document handling, optimization of synchronized peer-to-peer
exchange of information, and enhancement of overall productivity and efficiency, with the following potential core attributes and advantages:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Distributed and shared
    ledgers</i>&#160;of immutable data and records for transactions are on trusted and secured global trade blockchain networks that
    are made accessible only to permissioned trading partners and peers.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Encoded smart contract</i>&#160;execution
    are validated and automated based on pre-defined business rules and contractual conditions for global trade peer-to-peer transactions
    or executions that are authenticated and verifiable in real time.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>End-to-end visibility&#160;and
    transparency </i>throughout the global trade supply chain ensures real time exchange of events and documents among all trading parties
    and peers in the ecosystem.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Provenance and traceability</i>&#160;are
    enabled with time-stamped records or documents and immutable provenance records of import and export goods that ensure accuracy for
    audit and regulatory compliance purposes.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Extensible and interoperable</i>&#160;capabilities
    enable the blockchain networks to connect and integrate with multiple other blockchain networks and with applications and systems
    of the permissioned members.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Lower total cost of
    ownership</i>&#160;with services offered in the cloud with minimum investment in software and hardware for rapid deployment as well
    as intuitive, easy-to-use user interface on the internet and via mobile devices.</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"></p><div>

</div><!-- Field: Page; Sequence: 59; 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 -->54<!-- 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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
offer our cloud-based BaaS services through commercial cloud platform services that provide infrastructure as a service for servers,
storage, networking and database. We currently plan to generate our revenue on a subscription basis with single use, group and enterprise
editions and from professional service fees.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
began designing and developing our&#160;<i>Powerbridge BaaS Services</i>&#160;infrastructure and services in 2017. We have our own development
teams and work with third-party providers of infrastructure technologies. We recently introduced our services as pilot projects on a
limited basis to selected customers.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
used a portion of the proceeds from the IPO to accelerate our R&amp;D in order to expedite our service offerings to drive product adoption.
We believe our domain knowledge, product expertise and customer relationships will enable us to capture significant market share with&#160;<i>Powerbridge
BaaS Services. </i></span></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">&#160;</span></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"><b><i>Our
BaaS Services</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Corporate
and government organizations involved in global trade are facing increasing challenges with existing available technology and applications
which hinder their productivity and efficiency. Conventional and traditional applications are inadequate and ineffective in addressing
challenges which include:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Conventional and traditional
    software systems used by each global trade participant is largely disjointed with inefficient integration and synchronization.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information across organizational
    boundaries is inconsistent and not fully transparent with many &#8220;blind spots&#8221; on the global trade supply chain.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Peer-to-peer messaging
    or information exchanges among global trade players are complex, cumbersome, time-consuming and costly.</span></td></tr>
  </table><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;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Manual handling of paper-based
    global trade documents is time consuming, resource draining and error-prone.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Compliance risk assessment
    and control are ineffective and costly due to lack of sufficient and credible information.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe our&#160;<i>Powerbridge BaaS Services</i>&#160;will address the imminent challenges faced by corporate and government organizations
in global trade. Our services are being developed to offer potential benefits including:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trusted and secured blockchain
    networks where all permissioned players in the global trade ecosystem can synchronize and collaborate.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">End-to-end visibility and
    transparency of goods and documents throughout the global trade supply by all permissioned players.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Synchronized cross-organizational
    workflows and secured exchange of transaction events and messages among global trade players.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Digitized and automated
    exchange of global trade documents in real time with assurance of authenticity and immutability.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Enhanced compliance risk
    assessments with increased level of information transparency and assured provenance of import and export goods and services.</span></td></tr>
  </table><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>

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

</div><!-- Field: Page; Sequence: 60; 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 -->55<!-- 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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are provided as consortium blockchain networks designed for all players in the global trade ecosystem, including import and
export businesses and manufacturers, logistics service providers, financial service providers, and government agencies and authorities
with the following potential benefits to each group of players:&#160;</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Businesses can benefit
    from full transparency of a streamlined supply chain that allows for greater predictability, earlier detection of problems, enhanced
    inventory management and better overall resources allocation.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Logistics service providers
    can benefit from increased visibility on the supply chain, enhanced document processing and shorter processing time, improved service
    reliability and lower cost to trade businesses.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial service providers
    can benefit from increased visibility into key trade events which mitigate risks and increase assurances, and automated document
    exchange and processing for loan, insurance and settlement services.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Government agencies can
    benefit from enhanced monitoring and control on flow of goods, more effective risk assessments and interventions, increased sharing
    of information among agencies, and higher overall compliance efficiency.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Government authorities
    for trade zones and ports can benefit from increased operational efficiency driven by increased transparency, improved document flow
    and faster processing time, and higher throughput for goods and cargos.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are designed to be built on an open and extensible blockchain infrastructure. This will enable us to efficiently add and expand
our services over time. We intend to offer our services in sequence starting with regional or functional blockchain networks with fewer
players and gradually expanding to larger ones and eventually covering the entire global trade supply chain.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe this approach of targeting subsets of the global trade ecosystem by leveraging our deep domain knowledge and strong customer
relationships will allow us to continually test and fine-tune our services and incrementally drive product and market adoption which
may take considerable time and effort. We plan to initially offer the following services on a regional or functional basis:</span></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">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Compliance Blockchain
    Services</i>&#160;are intended for government agencies including customs, inspections and quarantines, cross-border control, maritime
    affairs, foreign exchange, tax and duty, and trade commerce, and government authorities such as free trade and bonded trade zone
    authorities, port and terminal authorities and operators, and other trade regulated zone authorities. Our services will provide multiple
    government agencies and authorities a single view of trade events and documents on designated global trade blockchain networks, which
    allow them to synchronize and streamline their regulatory compliance activities with enhanced compliance effectiveness and operational
    efficiency.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Government
agencies will be able to use our services to increase the effectiveness of risk assessments and interventions in monitoring and controlling
the flow of goods and documents with increased level of transparency and assurance of provenance. Trade zone and port authorities will
be able to increase their service and operations efficiency with enhanced transparency and visibility, faster processing time and higher
cargo throughput. Our blockchain services will be capable of integrating with the software systems from government agencies and authorities
for real time monitoring and synchronization and from global trade businesses and logistics service providers for the government agencies
and authorities to better service them.</span></p><div>




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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Logistics Blockchain
    Services</i>&#160;are being designed for businesses and manufactures involved in global trade as well as customs and freight forwarding
    service providers. The customs and freight forwarding processes are complicated and cumbersome with multiple parties involved and
    many voluminous documents to handle. Customs and freight forwarders represent the businesses to take on a number of tasks including
    making import and export declarations with customs and inspection agencies, arranging for cargo shipments with the shippers and carriers,
    and handling logistics and compliance works in the regulated trade zones. These processes generate large sets of documents and require
    constant communication among the involved parties.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services will allow all involved participants operating in the customs and freight forwarding process to better connect and synchronize
on the blockchain networks. Our customers will use our services to streamline cross-organizational workflows and have real time access
to monitor and manage progress throughout the process. Our blockchain networks will be capable of connecting and integrating with the
software systems from permissioned trade businesses and logistics service providers, with features and functionalities including automated
contract execution, expedited service remittance, streamlined document handling, and synchronized information exchange.</span></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">&#160;</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Supply Chain Blockchain
    Services</i>&#160;are being designed to provide end-to-end visibility and transparency to all stakeholders or players throughout
    the cross-border global trade supply chain, including import and export businesses and manufacturers, logistics service providers,
    transportation shippers and carriers, financial service providers, insurance companies, settlement service providers, government
    agencies and authorities, and all other players. Our services will enable real time sharing of trade data and events on distributed
    and trusted blockchain networks for broad synchronization and collaboration among all players in the global trade ecosystem in which
    the entire trade process is facilitated and optimized.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services will provide secured information and message exchanges on the blockchain networks that enable all players to have real time
access to flows of documents and goods along the supply chain, allowing them to synchronize and collaborate across organizational boundaries
in order to efficiently handle the complicated and cumbersome compliance and logistics processes. Our customers can use our services
to track goods and documents, identity and manage milestone exceptions, trace the provenance of goods, and share information with their
trade partners and customers. We intend to first offer our services in China and subsequently expand to integrate the international players
on the global trade supply chain.</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Import &amp; Export
    Loan and Insurance Processing Blockchain Services</i>&#160;are being designed for businesses and financial service providers involved
    in global trade. Our blockchain services will empower businesses with easier and faster processing for loans, insurance and settlements
    with lower financing cost. Financial service providers can have improved visibility on key events on the blockchain-enabled trade
    supply chain, resulting in better and more assured loan decisions that mitigate financing risks. Insurance companies and settlement
    service providers will be able to issue trade insurances and provide settlement services with more streamlined workflows and higher
    processing efficiency with our blockchain services.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Through
our services, transaction events or activities among businesses on the global supply chain, such as sales and invoicing, purchasing and
ordering, and shipping and receiving are programmed or encoded with pre-defined business rules and contractual conditions, allowing for
validated and automated transactions to occur. These transaction events and records on the secured blockchain networks will be authenticated
and time-stamped, thus bringing substantial proof and immutable evidence to the financial service providers for effective credit and
risk assessment when offering their loans and other services to the businesses.</span></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">&#160;</span></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"><b>Our
Technology</b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
solutions and services are built from our multiple proprietary technology platforms which are developed based on industry leading open-source
infrastructure technologies. Our technology platforms are designed for high performance reliability, flexibility and scalability, allowing
us to expand our solutions and services rapidly and efficiently to consistently address the needs of our global trade customers.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
technology platforms include&#160;<i>Powerbridge System Platform</i>&#160;for our&#160;<i>Powerbridge Digital Solutions</i>,&#160;<i>Powerbridge
SaaS Platform&#160;</i>for our&#160;<i>Powerbridge SaaS Services</i>, and&#160;<i>Powerbridge BaaS Platform</i>&#160;for our&#160;<i>Powerbridge
BaaS Services</i>.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are developing our own technologies as well as working with other third-party technology infrastructure partners to expand the scope
of our solutions and services with the best use of big data, artificial intelligence and Internet of Things.</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"></p><div>

</div><!-- Field: Page; Sequence: 62; 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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Powerbridge
System Platform</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Powerbridge
System Platform</i>&#160;is our proprietary technology platform from which we develop our&#160;<i>Powerbridge Digital Solutions</i>.
Our platform is built on Java Spring and Microsoft Net frameworks as well as other open source technologies.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Powerbridge
System Platform</i>&#160;consists of modular technology and business components that enable us to provide mission critical applications
and solutions in trade operations, trade logistics and regulatory compliance to our corporate and government customers. Our platform&#8217;s
core capabilities include:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Scalable Modular Architecture</i>.
    Our scalable architecture consists of a robust set of modular technology and business components that allows for rapid and efficient
    development and deployment to support complex mission-critical business processes and transactions in global trade.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Flexible Configuration
    Modeling</i>. Leveraging our deep domain knowledge, product expertise and customer experience in global trade applications, we have
    developed a flexible system configuration modeling that minimize development resources and time without repetitive coding for common
    or special business and operations use cases.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Reliable Enterprise
    Grade Performance</i>. Our platform provides the infrastructure for reliable and high performance that can be built with multiple
    programing languages, support all commonly used databases, operate with web browser/server or client/server models, and generate
    dynamic interactive user interfaces.</span></td></tr>
  </table><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"><i>&#160;</i></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Diverse Industry Applications
    Supported.&#160;</i>Our platform supports product applications and system solutions that are used by global trade businesses in a
    wide variety of industries such as automotive, pharmaceutical and consumer goods and involving different government agencies and
    authorities.</span></td></tr>
  </table><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"><b><i>&#160;</i></b></span></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"><b><i>Powerbridge
SaaS Platform</i></b></span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Powerbridge
SaaS Platform</i>&#160;is built based on the open source Spring Cloud and other industry leading technologies for developing, deploying
and operating our software-as-a-service. It is capable of running in multiple designated data centers and cloud environments on commercially
available infrastructure as a service platform.</span></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"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Powerbridge
SaaS Platform</i>&#160;is the technology infrastructure upon which we are developing our&#160;<i>Powerbridge SaaS Services</i>&#160;designed
to provide on-demand services in trade operations, trade logistics and regulatory compliance with a multi-tenant and microservice architecture.
Our core technology capabilities include:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Secured Multi</i>-<i>Tenant
    Architecture</i>. Our multi-tenant architecture is designed to operate a single instance of a software application simultaneously
    for multiple organizations or tenants. Each tenant is operating in virtual isolation from each other. Our multi-tenancy architecture
    ensures and maintains data security and integrity for our customers.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Scalable Microservice
    Architecture</i>. Our microservice architectural approach allows us to provide scalable and reliable application services as a suite
    of independently deployable, modular services in which each service can run a unique business or transaction process based on a lightweight
    mechanism with well-defined business rules and logic.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Ease of Integration
    and Configuration</i>. We provide a set of application programming interfaces that is designed to enable our customers to integrate
    and configure our services quickly and seamlessly with their systems and applications, as well as with third-party&#8217;s systems.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Extensible Technology
    Platform</i>. Our application services are built on a single platform that leverages the shared business and technology components,
    enabling us to rapidly expand our product features and functionalities without disruption and seamlessly integrate our services with
    one another.</span></td></tr>
  </table><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>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are designing and developing our proprietary&#160;<i>Powerbridge BaaS Platform</i>&#160;based on the open source Hyperledger Fabric framework
and other third-party frameworks that provide the blockchain infrastructure for shared ledger, smart contract, consensus algorithm, distributed
storage, encryption and security, and network operations.&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Powerbridge
BaaS Services</i>&#160;are built on top of our blockchain platform that is designed to provide high scalability and performance characteristics,
consisting of multiple technology engines that support the various business component models specific for trade transaction, trade logistics
and regulatory compliance in global trade:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Smart Contract Engine</i>&#160;is
    designed to provide a complete and automated blockchain service for the coding, registering, authorizing, releasing, triggering,
    executing, updating and cancelling of the business contracts or transactions based on pre-defined contractual conditions or pre-defined
    business rules that are encoded into the smart contracts between trading or transactional parties.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Member Service Engine</i>&#160;is
    intended for authenticating and managing the identity of the blockchain network members or participants with encrypted public or
    private key generation and maintenance as well as managing member accounts, maintaining multi-level permission access control and
    conducting risk monitoring and compliance auditing on selective member transactions.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Network Service Engine</i>&#160;is
    designed for managing network connectivity with applications, programing interfaces and structured query languages, member consensus
    via consensus algorithms and permission mechanisms, secured and authenticated peer-to-peer data transmissions and exchanges, and
    transaction record storage with key value and Merkel hash value on distributed shared ledgers and/or in cloud-based database environments.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Network Operations Engine</i>&#160;is
    intended to monitor, manage and maintain the blockchain network operations, including network configuration, throughput and time
    consumption, hardware resource and allocation, fraud and emergency situation detection, network system update and announcement, and
    other network functions and operations as well as network performance and trend analysis and reporting.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are continuing to enhance the technology capabilities of&#160;<i>Powerbridge BaaS Platform&#160;</i>while it is under development. We
believe our platform offers all the governance and operations benefits derived from blockchain technology with the following differentiated
and distinctive advantages:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Global Trade Centric
    Business Components.&#160;</i>We believe our domain knowledge, product expertise and customer experience will allow us to develop
    a platform that forms a strong and powerful foundation for continually offering and expanding our services to drive product adoption
    with this new and exciting technology.</span></td></tr>
  </table><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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
BaaS services will be supported by our business components which are stacked on top of and driven by our technology engines. Our business
components will include trade transaction, trade operations, trade logistics and regulatory compliance, which are designed to address
the mission critical needs of global trade businesses, government agencies and authorities, and logistics and other service providers
with comprehensive services from document handling to customs processing and to transaction processing.</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Data Separation Modeling.&#160;</i>Global
    trade transaction processes typically generate voluminous data to which organizations have different needs and ways to handle them.
    Some organizations may choose not to have their sensitive data stored on the blockchain networks. We are developing a data separation
    model that can allow data to be recorded and stored on the shared ledgers, but also have more sensitive data securely stored off
    the blockchains, which has the added benefit of minimizing data storage space.</span></td></tr>
  </table><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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
intend to further separate the smart contract blockchains and workflow blockchains. Smart contract blockchains and the corresponding
contract codes and hash values are recorded and stored on the shared ledgers as the contract codes can be called and used for numerous
times. Data generated from the workflow blockchains and the smart contract blockchains can be designated as on or off the shared ledgers.
This further ensures data security and reduce data storage on the blockchains.</span></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">&#160;</span></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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Other
Technologies and Applications</i></b>&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
intend to continue leveraging our industry expertise and product knowledge with the use of disruptive technologies such as big data,
artificial intelligence and Internet of Things to enhance our core technology capabilities and continually increase the scope of our
solutions and services to our customers.</span></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">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Big Data</i>. We are
    developing our big data technology and applications designed to acquire, store, process, analyze and visualize large scaled structured
    and unstructured global trade transaction and compliance data. Our technology is intended to augment our solutions and services in
    trade operations, trade logistics and regulatory compliance in global trade, including regulatory risk control, compliance command
    operations, cross-border trades and processing, logistics matching services, among others.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
intend to use ETL (extract, transform and load) technologies for acquiring and processing massive volumes of data such as customs declarations
and shipping manifests from various government and commercial sources. We intend to build our big data platform based on a distributed
data warehouse architecture using the open source Hadoop and Spark frameworks, allowing for high performance in multi-dimensional correlation
analytics, real-time complex event processing, and distributed data query and retrieval.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
correlation analytics are being designed for multi-dimensional and real-time correlation of large quantities of structured, semi-structured
and unstructured data from different data sources. Our complex event processing technology is designed to monitor and track data relating
to events as they occur in real time and provide data insights based on pre-defined business rules. Our data query and retrieval are
intended to support query and retrieval from multiple data sets and provide multi-dimensional data displays.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
data visualization and interactive data mining technologies is designed to provide intuitive and interactive visualization tools and
dashboards that are easy to use and can be customized for displaying critical business performance data or metrics. Our visualization
tools and dashboards are designed to support interactive data mining and a variety of display formats including charts, graphs and tables
as well as three-dimensional displays and geographic information system mappings.</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Artificial Intelligence</i>.
    We work with third party artificial intelligence technology providers to enhance our solutions and services in global trade. Our
    artificial intelligence applications facilitate and support biometric facial and fingerprint recognitions as well as object recognition
    for transportation vehicles and shipping containers. We plan to develop our machine learning capabilities to provide optimized matching
    and recommendation services for global trade logistics and processing.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
biometric face recognition application is used for security and enforcement measures typically at checkpoints of cross-border trade operations
and regulated trade zone facilities for identifying and verifying a person from a digital image or a video frame by comparing distinct
facial features with given facial images extracted from our database. Our applications are designed to support concurrent processing
of multiple persons. Our fingerprint recognition application is also applied for security measures in some cross-border trade settings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
object recognition application is designed to identify and verify transportation vehicles at ports and terminals, regulated trade zones
and cross-border checkpoints by capturing, processing, and identifying still images and video images. Further, through machine learning
computation, transportation vehicles in these facilities can be automatically directed with optimized routes to their designated destinations
such as a warehouse or a container depot.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
plan to enhance our technology capabilities in machine learning algorithms that learn from experience, identify patterns and make predictions
driven by a large set of global trade data. We intend to leverage our domain knowledge and industry experience to design and develop
machine learning algorithms and distributed computing that can optimize the efficiency in the matching of trade logistics services among
trade businesses and service providers.</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"></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Internet of Things.&#160;</i>Internet
    of Things (&#8220;IoT&#8221;) refers to the network of physical objects embedded with sensors, electronics, and network connectivity
    that allow these objects to collect and exchange data. We work with third-party technology companies to provide IoT applications
    to process, store, and analyze IoT data from trade related trucking vehicles, weighting stations, and shipping containers. Our applications
    are integrated with the target object&#8217;s IoT systems and software systems of government authorities.</span></td></tr>
  </table><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;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trucking
vehicles, weighting stations and shipping containers are tightly regulated at ports and terminals, regulated trade facilities and cross-border
facilities. Our IoT applications are used by government authorities to monitor and control these objects. Our applications are able to
authenticate objects, facilitate data exchanges, connect through gateways and application programming interfaces, and provide event-based
IoT data processing, analysis and visualization.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
IoT applications allows fast and accurate identification of trucking vehicles as they pass through the checkpoints at regulated areas
with a high throughput capacity and rapid data transmission, which facilitates efficient control and fast checkpoint release. Our IoT
applications can combine with the use of global positioning systems, global system for mobile communication and global information system
to enable government authorities complete monitoring and control of the trucking vehicles.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; 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 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
IoT applications are capable of acquiring and processing a high volume of IoT enabled data from radio frequency identification and other
types of sensor devices installed on intermodal shipping containers operating in many different trade facilities or settings such as
container yards, shipping ports, bonded warehouses and air terminals. Our IoT applications can also process IoT data from electronic
locks on the containers for automated container lock handling.</span></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">&#160;</span></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"><b>Our
Customers</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
customers are international trade businesses and manufacturers, government agencies and authorities, logistics service and other providers,
primarily located in China.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
international trade business and manufacturer customers are import and export companies, manufacturers engaged in import and export,
inward processed manufacturers who use imported raw materials, components and parts, packing and other materials to produce finished
products for exporting, and cross-border eCommerce operators who conduct cross-border business for air packaged consumer products.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
government customers are provincial and regional government agencies, government authorities and government-owned organizations. Government
agencies include customs, inspection and quarantine, border enforcement, maritime affair, transportation and commerce. Government authorities
include authorities for ports, bonded and free trade zones and government-owned organizations include Chinaport and other international
trade related organizations.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
logistics service and other provider customers include freight forwarding and shipping agent firms, customs and inspection brokers, warehouse
operators, transportation companies and other international trade related service organizations as well as financial and insurance service
providers engaged in global trade services.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
customers include (i) international trade businesses and manufacturers; (ii) government agencies and authorities; and (iii) logistics
and other various service providers.</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"></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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
plan to expand our market coverage to international markets to service customers in different B&amp;R countries. We also intend to provide
our solutions and services to corporate and government customers in the countries or markets we intend to target.</span></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">&#160;</span></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"><b>Sales
and Marketing</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
sales and marketing teams work closely together to drive market awareness, develop and manage leads, and develop and build customer relationships
to increase revenue growth. We sell our solutions and services to corporate and government customers through our direct sales organization,
indirect channel partners and strategic government partners.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
sales team is organized by customer type and geography. Our direct sales force is supported by sales engineers and service consultants.
Our indirect channel partners include value added resellers, system integrators, software and application providers, system hardware
providers and other referral partners. As of the date of this Annual Report, our sales teams consisted of 17 full-time sales and marketing
personnel. During fiscal years 2022, 2021 and 2020, our sales and marketing expense were approximately $2.0 million, $2.8 million and
$2.7 million, respectively, representing 18.7%, 8.6% and 10.0% of our total revenues for fiscal years 2022, 2021 and 2020, respectively.</span></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; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
generate customer leads, accelerate sales opportunities and build brand awareness through our marketing programs. Our marketing programs
target management and technology executives of global trade businesses, government agencies and authorities, and various service providers,
including user conferences, sponsored events and product promotions.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
continue to develop strategic partnerships with provincial and local government agencies, technology organizations, trade zone authorities
and other government organizations, i.e., regional customs and commerce agencies, bonded and other trade facilities, and Chinaport and
other state-owned entities, to drive sales by leveraging their strengths and resources in targeted customer base, strong regional market
influence and extensive government and industry resources.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
part of our overall strategy, we plan to expand into international markets to provide global trade software solutions and services by
&#8220;piggybacking&#8221; with the infrastructure builders and other Chinese organizations who participate in the B&amp;R&#8217;s development
of global trade infrastructures in the B&amp;R partnering countries.</span></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">&#160;</span></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"><b>Research
and Development (&#8220;R&amp;D&#8221;)</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
R&amp;D organizations consist of dedicated engineering and technology employees, who are responsible for the design, development, testing
and delivery of all aspects of our technologies, solutions and services. As of the date of this Annual Report, our team consists of 90
full-time R&amp;D personnel. We incurred expenses of $3,459,987, $2,611,742 and $2,780,944 in R&amp;D in fiscal year 2022, 2021 and 2020,
respectively.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
majority of our R&amp;D team is based in our Zhuhai office and to a lesser degree in our branch offices. Our team is further apportioned
into smaller agile development groups to foster continuous innovation and rapid delivery.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe we have a strong R&amp;D culture that rapidly and consistently delivers high quality products. We plan to continue to invest
substantial resources in R&amp;D to drive core technology innovation and bring new solutions and services to market.</span></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">&#160;</span></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 -->62<!-- 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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Competition
</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market for global trade software application and system integration services is highly competitive and fragmented. We face intensive
competition. Our main sources of current and potential competition fall into the following categories:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Regional global trade application
    providers offering regulatory compliance, trade logistics and trade processing software and systems.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Software vendors providing
    online or cloud-based single point or single feature functional global trade application products and services.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Online global trade hubs
    or portals offering specific global trade transactional and processing application products and services.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Enterprise resource planning,
    supply chain and logistics software application companies offering global trade software, systems and services.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Government organizations
    providing global trade related regulatory compliance and trade logistics applications and systems.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging blockchain, artificial
    intelligence and IoT technology providers offering technologies and software for global trade applications.</span></td></tr>
  </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: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe the following competitive attributes are necessary for us to compete successfully in our industry:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deep domain knowledge,
    industry experience and product expertise in global trade software applications and system integration to address customer needs.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Enablement of emerging
    and disruptive technologies to develop and provide global trade software applications and services.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Enterprise grade performance
    level in scalability, reliability and security as well as cost of ownership and ease of deployment.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Breadth, depth and quality
    of application features and functionalities that are able to operate in multiple infrastructures such as in cloud, on premises or
    both.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Capability of technology
    platforms in integrating and interoperating with legacy and other enterprise infrastructures and third-party applications.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Strength of sales and marketing
    as well as customer support in service responsiveness and level of customer satisfaction.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Brand awareness and reputation,
    size of customer base and level of user adoption to new and disruptive technologies and applications.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ability to capture market
    share in China and expand into international markets to operate as a global player in servicing multiple markets and countries.</span></td></tr>
  </table><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>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe we compete favorably on the basis of the competitive factors listed above. Some of our competitors have substantially greater
financial, technical and other resources, greater name recognition, larger sales and marketing budgets, broader distribution channels
and larger or more intellectual property portfolios.</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"></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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Intellectual
Property </b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC has domestic laws for the protection of rights in copyrights, trademarks and trade secrets. The PRC is also a signatory to all of
the world&#8217;s major intellectual property conventions, including:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Convention establishing
    the World Intellectual Property Organization (June 3, 1980);</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Paris Convention for the
    Protection of Industrial Property (March 19, 1985);</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Patent Cooperation Treaty
    (January 1, 1994); and</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Agreement on Trade-Related
    Aspects of Intellectual Property Rights (November 11, 2001).</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC Trademark Law, adopted in 1982 and revised in 2013, with its implementation rules adopted in 2014, protects registered trademarks.
The Trademark Office of the State Administration of Industry and Commerce of the PRC, handles trademark registrations and grants trademark
registrations for a term of ten years.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely on a combination of trademark, fair trade practice, copyright and trade secret protection laws and patent protection in China and
other patent jurisdictions, as well as contractual restrictions, to protect our intellectual property. We entered into comprehensive
confidentiality agreements with our management and consultants. We have standard confidentiality terms with all other employees. We also
control access to and distribution of our documentation and other licensed information.</span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Despite
our efforts to protect our proprietary technology and our intellectual property rights, unauthorized parties may attempt to copy or obtain
and use our technology to develop applications with the same functionality as our products. Policing unauthorized use of our technology
and intellectual property rights is difficult. Our patent applications may not issue as patents, and if they do issue as patents, they
may not provide meaningful protection against competitors. We expect that software in our industry may be subject to third-party infringement
claims as the number of competitors grows and the functionality of applications in different industry segments overlaps. Any of these
third parties might make a claim of infringement against us at any time. We require our employees to enter into non-disclosure agreements
to limit access to and distribution of our proprietary and confidential information. These agreements generally provide that any confidential
or proprietary information developed by us or on our behalf must be kept confidential. These agreements also provide that any confidential
or proprietary information disclosed to third parties in the course of our business must be kept confidential by such third parties.
In the event of trademark infringement, the State Administration for Industry and Commerce has the authority to fine the infringer and
to confiscate or destroy the infringing products.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this Annual Report, we have 13 registered patent, 125 registered software copyrights and 23 registered trademarks in the&#160;PRC.
In addition, we own 11 URL designations and domain names, including powerbridgetech.com, powerstreamdigital.com, metafusiondigital.com,
powermetadigital.com, powercrypto.pro, pbts.cloud, pbtyun.com, pbtcloud.com, cs-estone.com, erp-china.com, and powerbridge.com.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not have applications pending in any jurisdiction other than China. We do not know if these applications will be granted as patents,
and if they are granted as patents whether they will provide meaningful protection against their party competitors.</span></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">&#160;</span></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"><b>Facilities</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
purchased one real property in 2021 with an aggregate contract amount of RMB 30,678,302 for our new headquarter office location (&#8220;Zhuhai
HQ Office&#8221;), which was fully paid as of December 31, 2022. Zhuhai New Office with space totaling 1820 m<sup>2</sup>, located in
Floor 8<sup>th</sup> and 9<sup>th</sup>, C2 Building, Advance Business Park, No.29 Lanwan Road, Tangjia Bay, Xiangzhou District, Zhuhai,
China, has been put into use in August 2022. We intend to procure additional space as we add employees and expand geographically. We
believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative
space will be available to accommodate any such expansion of our operations. As of the date of this Annual Report, we maintain the following
facilities in China. In addition to our headquarters, we lease space in Zhuhai, Wuhan, Changsha, Nanning, and Hangzhou. Rent expenses
amounted to $162,799, $307,497 and $305,832 for the years ended December 31, 2022, 2021 and 2020, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"></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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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="font-weight: bold; border-bottom: Black 1.5pt solid">Facility</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Address</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Space (&#13217;)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; width: 19%; text-align: left">Wuhan Office</td><td style="width: 1%">&#160;</td>
    <td style="width: 59%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rm F, 25<sup>th</sup> Fl West, No.562, Construction Avenue (Guomao Xindu), Jianghan, Wuhan, Hubei, China</span></td><td style="width: 1%">&#160;</td>
    <td style="width: 20%; text-align: center">167</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">Changsha Office</td><td>&#160;</td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rm 1608, 16<sup>th</sup> Fl, Block C3, Wanda Plaza, No. 589 Zhongshan Road, Kaifu, Changsha, Hunan 410015, China</span></td><td>&#160;</td>
    <td style="text-align: center">351</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">Nanning Office</td><td>&#160;</td>
    <td style="text-align: left"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Suite 2206-2209, 22<sup>nd </sup>Fl, Block 2, 118 Dongge Road</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Qingxiu, Nanning, Guangxi 530012, China</span></p></td><td>&#160;</td>
    <td style="text-align: center">389</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">Hangzhou Office</td><td>&#160;</td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rm 616, Jiang Tai Jing 3<sup>rd</sup> Building, Xihu District, Hangzhou</span></td><td>&#160;</td>
    <td style="text-align: center">35</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">Zhuhai HQ Office</td><td>&#160;</td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8<sup>th</sup> and 9<sup>th </sup>Fl, C2 Building, Advance Business Park, No.29 Lanwan Road, Tangjia Bay, Xiangzhou District, Zhuhai, China</span></td><td>&#160;</td>
    <td style="text-align: center">1820</td></tr>
  </table><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>

</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"><b>Employees</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this Annual Report, we had a total of 177 full-time employees, of which 90 are in research and development, 17 are in
sales and marketing, 38 are in technical and customer services, and 32 are in general administration.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have standard employment, comprehensive confidentiality and non-compete agreements with our management and standard confidentiality and
non-compete terms with all other employees. As required by laws and regulations in China, we participate in various social security plans
that are organized by municipal and provincial governments, including pension insurance, medical insurance, unemployment insurance, maternity
insurance, job-related injury insurance and housing fund. We are required by PRC laws to make contributions to employee social security
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.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that we maintain a good working relationship with our employees, and we have not experienced any labor disputes. None of our
employee is represented by a labor union or covered by collective bargaining agreements. We have not experienced any work stoppages.</span></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">&#160;</span></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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Legal
Proceedings</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We
are not currently a party to any legal proceedings that in the opinion of the management, if determined adversely to us, would have a
material adverse effect on our business, financial condition, operating results or cash flows. Regardless of the outcome, litigation
can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.&#160;&#160;&#160;&#160;</span></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">&#160;</span></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>Government
Regulation Relating to Our Business</b></span></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>&#160;</b></span></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"><i>Regulations
Related to Foreign Investment</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment
activities in China by foreign investors are principally governed by the Catalogue for the Guidance of Foreign Investment Industries,
which was promulgated by MOFCOM and the National Development and Reform Commission, as amended from time to time. Industries listed in
the catalogue are divided into three categories: encouraged, restricted and prohibited. Industries not listed in the catalogue are generally
open to foreign investment unless specifically restricted by other PRC regulations. Establishment of wholly foreign-owned enterprises
is generally allowed in encouraged industries. For some restricted industries, foreign investors can only conduct investment activities
through equity or contractual joint ventures, while in some cases PRC partners are required to hold the majority interests in such joint
ventures. In addition, projects in the restricted category are subject to higher-level governmental approvals. Foreign investors are
not allowed to invest in industries in the prohibited category.</span></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"><i>&#160;&#160;</i></span></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"><i>Regulations
Relating to PRC Information Technology Service Industry</i></span></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"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the Catalog on Foreign Invested Industries (2017 Revision) issued by the National Development and Reform Commission and the Ministry
of Commerce, IT services fall into the category of industries in which foreign investment is encouraged. In 2018, The National Development
and Reform Commission and the Ministry of Commerce launched Special Administrative Measures for Access of Foreign Investment (Negative
List) (Version 2018)(&#8220;the 2018 Negative List&#8221;) to replace part of the Catalog on Foreign Invested Industries (2017 Revision)
in respect of the category of industries in which foreign investment is restricted or prohibited, and foreign investment in IT services
is neither restricted nor prohibited according to the 2018 Negative List. The State Council has promulgated several notices since 2000
to launch favorable policies for IT services, such as preferential tax treatments and credit support.</span></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; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
rules and regulations promulgated by various Chinese government agencies, enterprises that have met specified criteria and are recognized
as software enterprises by the relevant government authorities in China are entitled to preferential treatment, including financing support,
preferential tax rates, export incentives, discretion and flexibility in determining employees&#8217; welfare benefits and remuneration.
Software enterprise qualifications are subject to annual examination. Enterprises that fail to meet the annual examination standards
will lose the favorable enterprise income tax treatment. Enterprises exporting software or producing software products that are registered
with the relevant government authorities are also entitled to preferential treatment including governmental financial support, preferential
import, export policies and preferential tax rates.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Companies
in China engaging in information systems integration were used to be required to obtain qualification certificates from the Ministry
of Industry and Information Technology. &#8220;Information systems integration&#8221; means plan, design, development, implementation,
service and safeguard of computer system and network system. Currently the Company does not engage in information system integration
business, therefore the Company is not required to have such qualification certificates. Companies planning to set up computer information
systems may only retain systems integration companies with appropriate qualification certificates. The qualification certificate is subject
to review every two years and is renewable every four years. In June 2015, the China Information Technology Industry Federation (CITIF)
promulgated the Appraisal Condition for Qualification Grade of Information Systems Integration (Provisional) to elaborate the conditions
for appraising each of the four qualification grades of systems integration companies. Companies applying for qualification are graded
depending on the scale of the work they undertake. The grades range from Grade 1 (highest) to Grade 4 (lowest) in the scale of the work
the respective companies can undertake.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2009, the Ministry of Commerce and the Ministry of Industry and Information Technology jointly promulgated a rule aiming to protect a
fair competition environment in the PRC service outsourcing industry. This rule requires that each of the domestic enterprises which
provides IT and technological BPO services and each of its shareholders, directors, supervisors, managers and employees should not violate
the service outsourcing contract to disclose, use or allow others to use the confidential information of its customer. Such enterprises
are also required to establish an information protection system and take various measures to protect customers&#8217; confidential information,
including causing their employees and third parties who have access to customers&#8217; confidential information to sign confidentiality
agreements and or non-competition agreements.</span></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">&#160;</span></p><div>

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</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"><i>Regulations
Related to Labor and Social Security</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Labor Law, promulgated by National People&#8217;s Congress in January 1995, and the Labor Contract Law, promulgated by Standing
Committee of the National People&#8217;s Congress in June 2007 and amended in December 2012, employers must execute written labor contracts
with full-time employees. If an employer fails to enter into a written employment contract with an employee within one year from the
date on which the employment relationship is established, the employer must rectify the situation by entering into a written employment
contract with the employee and pay the employee twice the employee&#8217;s salary for the period from the day following the lapse of
one month from the date of establishment of the employment relationship to the day prior to the execution of the written employment contract.
All employers must comply with local minimum wage standards. Violation of the Labor Law and the Labor Contract Law may result in the
imposition of fines and other administrative and criminal liability in the case of serious violation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 28, 2012, the PRC Labor Contract Law was amended with effect on July 1, 2013 to impose more stringent requirements on labor
dispatch. Under such law, dispatched workers are entitled to pay equal to that of full-time employees for equal work, but the number
of dispatched workers that an employer hires may not exceed a certain percentage of its total number of employees as determined by the
labor administrative department of the State Council. Additionally, dispatched workers are only permitted to engage in temporary, auxiliary
or substitute work. According to the Interim Provisions on Labor Dispatching promulgated by the Ministry of Human Resources and Social
Security on January 24, 2014, which became effective on March 1, 2014, the number of dispatched workers hired by an employer shall not
exceed 10% of the total number of its employees (including both directly hired employees and dispatched workers). The Interim Provisions
on Labor Dispatching require employers which are not in compliance with the PRC Labor Contract Law in this regard to reduce the number
of its dispatched workers to below 10% of the total number of its employees prior to March 1, 2016. In addition, an employer is not permitted
to hire any new dispatched worker until the number of its dispatched workers has been reduced to below 10% of the total number of its
employees.</span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Enterprises
in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance funds,
namely a pension 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, and contribute to the plans or funds in amounts equal to certain percentages of salaries
of the employees as specified by the local government from time to time at locations where they operate their businesses or where they
are located. According to the Social Insurance Law, an employer that fails to make social insurance contributions may be ordered to rectify
the noncompliance and pay the required contributions within a stipulated deadline and be subject to a late fee of up to 0.05% or 0.2%
per day, as the case may be. If the employer still fails to rectify the failure to make social insurance contributions within the stipulated
deadline, it may be subject to a fine ranging from one to three times the amount overdue. According to the Regulations on Management
of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the
required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement.
Our PRC operating entities have not made adequate employee benefit payments and we may be required to make up the contributions for these
plans as well as to pay late fees and fines. See &#8220;Risks Related to Doing Business in China - Failure to make adequate contributions
to various mandatory social security plans as required by PRC regulations may subject us to penalties&#8221;.</span></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">&#160;</span></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"><i>Regulations
on Intellectual Property Rights</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC Copyright Law, as amended, together with various regulations and rules promulgated by the State Council and the National Copyright
Administration, protect software copyright in China. These laws and regulations establish a voluntary registration system for software
copyrights administered by the Copyright Protection Center of China. Unlike patent and trademark registration, copyrighted software does
not require registration for protection. Although such registration is not mandatory under PRC law, software copyright owners are encouraged
to go through the registration process and registered software may receive better protection. The PRC Trademark Law, as amended, together
with its implementation rules, protect registered trademarks. The Trademark Office of the State Administration for Industry and Commerce
handles trademark registrations and grants a renewable protection term of 10 years to registered trademarks.</span></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">&#160;&#160;</span></p><div>

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</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>

</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"><i>Regulation
of Foreign Currency Exchange and Dividend Distribution </i></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Foreign
Currency Exchange.</span> The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration
Regulations, most recently amended in August 2008. Payments of current account items, such as profit distributions and trade and service-related
foreign exchange transactions, can usually be made in foreign currencies without prior approval from the State Administration of Foreign
Exchange, or SAFE, by complying with certain procedural requirements. By contrast, approval from or registration with appropriate governmental
authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such
as the repayment of foreign currency-denominated loans.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 30, 2015, SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming the Management Approach regarding
the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or SAFE Circular 19. Pursuant to SAFE Circular 19, the foreign
exchange capital of foreign-invested enterprises is subject to the discretional foreign exchange settlement, which means the foreign
exchange capital in the capital account of foreign-invested enterprises upon the confirmation of rights and interests of monetary contribution
by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) may be settled at the banks
based on the actual operation needs of the enterprises. The proportion of discretionary settlement of foreign exchange capital of foreign-invested
enterprises is currently 100%. SAFE can adjust such proportion in due time based on the circumstances of international balance of payments.</span></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">&#160;<b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
dividends paid by the subsidiaries to its shareholder are deemed shareholder income and are taxable in China. Pursuant to the Administration
Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), foreign-invested enterprises in China may purchase or remit foreign
exchange, subject to a cap approved by SAFE, for settlement of current account transactions without the approval of SAFE. Foreign exchange
transactions under the capital account are still subject to limitations and require approvals from, or registration with, SAFE and other
relevant PRC governmental authorities.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Dividend
Distribution.</span> The principal regulations governing the distribution of dividends by foreign holding companies include the Company
Law of the PRC (1993), as amended in 2013, the Foreign Investment assets or interests to a SPV, but failed to complete foreign exchange
registration of overseas investments as required prior Enterprise Law (1986), as amended in 2016, and the Administrative Rules under
the Foreign Investment Enterprise Law (1990), as amended in 2001 and 2014 respectively.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
these regulations, wholly foreign-owned investment enterprises in China may pay dividends only out of their retained profits, if any,
determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned investment enterprises in China
are required to allocate at least 10% of their respective retained profits each year, if any, to fund certain reserve funds unless these
reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends, and a
wholly foreign-owned enterprise is not permitted to distribute any profits until losses from prior fiscal years have been offset.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Circular
37</span>. On July 4, 2014, SAFE issued Circular 37, which became effective as of July 4, 2014. According to Circular 37, PRC residents
shall apply to SAFE and its branches for going through the procedures for foreign exchange registration of overseas investments before
contributing the domestic assets or interests to a SPV. An amendment to registration or filing with the local SAFE branch by such PRC
resident is also required if the registered overseas SPV&#8217;s basic information such as domestic individual resident shareholder,
name, operating period, or major events such as domestic individual resident capital increase, capital reduction, share transfer or exchange,
merger or division has changed. Although the change of overseas funds raised by overseas SPV, overseas investment exercised by overseas
SPV and non-cross-border capital flow are not included in Circular 37, we may be required to make foreign exchange registration if required
by SAFE and its branches.</span></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><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
Circular 37 applies retroactively. As a result, PRC residents who have contributed domestic to implementation of Circular 37, are required
to send a letter to SAFE and its branches for explanation. Under the relevant rules, failure to comply with the registration procedures
set forth in Circular 37 may result in receiving a warning from SAFE and its branches, and may result in a fine of up to RMB 300,000
for an organization or up to RMB 50,000 for an individual. In the event of failing to register, if capital outflow occurred, a fine up
to 30% of the illegal amount may be assessed. PRC residents who control our company are required to register with SAFE in connection
with their investments in us. If we use our equity interest to purchase the assets or equity interest of a PRC company owned by PRC residents
in the future, such PRC residents will be subject to the registration procedures described in Circular 37.</span></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">&#160;</span></p><div>

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</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"><i>New
M&amp;A Regulations and Overseas Listings </i></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission,
the State Administration for Taxation, the State Administration for Industry and Commerce, CSRC and SAFE, jointly issued the Regulations
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&amp;A Rule, which became effective on September
8, 2006 and was amended on June 22, 2009. This New M&amp;A Rule, among other things, includes provisions that purport to require that
an offshore special purpose vehicle formed for purposes of overseas listing of equity interests in PRC companies and controlled directly
or indirectly by PRC companies or individuals obtain the approval of CSRC prior to the listing and trading of such special purpose vehicle&#8217;s
securities on an overseas stock exchange.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 21, 2006, CSRC published on its official website procedures regarding its approval of overseas listings by special purpose
vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take several months to
complete the approval process. The application of this new PRC regulation remains unclear with no consensus currently existing among
leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
corporate structure of the Group Companies shall not be deemed as &#8220;a foreign investor&#8217;s merger and acquisition of a domestic
enterprise&#8221; as specified in the Article 2 of the New M&amp;A Rule, so the Company is not required to obtain approval from the CSRC
for listing and trading of its shares. However, uncertainties still exist as to how the New M&amp;A Rule will be interpreted and implemented
and our opinion stated above is subject to any new laws, rules and regulations or detailed implementations and interpretations in any
form relating to the New M&amp;A Rule.</span></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"><i>&#160;&#160;</i></span></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"><i>Regulations
on Offshore Parent Holding Companies&#8217; Direct Investment in and Loans to Their PRC subsidiary </i></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
offshore company may invest equity in a PRC company, which will become the PRC subsidiary of the offshore holding company after investment.
Such equity investment is subject to a series of laws and regulations generally applicable to any foreign-invested enterprise in China,
which include the Wholly Foreign Owned Enterprise Law, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Contractual
Joint Venture Enterprise Law, all as amended from time to time, and their respective implementing rules; the Administrative Provisions
on Foreign Exchange in Domestic Direct Investment by Foreign Investors; and the Notice of the State Administration on Foreign Exchange
on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment. Under the aforesaid laws and regulations,
the increase of the registered capital of a foreign-invested enterprise is subject to the prior approval by the original approval authority
of its establishment. In addition, the increase of registered capital and total investment amount shall both be registered with SAIC
and SAFE. Shareholder loans made by offshore parent holding companies to their PRC subsidiary are regarded as foreign debts in China
for regulatory purpose, which is subject to a number of PRC laws and regulations, including the PRC Foreign Exchange Administration Regulations,
the Interim Measures on Administration on Foreign Debts, the Tentative Provisions on the Statistics Monitoring of Foreign Debts and its
implementation rules, and the Administration Rules on the Settlement, Sale and Payment of Foreign Exchange. Under these regulations,
the shareholder loans made by offshore parent holding companies to their PRC subsidiary shall be registered with SAFE. Furthermore, the
total amount of foreign debts that can be borrowed by such PRC subsidiary, including any shareholder loans, shall not exceed the difference
between the total investment amount and the registered capital amount of the PRC subsidiary, both of which are subject to the governmental
approval.</span></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">&#160;</span></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">C.
<span style="text-decoration:underline">Our Structure</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 4. Information on the Company &#8211; A. History and Development of the Company.&#8221;</span></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">&#160;</span></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">D.
<span style="text-decoration:underline">Property, Plants and Equipment</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
regarding our property, plants and equipment is described in &#8220;Item 4. B. Business Overview.&#8221;</span></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"><b>&#160;</b></span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
4A. UNRESOLVED STAFF COMMENTS</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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><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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_008"></a></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"><b>Item
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><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. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those set forth under &#8220;Risk Factors&#8221; and elsewhere
in this Annual Report.</i></span></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">&#160;</span></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>Overview</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Powerbridge
Technologies Co., Ltd. is a company that was established under the laws of the Cayman Islands on July 27, 2018 as a holding company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a provider of software application and technology solutions and services to corporate and government customers engaged in global
trade. All of our customers are located in China. We currently generate most of our revenues from application development services, which
represent 36.7%, 63.3% and 82.5% of total revenue for the years ended December 31, 2022, 2021 and 2020, respectively. We also generate
revenue from consulting and technical support services, which represent 24.2%, 14.2% and 14.2% of our revenue for the years ended December
31, 2022, 2021 and 2020, respectively. Further, we also earn subscription service revenue from customers accessing our SaaS, which represent
7.2%, 2.9% and 3.3% of our revenue for the years ended December 31, 2022, 2021 and 2020. We started trading business for the year ended
December 31, 2021 and generated approximately $3.3 million and $6.3 million revenue from consumables sale for the years ended December
31, 2022 and 2021. For the years ended December 31, 2022, 2021 and 2020, our revenues were approximately $10.5 million, $32.1 million
and $26.7 million, respectively.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></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"><b><i>Coronavirus
(&#8220;COVID-19&#8221;) updates</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
COVID-19 pandemic has caused disruptions to our operations starting in December 2019. During the first quarter of 2020, our operations
were closed in February due to China government mandates and we moved quickly to transition our colleague base to a fully remote working
environment in all our locations. At the beginning of March 2020, substantially all of our employee were back to work in our offices.
The ongoing COVID-19 pandemic not only adversely impacted our operations but business of our customers. We experienced delayed customer
payments and rescheduled customer orders, which adversely impacts the Company&#8217;s results of operations, cash flows and financial
position. &#160;During 2022, our business continued to be adversely impacted by the COVID-19 pandemic. Specifically, a new COVID-19 subvariant
(Omicron) outbreak hit China in March 2022, spreading more quickly and easily than previous strains. As a result, a new round of lockdowns,
quarantines, or travel restrictions has been imposed upon different provinces or cities in China by the relevant local government authorities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
extent of the impact on our 2023 fiscal year results will be dependent on future developments such as new information on the effectiveness
of the mitigation strategies, the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the related travel
advisories and restrictions, the overall impact of the COVID-19 pandemic on the global economy and capital markets, and the efficacy
of COVID-19 vaccines, which may also take extended time to be widely and adequately distributed, all of which remain highly uncertain
and unpredictable. Given this uncertainty, we are currently unable to quantify the expected impact of the COVID-19 pandemic on our future
operations, financial condition, liquidity, and results of operations if the current situation continues.</span></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">&#160;</span></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"><b>Recent
Developments</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 5, 2023, the Company entered into an equity transfer agreement (the &#8220;Second SmartConn Acquisition&#8221;) with a shareholder
of SmartConn pursuant to which the Company agrees to purchase 31% equity of SmartConn at 90% of the appraisal price. The consideration
of the Second SmartConn Acquisition will be paid in the form of 114,899,222 newly issued shares of the Company. The Company will hold
an aggregate of 50.99% equity interest of the SmartConn following the closing of the Second SmartConn Acquisition and the First SmartConn
Acquisition of 19.99% equity interest of the SmartConn in January 2022. Reference is made to the Form 6-K filed with the SEC on January
18, 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SmartConn
wholly controls Shanghai Stamp Technology Co., Ltd. (&#8220;Stamp Technology&#8221;). Stamp Technology mainly engaged in distributed
database blockchain, cryptocurrency DAPP development and web 3.0 application in the industry. By acquiring SmartConn, Powerbridge intend
to incorporate its blockchain technology and web 3.0 know how application to further elevate Powerbridge&#8217;s product development
ability.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 19, 2023, the Company entered into an equity transfer agreement with a entered into an equity transfer agreement with DTI Group
Limited (&#8220;DTI&#8221;), pursuant to which the Company agreed to purchase 32% of the equity interest of DTI for a consideration of
RMB 96,732,800, which shall be satisfied by way of allotment and issue of 167,592,318 shares of the Company to DTI. The Company already
held 19% equity interest in DTI prior to the acquisition. Hence, after the acquisition, the Company holds in total 51% equity interest
in DTI. The acquisition was closed on March 24, 2023. DTI&#8217;s expertise in digital trade infrastructure contributes to the establishment
of a digital trade ecosystem for the Company, thereby expanding the Company&#8217;s operations. Given DTI&#8217;s strong performance
and a series of recently signed digital solutions contracts valued at approximately $10 million, it is expected that this acquisition
provides significant values and benefits to the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 28, 2023, the Company entered into an equity transfer agreement with fifteen individual shareholders (the &#8220;Relevant Shareholders&#8221;)
of BOXINRUI INTERNATIONAL HOLDINGS LIMITED (&#8220;Boxinrui&#8221;), pursuant to which the Company agreed to further acquire 65% equity
interest in Boxinrui for a consideration of approximately US$25.8 million, which shall be satisfied by way of allotment and issue of
an aggregate of 276,448,625 shares to the Relevant Shareholders (the &#8220;Third Acquisition&#8221;). The Company will hold an aggregate
of 100% equity interest of the Boxinrui following the closing of the acquisition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 24, 2023, Powerbridge Zhuhai entered into a customized servers purchase agreement with Sichuan Haojing Technology Co., Ltd., pursuant
to which the Company agreed to purchase 1,200servers (the &#8220;Servers&#8221;) used for cryptocurrency mining, for a consideration
of RMB 3.744 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Key
Factors that Affect Operating Results</b></span></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"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently derive a majority of revenues from our application development services, consulting and technical support services, and subscription
services. We intend to continually enhance our services and cross-sell new services to our existing customers and acquire new customers
by increasing our market penetration with a deeper market coverage and a broader geographical reach. Our ability to maintain and expand
our customer base with our application development services significantly affects our operating results.&#160;We intend to expand the
scope of our offerings to service existing customers and acquire new customers by continually making significant investments in R&amp;D
as well as sales marketing activities to increase our subscription revenue and profit. Our ability to drive increased customer adoption
and usage of our SaaS services affects our operating results.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business of providing global trade software application and technology services requires highly skilled professionals with specialized
domain knowledge and technology expertise in order to develop and perform the services offered to our customers. Our ability to recruit,
train, develop and retain our professionals with the skills and qualifications necessary to fulfill the needs of our existing and new
customers has a significant effect on our operating results.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
intend to pursue strategic acquisitions and investments in selective technologies and businesses that will enhance our technology capabilities,
expand our offerings and increase our market penetration. We believe our strategic acquisition and investment strategy is critical for
us to accelerate our growth and strengthen our competitive position. Our ability to identify and execute strategic acquisitions and investments
will have an effect on our operating results.</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"></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Operating Results</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>For
the years ended December 31, 2022 and 2021</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the results of our operations for the years ended December 31, 2022 and 2021, respectively, and provides information
regarding the dollar and percentage increase or (decrease) during such periods.</span></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">&#160;</span></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="font-weight: bold">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center">For the Years Ended</td><td style="font-weight: bold">&#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">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Change</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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% Change</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <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><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>REVENUES:</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><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="width: 52%; text-align: left; padding-left: 9pt">Application development services</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>
    <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><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">1,100,606</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><td>&#160;</td>
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</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>

</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"><i>Revenues</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
derive revenues from four sources: (1) revenue from application development services, (2) revenue from consulting and technical support
services, (3) revenue from subscription services, and (4) trading revenue.</span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2022, our total revenue was approximately $10.5 million as compared to $32.1 million for the year ended
December 31, 2021. The Company&#8217;s total revenue decreased by approximately $21.6 million, or 67.3%. The overall decrease in total
revenue was primarily attributable to approximately $16.5 million decrease in revenue from application development services.</span></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"><i>&#160;</i></span></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"><i><span style="text-decoration:underline">Revenue
from application development services</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 21.55pt"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s application development service contracts are primarily on a fixed-price basis, which require the Company to perform
services including project planning, project design, application development and system integration based on customers&#8217; specific
needs. These services also require significant production and customization. Revenue from application development service is recognized
as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2022, our application development service revenue was approximately $3.8 million as compared to approximately
$20.3 million for the year ended December 31, 2021. The decrease in application development service revenue was approximately $16.5 million
or 81.1% due to less new projects in current period. In certain application development service arrangements, the contacts included sales
of IT equipment. Such revenue was $2,609,531 for the year ended December 31, 2022, decreased from $14,472,010 of the related revenue
for the year ended December 31, 2021.</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Revenue
from consulting and Technical Support Services</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 21.55pt"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional
consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date
its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract
term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance
obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis
as customers receive and consume benefits of such services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 21.55pt"><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; text-align: justify; margin: 0pt 0; text-indent: 35.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2022, our consulting and technical support service revenue was approximately $2.5 million as compared to
approximately $4.6 million for the year ended December 31, 2021, representing a decrease of $2.0 million or 44.3%, which was due to less
new projects in current period.</span></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"><i>&#160;</i></span></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"><i><span style="text-decoration:underline">Revenue
from subscription services</span></i></span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
from subscription services is comprised of subscription fees from customers accessing the Company&#8217;s software-as-a-service applications.
The Company&#8217;s monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers.
The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized
over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2022, our subscription service revenue was approximately $0.8 million as compared to approximately $0.9 million
for the year ended December 31, 2021. We introduced our SaaS subscription services in fiscal 2016 and continue to expand the scope of
our services and enhance the features and functionalities of our applications and improve our marketing efforts, we expect our subscription
service revenue will grow with an expanded offering and increased market awareness.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Trading
revenue</span></i></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company starts to sell consumables to its customers for the year ended December 31, 2021. Revenue from trading revenue was approximately
$3.3 million and $6.3 million for the year ended December 31, 2022 and 2021, respectively.&#160;</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
cost of revenues mainly consists of compensation benefit expenses for our professionals, material cost, travel expenses related to revenue
contracts and purchase cost of consumables products.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
cost of revenues decreased by approximately $14.7 million or 68.6% to approximately $6.7 million for the year ended December 31, 2022
from approximately $21.4 million for the year ended December 31, 2021, which was in line with decreased revenue, mainly attributable
to a decrease of $10.4 million in cost of revenue from application development services and a decrease of approximately $3.1 million
in cost of revenue from trading business. Our cost of revenue from application development services, consulting and technical support
services, and trading was approximately $2.4 million, $1.0 million, $0.1 million and $3.2 million for the year ended December 31, 2022,
respectively, as compared to approximately $12.8 million, $2.2 million, $0.2 million and $6.2 million for the year ended December 31,
2021.respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Gross
profit</i></b></span></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">&#160;</span></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; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">654,027</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">86.2</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">780,800</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</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"><i>&#160;</i></span></p><div>

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

</div><!-- Field: Page; Sequence: 78; 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 -->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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
gross profit decreased by approximately $6.9 million or 64.8% from approximately $10.7 million for the year ended December 31, 2021 to
approximately $3.8 million for the year ended December 31,2022. Gross margin as a percent of overall revenue for the years ended December
31, 2022 and 2021 was 35.9% and 33.4%, respectively.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit for application development services decreased by approximately $6.1 million or 81.4% from $7.5 million for the year ended December
31, 2021 to approximately $1.4 million for the year ended December 31, 2022 mainly due to less new projects for the year ended December
31, 2022. Gross profit margin was steady. Gross profit margin for the years ended December 31, 2022 and 2021 was 36.5% and 37.1%, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit for consulting and technical support services decreased by approximately $0.8 million or 34.0% from approximately $2.4 million
for the year ended December 31, 2021 to approximately $1.6 million for the year ended December 31, 2022. Gross profit margin for the
years ended December 31, 2022 and 2021 was 61.2% and 51.7%, respectively. The increase in gross profit margin was mainly due to our reducing
staff and incorporating workforce optimization practices during the COVID-19 pandemic outbreak and spreading.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit for subscription services decreased by $0.1 million or 16.2% from $0.8 million for the year ended December 31, 2021 to $0.7 million
for the year ended December 31, 2022. Gross profit margin was 86.2% and 83.3% for the years ended December 31, 2022 and 2021 respectively.
The increase in gross profit margin was mainly due to our reducing staff and incorporating workforce optimization practices during the
COVID-19 pandemic outbreak and spreading.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit for trading revenue was $154,855 and $39,540 for the years ended December 31, 2022 and 2021, respectively; gross profit margin
was 4.6% and 0.6% for the years ended December 31, 2022 and 2021, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Operating
Expenses</i></span></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">&#160;</span></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>&#160;</td><td style="font-weight: bold">&#160;</td>
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    <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 style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <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 style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,956,811</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,775,526</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(818,715</td><td style="width: 1%; text-align: left">)</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">7,732,287</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,004,186</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,728,101</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">4,733,183</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,100,606</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,632,577</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">3,459,987</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,611,742</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">848,245</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 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">23,866,175</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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
operating expenses consist of selling and marketing, general and administrative, research and development (&#8220;R&amp;D&#8221;) expenses,
provision for doubtful accounts and stock-based compensation. Operating expenses increased by approximately $5.0 million, or 26.8%, from
approximately $18.8 million for the year ended December 31, 2021 to approximately $23.9 million for the year ended December 31, 2022.
The increase in our operating expenses was primarily due to approximately $3.6 million increase in provision for doubtful accounts and
approximately $1.7 million increase in share-based compensation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling
and marketing expenses primarily consisted of salary and compensation expenses relating to our sales and marketing personnel, and also
included entertainment, travel and transportation, and other expenses relating to our sales and marketing activities. Selling and marketing
expenses decreased by approximately $0.8 million or 29.5% from $2.8 million for the year ended December 31, 2021 to approximately $2.0
million for the year ended December 31, 2022. The decrease was primarily attributable to less marketing consulting fees and marketing
and promotional activities for the year ended December 31, 2022.&#160;</span></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>

</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>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">General
and administrative expenses primarily consisted of salary and compensation expenses relating to our accounting, human resources and executive
office personnel, and included rental expenses, depreciation and amortization expenses, office overhead, professional service fees and
travel and transportation costs. General and administrative expenses increased by $1.7 million or 28.8% from approximately $6.0 million
for the year ended December 31, 2021 to approximately $7.7 million for the year ended December 31, 2022, due to higher management bonus.
As a percentage of revenues, general and administrative expenses were 73.8% and 18.7% of our total revenue for the years ended December
31, 2022 and 2021, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provision
for doubtful accounts increased by approximately $3.6 million from approximately $1.1 million for the year ended December 31, 2021 to
approximately $4.7 million for the year ended December 31, 2022 due to slow collection impacted by COVID-19.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">R&amp;D
expenses primarily consisted of compensation and benefit expenses relating to our R&amp;D personnel as well as office overhead and other
expenses relating to our R&amp;D activities. Our R&amp;D expenses increased by approximately $0.8 million from approximately $2.6 million
for the year ended December 31, 2021 to approximately $3.5 million for the year ended December 31, 2022, representing 33.0% and 8.1%
of our total revenues for the years ended December 31, 2022 and 2021, respectively. We expect to continue to invest in R&amp;D. We expect
that our ability to effectively utilize our R&amp;D capabilities significantly affect our results of operations in the future.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-based
compensation decreased by approximately $0.4 million from approximately $6.3 million for the year ended December 31, 2021 to approximately
$6.0 million for 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; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Other
Income (Expense)</i></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
income (expense) primarily consists of government subsidy income, interest income net of interest expense and other expenses. Our net
other expense was approximately $2.4 million for the year ended December 31, 2022, compared with approximately $1.5 million for the year
ended December 31, 2021. The increase in net other expense is substantially attributable to a decrease of approximately $0.9 million
loss from change in the fair value of the convertible loan. The Company elected the fair value option to account for its convertible
loans. The Group engaged an independent valuation firm to assess the fair value of the convertible loan using the binomial tree model.
The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported
by little or no market activity and reflect the Company&#8217;s own assumptions in measuring fair value. Significant estimates used in
developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability
to convert and expected timing of conversion.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) as of December 31, 2022 and 2021:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></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>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold">&#160;</td></tr>
  <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">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Opening balance</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,251,832</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; 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">7,979,983</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,860,000</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">2,448,936</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,508,229</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Accrued interest</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">195,139</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">226,775</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">Conversion of convertible loan</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">(3,795,924</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">(6,343,172</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">9,079,966</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,251,832</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-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Income
Tax Benefit</i></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
tax benefit was approximately $1.0 million for the year ended December 31, 2022, compared to approximately $0.2 million for the year
ended December 31, 2021. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However,
our major operating subsidiary - Powerbridge Zhuhai was recognized as the &#8220;high-tech enterprise&#8221; status, which reduced its
statutory income tax rate to 15%. The rest of our subsidiaries in PRC are subject to income tax rate of 25%. As of December 31, 2022
and 2021, the Company had accrued (before adjustment) total income tax liabilities of $550,602 and $594,026, respectively. According
to PRC taxation regulation and administrative practice and procedures, the statute of limitation on tax authority&#8217;s audit or examination
of previously filed tax returns expires three years from the date they were filed. The Company also obtained a written statement from
the local tax authority that no additional taxes are due as of December 31, 2022. Based on these facts, the Company reversed the accrued
tax liabilities in the total amount of $550,602 (or RMB3,798,484) relating to the tax liabilities accrued for the period from fiscal
2016 to fiscal 2018, resulting in the decrease of accrued income tax liabilities from $550,602 to $nil as of December 31, 2022.</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"></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 -->75<!-- Field: /Sequence --></p></div><div>
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</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">&#160;</span></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"><i>Net
Loss</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the foregoing, our net loss increased by $12.1 million, or 127.2%, from $9.5 million for the year ended December 31, 2021
to $21.5 million for the year ended December 31, 2022. The increased net loss was the result of decreased gross profit and increased
operation expenses as discussed above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Other
comprehensive (loss) income </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
currency translation loss was approximately $6.0 million, compared to an income of approximately $1.9 million for the years ended December
31, 2022 and 2021, respectively. The balance sheet amounts with the exception of equity as of December 31, 2022 were translated at RMB6.8972
to USD1.00 as compared to RMB6.3726 to USD1.00 as of December 31, 2021. The equity accounts were stated at their historical rate. The
average translation rates applied to the income statements accounts for the years ended December 31, 2022 and 2021 were RMB6.7290 to
USD1.00 and RMB6.4508 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial
results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.</span></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">&#160;</span></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><i>For
the years ended December 31, 2021 and 2020</i></b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the results of our operations for the years ended December 31, 2021 and 2020, respectively, and provides information
regarding the dollar and percentage increase or (decrease) during such periods.</span></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">&#160;</span></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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    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: justify">&#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 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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  <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">1,100,606</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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    <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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  <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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    <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><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>
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</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"><i>&#160;</i></span></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"><i>Revenues</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
derive revenues from four sources: (1) revenue from application development services, (2) revenue from consulting and technical support
services, (3) revenue from subscription services, and (4) trading revenue.</span></p><div>

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

</div><!-- Field: Page; Sequence: 81; 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; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is focusing on developing global trade applications and solutions equipped with the Company&#8217;s new technology in SaaS platform,
Big Data, AI and IoT applications and BaaS platform. The Company believes new technology development is the key driver for the Company&#8217;s
future growth. In fiscal 2021, our revenue related to deploying our new technology including SaaS and big data analysis services accounted
for 5.7% of our total revenue (or approximately $1.8 million) compared to 5.8% of our total revenue (or approximately $1.5 million) in
fiscal 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021, our total revenue was approximately $32.1 million as compared to $26.7 million for the year ended December
31, 2020. The Company&#8217;s total revenue increased by approximately $5.4 million, or 20.4%. The overall increase in total revenue
was primarily attributable to approximately $6.3 million increase in revenue from trading.</span></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"><i>&#160;</i></span></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"><i><span style="text-decoration:underline">Revenue
from application development services</span></i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s application development service contracts are primarily on a fixed-price basis, which require the Company to perform
services including project planning, project design, application development and system integration based on customers&#8217; specific
needs. These services also require significant production and customization. Revenue from application development service is recognized
as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021, our application development service revenue was approximately $20.3 million as compared to approximately
$22.0 million for the year ended December 31, 2020. The decrease in application development service revenue was approximately $1.7 million
or 7.6% due to due to less new projects in current period. In certain application development service arrangements, the contacts included
sales of IT equipment. Such revenue was $14,472,010 in fiscal 2021, significantly increased from $6,299,982 of the related revenue in
fiscal 2020. On the other side, 2.9% (or approximately $0.6 million) of revenue from application development service were related to
SaaS platform development and big data analysis applications in fiscal 2021, comparing to 1.2% (or approximately $0.3 million) of the
related revenue in fiscal 2020. We intend to continue investing for long-term growth in the SaaS development and big data analysis market
and we plan to continue to expand our ability to sell our applications by investing in product development and customer support to address
the business needs of local markets and continuous growth for these services.</span></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">&#160;</span></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"><i><span style="text-decoration:underline">Revenue
from consulting and Technical Support Services</span></i></span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional
consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date
its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract
term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance
obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis
as customers receive and consume benefits of such services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021, our consulting and technical support service revenue was approximately $4.6 million as compared to
approximately $3.8 million for the year ended December 31, 2020, representing an increase of $0.8 million or 20.0%, which was due to
revenue brought by four new projects.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Revenue
from subscription services</span></i></span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
from subscription services is comprised of subscription fees from customers accessing the Company&#8217;s software-as-a-service applications.
The Company&#8217;s monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers.
The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized
over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021 and 2020, our subscription service revenue stayed at approximately $0.9 million. We introduced our SaaS
subscription services in fiscal 2016 and continue to expand the scope of our services and enhance the features and functionalities of
our applications and improve our marketing efforts, we expect our subscription service revenue will grow with an expanded offering and
increased market awareness.</span></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><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 -->77<!-- 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; text-indent: 0.5in">&#160;</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"><i><span style="text-decoration:underline">Trading
revenue</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company starts to sell consumables to its customers in fiscal 2021. Revenue from trading revenue was approximately $6.3 million.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
cost of revenues mainly consists of compensation benefit expenses for our professionals, material cost, travel expenses related to revenue
contracts and purchase cost of consumables products.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
cost of revenues increased by approximately $4.1 million or 23.8% to approximately $21.4 million in fiscal 2021 from approximately $17.3
million in fiscal 2020, which was mainly attributable to an increase of $6.2 million in cost of trading business, offset by a decrease
of approximately 2.5 million in cost of revenue from application development services. Our cost of revenue from consulting and technical
support services was approximately $2.2 million in fiscal 2021, representing an increase of $0.4 million from $1.8 million in fiscal
2020. Our increase in cost of revenue from consulting and technical support services was in line with increase in consulting and technical
support services revenue. Our cost of revenue from subscription services were approximately $0.2 million and approximately $0.1 million
in fiscal 2021 and 2020, respectively. We have established a stable SaaS development and service team and expect to expand the scope
of our services and enhance the features and functionalities of our applications and improve our marketing efforts.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Gross
profit</i></b></span></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><i>&#160;</i></b></span></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: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="14" style="font-weight: bold; text-align: center">For the Years Ended</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</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">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 52%; text-align: justify">Application development services</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,537,931</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">39,540</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 4pt">Total gross profit</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">10,715,313</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt; text-align: right">33.4</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">9,392,695</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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
gross profit increased by approximately $1.3 million or 14.1% from approximately $9.4 million in fiscal 2020 to approximately $10.7 million
in fiscal 2021. Gross margin as a percent of overall revenue for fiscal 2021 and 2020 was 33.4% and 35.2%, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit for application development services increased by approximately $0.9 million or 13.1% from $6.7 million in 2020 to approximately
$7.5 million in fiscal 2021 mainly due to we completed several software contracts which required fewer developing hours in fiscal 2021.
Gross profit margin for fiscal 2021 and 2020 was 37.1% and 30.3%, respectively. The increase in gross margin was primarily due to less
developing costs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit for consulting and technical support services increased by approximately $0.4 million or 18.2% from approximately $2.0 million
in 2020 to approximately $2.4 in fiscal 2021 mainly in line with increased of revenue from consulting and technical support service,
offset by cost resulted from the outsourcing of maintenance service for the purpose of fulfilling scheduled maintenance and operating
plan when we reducing staff and incorporating workforce optimization practices during the COVID-19 pandemic outbreak and spreading. Gross
profit margin for fiscal 2021 and 2020 was 51.7% and 52.5%, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit for subscription services increased by $0.05 million or 6.4% from $0.73 million in 2020 to $0.78 million in fiscal 2021, which
was in line with the increase of revenue from subscription services. Gross profit margin was 83.3% in both fiscal 2021 and 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit for trading revenue was $39,540 and gross profit margin was 0.6% for fiscal 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 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"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Operating
Expenses</i></span></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">&#160;</span></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: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <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">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</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">
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    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#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 style="text-align: left">&#160;</td><td style="text-align: right">444,760</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">191,148</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">909,458</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">2,611,742</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,780,944</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(169,202</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(6.1</td><td style="text-align: left">)%</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">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,473,976</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">4,861,270</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="text-align: justify; padding-bottom: 4pt">Total operating expenses</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">18,827,306</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">12,680,522</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">6,146,784</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt; text-align: right">48.5</td><td style="padding-bottom: 4pt; text-align: left">%</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
operating expenses consist of selling and marketing, general and administrative, research and development (&#8220;R&amp;D&#8221;) expenses,
provision for doubtful accounts and stock-based compensation. Operating expenses increased by approximately $6.1 million, or 48.5%, from
approximately $12.7 million for the year ended December 31, 2020 to approximately $18.8 million for the year ended December 31, 2021.
The increase in our operating expenses was primarily due to approximately $4.9 million increase in share-based compensation and approximately
$0.9 million increase provision for doubtful accounts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling
and marketing expenses primarily consisted of salary and compensation expenses relating to our sales and marketing personnel, and also
included entertainment, travel and transportation, and other expenses relating to our sales and marketing activities. Selling and marketing
expenses increased by approximately $0.1 million or 3.8% from $2.7 million in fiscal 2020 to approximately $2.8 million in fiscal 2021.
The increase was primarily attributable to more marketing consulting fees and marketing and promotional activities in fiscal 2021.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">General
and administrative expenses primarily consisted of salary and compensation expenses relating to our accounting, human resources and executive
office personnel, and included rental expenses, depreciation and amortization expenses, office overhead, professional service fees and
travel and transportation costs. General and administrative expenses increased by $0.4 million or 8.0% from approximately $5.6 million
in fiscal 2020 to approximately $6.0 million in fiscal 2021, due to more professional and consulting fees incurred relating to capital
market development. As a percentage of revenues, general and administrative expenses were 18.7% and 20.8% of our total revenue in fiscal
2021 and 2020 respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provision
for doubtful accounts increased by approximately $0.9 million from approximately $0.2 million in fiscal 2020 to approximately $1.1 million
in fiscal 2021 due to slowly collection.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">R&amp;D
expenses primarily consisted of compensation and benefit expenses relating to our R&amp;D personnel as well as office overhead and other
expenses relating to our R&amp;D activities. Our R&amp;D expenses decreased by approximately $0.2 million from approximately $2.8 million
in fiscal 2020 to approximately $2.6 million in fiscal 2021, representing 8.1% and 10.4% of our total revenues for fiscal 2021 and 2020,
respectively. We expect to continue to invest in R&amp;D. We expect that our ability to effectively utilize our R&amp;D capabilities
significantly affect our results of operations in the future.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-based
compensation increased by approximately $4.9 million from approximately $1.5 million in fiscal 2020 to approximately $6.3 million in
fiscal 2021.</span></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">&#160;</span></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"><i>Other
Income (Expense)</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
income (expense) primarily consists of government subsidy income, interest income net of interest expense and other expenses. Our net
other expense was approximately $1.5 million in fiscal 2021, compared with approximately $15.2 million in fiscal 2020. The decrease in
net other expense is substantially attributable to a decrease of approximately $13.8 million loss from change in the fair value of the
convertible loan. The Company elected the fair value option to account for its convertible loans. The Group engaged an independent valuation
firm to assess the fair value of the convertible loan using the binomial tree model. The convertible loans are classified as level 3
instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect
the Company&#8217;s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible
loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) as of December 31, 2021 and 2020:</span></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">&#160;</span></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: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Opening balance</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</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="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">6,860,000</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; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">15,258,333</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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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,343,172</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">(65,258,333</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,251,832</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table><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"><i>&#160;</i></span></p><div>

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

</div><!-- Field: Page; Sequence: 84; 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 -->79<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></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"><i>Income
Tax Benefit</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
tax benefit was approximately $0.2 million in fiscal 2021, compared to approximately $0.08 million in fiscal 2020. Under the Income Tax
Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, our major operating subsidiary - Powerbridge
Zhuhai was recognized as the &#8220;high-tech enterprise&#8221; status, which reduced its statutory income tax rate to 15%. The rest
of our subsidiaries in PRC are subject to income tax rate of 25%.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the foregoing, our net loss decreased by $8.9 million, or 48.4%, from $18.4 million in fiscal 2020 to $9.5 million in fiscal
2021. The decreased net loss was the result of decreased change of fair value of the convertible loan and increased gross profit, offset
by increased operation expenses as discussed above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Other
comprehensive income (loss)</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
currency translation adjustments amounted to an income of approximately $1.9 million and approximately $0.8 million for the years ended
December 31, 2021 and 2020, respectively. The balance sheet amounts with the exception of equity as of December 31, 2021 were translated
at RMB6.3726 to USD1.00 as compared to RMB6.5250 to USD1.00 as of December 31, 2020. The equity accounts were stated at their historical
rate. The average translation rates applied to the income statements accounts for the years ended December 31, 2021 and 2020 were RMB6.4508
to USD1.00 and RMB6.9042 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial
results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.</span></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">&#160;</span></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"><span style="text-decoration:underline">Recently
issued accounting pronouncements</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
list of recent relevant accounting pronouncements is included in Note 2 &#8220;Summary of Principal Accounting Policies&#8221; of our
Consolidated Financial Statements.&#160;</span></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">&#160;<b>&#160;</b></span></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>B.
Liquidity and Capital Resources&#160;</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantially
all of our operations are conducted in China and all of our revenue, expenses, and cash are denominated in RMB. RMB is subject to the
exchange control regulation in China, and, as a result, we may have difficulty distributing any dividends outside of China due to PRC
exchange control regulations that restrict our ability to convert RMB into U.S. dollars. As of December 31, 2022, cash of approximately
$9.4 million were fully held by the Company and its subsidiary in mainland PRC.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Cayman holding company is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiary
in China. As a result, the Company&#8217;s ability to pay dividends depends upon dividends paid by our subsidiary. Our subsidiaries in China
are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards
and regulations. Under PRC law, our subsidiary is required to set aside at least 10% of its after-tax profits each year based on PRC
accounting standards, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. The
statutory reserve funds are not distributable as cash dividends. Remittance of dividends by our subsidiary out of China is subject to
examination by the banks designated by SAFE. Our subsidiary has not paid dividends and will not be able to pay dividends until it generates
accumulated profits and meet the requirements for statutory reserve funds. In addition, we would need to accrue and pay withholding taxes
if we were to distribute funds from our subsidiary in China to us. We do not intend to repatriate such funds in the foreseeable future,
as we plan to use existing cash balance in PRC for general corporate purposes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2022, the Company had working capital of approximately $59.5 million and incurred a net loss of approximately
$21.5 million. For fiscal 2022, the Company had negative operation cash flow of approximately $9.7 million. The Company has historically
funded its working capital needs primarily from public offering, operations, bank loans, advance payments from customers and shareholders.
The working capital requirements are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts,
the progress or execution on customer contracts, and the timing of accounts receivable collections.&#160;</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
assessing its liquidity, the Company monitors and analyzes its cash on hand, its ability to generate sufficient revenue sources in the
future and its operating and capital expenditure commitments. As of December 31, 2022, the Company had cash of approximately $9.4 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 1, 2022, the Company entered into a securities purchase agreement with White Lion Capital LLC (&#8220;White Lion&#8221;). Pursuant
to the agreement, White Lion shall purchase up to $15 million of the Company&#8217;s ordinary shares at the lowest daily VWAP of the
Ordinary Shares during the Valuation Period by 97%. As of December 31, 2022, the Company issued 22,875,000 ordinary shares and net proceeds
was $3,519,202. In 2023, the Company issued 5,000,000 ordinary shares and net proceeds was $491,180.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 9, 2022, the Company entered into a securities purchase agreement with Yorkville Advisors lobal, LP (&#8220;Yorkville&#8221;).
Pursuant to the agreement, Yorkville shall purchase up to $30 million of the Company&#8217;s ordinary shares at the market price by 96%,
and the company shall issue to Yorkville 223,880 ordinary shares as a commitment fee. As of December 31, 2022, the Company issued 17,035,074
ordinary shares and net proceeds was $3,511,317. The Company issued 223,880 ordinary shares for commitment fee on January 1, 2023. In
2023, the Company issued 26,235,245 ordinary shares and net proceeds was $2,758,873.</span></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>

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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; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 29, 2022, the Company entered into a securities purchase agreement with TBS Capital LP, (&#8220;TBS&#8221;). Pursuant to the
agreement, TBS shall purchase up to $15 million of the Company&#8217;s ordinary shares at the market price by 96%, and the company shall
issue to Yorkville 223,880 ordinary shares as a commitment fee. The Company issued 223,880 ordinary shares for commitment fee on December
15, 2022. In 2023, the Company issued 6,250,000 ordinary shares and net proceeds was $530,000.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company believes that its cash on hand and financing cash flows will be sufficient to fund its operations over at least the next 12 months
from the date of this report. However, the Company may need additional cash resources in the future if the Company experiences changed
business conditions or other developments, and may also need additional cash resources in the future if the Company wishes to pursue
opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements
exceed the Company&#8217;s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following summarizes the key components of our cash flows for the years ended December 31, 2022, 2021 and 2020.</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <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>
    <td colspan="10" style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the
    Years Ended</b></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">
    <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>
    <td colspan="10" style="font: 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"><b>December
    31,</b></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">
    <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>
    <td colspan="2" style="font: 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"><b>2022</b></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; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></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; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2020</b></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">
    <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>
    <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: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 67%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net cash (used in) provided by operating
    activities</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%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 8%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(9,656,725) </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 8%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(9,761,386)</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%"><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">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 8%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,051,741</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></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">Net cash used in investing activities</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; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(234,262) </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 style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3,239,410</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</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; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(65,904,533</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><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: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net cash provided by financing activities</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; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12,403,433 </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 style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">11,462,271</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 style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">70,043,789</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; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effect of exchange rate change on cash and restricted
    cash</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; border-bottom: black 1.5pt solid"><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">(188,372)</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; border-bottom: black 1.5pt solid"><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">205,069</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; border-bottom: black 1.5pt solid"><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">(2,745,717</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><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: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net increase (decrease) in cash and restricted cash</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; border-bottom: black 1.5pt solid"><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">2,324,074
    </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; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1,333,456</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</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">2,445,280</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>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
Activities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in operating activities was approximately $9.7 million for the year ended December 31, 2022, as compared to approximately $9.8
million net cash provided by operating activities for the year ended December 31, 2021. Cash used in operating activities for the year
ended December 31, 2022 mainly consisted of approximately $21.5 million of net loss, adjustment of $15.2 million non-cash items, a decrease
of approximately $6.8 million in account payable (including related parties) due to less purchase, offset by an increase of approximately
$3.0 million in account receivable due to slowly collection.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in operating activities was approximately $9.8 million for the year ended December 31, 2021, as compared to approximately $1.1
million net cash provided by operating activities for fiscal 2020. Cash used in operating activities for the year ended December 31,
2021 mainly consisted of approximately $9.5 million of net loss, adjustment of $11.0 million non-cash items, an increase of approximately
$10.5 million in account receivable due to slowly collection, a decrease of approximately$3.7 million in accounts payable due to more
purchase in 2021, offset by a decrease of approximately $4.1 million in contract costs incurred for fulfillment of contracts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by operating activities was approximately $1.1 million for the year ended December 31, 2020, as compared to approximately
$3.3 million net cash used in operating activities for fiscal 2019. Cash provided by operating activities for the year ended December
31, 2020 mainly consisted of approximately $18.4 million of net loss, adjustment of $18.3 million non-cash items, an increase of approximately
$3.0 million in accounts payable due to more purchase in 2020, offset by an increase of approximately $2.0 million in accounts receivable,
an increase of $1.2 million prepayment, deposits and other assets due to increasing purchase from our venders, and an increase of approximately
$0.8 million in contract costs incurred for the customer contracts</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Investing
Activities</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities was approximately $0.2 million for the year ended December 31, 2022, as compared to approximately $3.2
million for the year ended December 31, 2021. Cash used in investing activities for the year ended December 31, 2022 was mainly due to
$3.9 million spending on purchases of property and equipment and approximately $0.4 million paid to long term investments, offset by
approximately $4.0 million collected from working capital support provided to Kezhi Technology Co., Ltd.(&#8220;Kezhi&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities was approximately $3.2 million for fiscal 2021, as compared to approximately $65.9 million for fiscal
2020. Cash used in investing activities for fiscal 2021 was mainly due to $4.9 million spending on purchases of property and equipment,
offset by approximately $1.7 million collected from working capital support provided to Kezhi Technology Co., Ltd. (&#8220;Kezhi&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities was approximately $65.9 million for fiscal 2020, as compared to approximately $3.6 million for fiscal
2019. Cash used in investing activities for fiscal 2020 was mainly due to $1.6 million spending on purchases of property and equipment
and $64.3 million increase in working capital support provided to Kezhi Technology Co., Ltd.(&#8220;Kezhi&#8221;) which will be repaid
in two years and the repayment of the loan is guaranteed by a third party.</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"></p><div>

</div><!-- Field: Page; Sequence: 86; 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 -->81<!-- 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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Financing
Activities</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities was approximately $12.4 million for the year ended December 31, 2022, as compared to approximately
$11.5 million for the year ended December 31, 2021. Net cash provided by financing activities for the year ended December 31, 2022 was
mainly net proceeds of approximately $8.0 million from issuance of convertible note and approximately $7.0 million from the market offering,
offset by net repayment of $1.5 million on bank loan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities was approximately $11.5 million for fiscal 2021, as compared to approximately $70.0 million for
fiscal 2020. Net cash provided by financing activities for the year ended December 31, 2021 was mainly net proceeds of approximately
$6.9 million from issuance of convertible note and approximately $5.1 million from the market offering, offset by net repayment of $0.3
million on bank loan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash from financing activities was approximately $70.0 million for fiscal 2020, as compared to approximately $7.9 million for fiscal
2019. Net cash provided by financing activities for the year ended December 31, 2020 was mainly from the proceeds of $50 million from
issuance of convertible note and $17.6 million from private placement, $6.5 million proceeds from bank loan, offset by repayment of $3.8
million on bank loan, and $0.3 million repayment to related party.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company made capital expenditures of $3.9 million, $4.9 million and $1.6 million for the years ended December 31, 2022, 2021 and 2020,
respectively. In these periods, our capital expenditures were mainly used for purchases of office equipment, furniture and payments for
capitalized development cost. The Company will continue to make capital expenditures to meet the expected growth of its business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Research and Development, Patents and Licenses, Etc.</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 4. Information on the Company&#8212;B. Business Overview&#8212;Research and Development.&#8221; See &#8220;Item 4. Information
on the Company&#8212;B. Business Overview&#8212;Intellectual Property.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Trend Information</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for
the year ended December 31, 2022 that are reasonably likely to have a material and adverse 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 results
of operations or financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.
Critical Accounting Estimates</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions
that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were
no material changes made to the accounting estimates and assumptions in the past two years, we continually evaluate these estimates and
assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe
to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual
results could differ from our expectations as a result of changes in our estimates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that the following accounting policies involve a higher degree of judgment and complexity in their application and require us
to make significant accounting estimates. Accordingly, these are the policies we believe are the most critical to understanding and evaluating
our consolidated financial condition and results of operations.</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"></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"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Use
of estimates</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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&#8217;s consolidated financial statements include but not limited to the useful lives of property and equipment
and capitalized development cost, impairment of long-lived assets, valuation of accounts receivables, loans to third parties, revenue
recognition and realization of deferred tax assets and uncertain tax positions. Actual results could differ from these estimates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Fair
value measurement</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ASC
825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize
the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as
follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1 &#8212; inputs
    to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2 &#8212; inputs
    to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for
    identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived
    from or corroborated by observable market data.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3 &#8212; inputs
    to the valuation methodology are unobservable.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
otherwise disclosed, the fair value of the Company&#8217;s financial instruments including cash, notes and accounts receivable, due from
related parties, prepayments, deposits and other current assets, notes and accounts payable, customer deposits, salaries and benefits
payables, due to related party and taxes payable approximates their recorded values due to their short-term maturities. The fair value
of the long-term prepayments, deposits and other assets and loans to third parties approximate their carrying amounts because the deposits
were paid in cash.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company elected the fair value option to account for its convertible loan. The Company engaged an independent valuation firm to perform
the valuation. The fair value of the convertible loans is calculated using the binomial tree model. The convertible loans are classified
as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity
and reflect the Company&#8217;s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the
convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected
timing of conversion. Refer to Note 9 for additional information.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a
change in these inputs could result in a significant change in the fair value measurement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 19.55pt"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Accounts
receivable, net</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
receivable, net, is stated at the original invoiced amount net of write-offs and allowance for doubtful accounts. The Company reviews
the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances.
Past-due balances over 90 days are reviewed individually for collectability. In evaluating the collectability of individual accounts
receivable balances, the Company considers several factors, including the age of the balance, the customer&#8217;s payment history, current
credit-worthiness, and current economic trends. Accounts receivable balances are written off after all collection efforts have been exhausted.
Typically, the Company includes unbilled receivables in accounts receivable for contracts on which revenue has been recognized, but for
which the customer has not yet been billed. Unbilled receivables, substantially all of which are expected to be billed within one year
are stated at their estimated realizable value and consist of costs and fees billable on contract completion or the occurrence of contractual
payment phase.</span></p><div>




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</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">&#160;</span></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"><span style="text-decoration:underline">Capitalized
development costs</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company follows the provisions of Accounting Standards Codification (&#8220;ASC&#8221;) 985-20, &#8220;Costs of Software to be Sold,
Leased, or Marketed.&#8221; ASC 985-20 provides guidance on capitalization of the costs of software developed or obtained for sold, leased,
or marketed. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred
during the application development stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if
it is determined that these upgrades or enhancements add additional functionality to the application. The capitalized development cost
is amortized on a straight-line basis over the estimated useful life, which is generally five years. Management evaluates the useful
lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact
the recoverability of these assets.&#160;</span></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">&#160;</span></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"><span style="text-decoration:underline">Impairment
for long-lived assets</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Long-lived
assets, including property, equipment, furniture and fixtures and intangible assets with finite lives are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When these events occur, the
Company measures impairment by comparing the carrying values of the long-lived assets to the estimated undiscounted future cash flows
expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less
than the carrying amounts of the assets, the Company would recognize an impairment loss based on the excess of the carrying value over
the assessed discounted cash flow amount.</span></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">&#160;</span></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"><span style="text-decoration:underline">Long-term
investments</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Long-term
investments are primarily consisted of equity investments in privately held entities accounted for using the measurement alternative
and equity investments accounted for using the equity method. On January 1, 2022, the Company adopted ASU 2016-01 Financial Instruments-Overall
(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company
started to record equity investments at fair value, with gains and losses recorded through net earnings. And the Company elected to measure
certain equity investments without readily determinable fair value at cost, less impairments, plus or minus observable price changes
and assess for impairment quarterly.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Equity
investments without readily determinable fair values</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">After
the adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values
and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring
basis, and report changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity
investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment
of the same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Equity
investments with readily determinable fair values</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equity
investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted
prices in active markets at the reporting date.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Equity
investments accounted for using the equity method</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise
control, using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss
for its share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary
impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the
entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination,
particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes
in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any
identified impairment is other-than-temporary.</span></p><div>

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</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"><span style="text-decoration:underline">Revenue
recognition</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company adopted ASC Topic 606 Revenue from Contracts with Customers (&#8220;ASC 606&#8221;) on January 1, 2019 using the modified retrospective
approach. Revenues for the years ended December 31, 2022, 2021 and 2020 were presented under ASC 606. There is no adjustment to the opening
balance of retained earnings at January 1, 2019 since there was no change to the timing and pattern of revenue recognition upon adoption
of ASC 606. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company&#8217;s customers
in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services and is recorded net
of value-added tax (&#8220;VAT&#8221;). To achieve that core principle, the Group applies the following steps:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Step
1: Identify the contract (s) with a customer</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Step
2: Identify the performance obligations in the contract</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Step
3: Determine the transaction price</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Step
4: Allocate the transaction price to the performance obligations in the contract</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Step
5: Recognize revenue when (or as) the entity satisfies a performance obligation</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company derives its revenues from four sources: (1) revenue from application development services, (2) revenue from consulting and technical
support services, (3) revenue from subscription services, (4) trading revenue. All of the Company&#8217;s contracts with customer do
not contain cancelable and refund-type provisions.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)
Revenue from application development service</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s application development service contracts are primarily on a fixed-price basis, which require the Company to perform
services including project planning, project design, application development and system integration based on customers&#8217; specific
needs. These services also require significant production and customization. Upon delivery of the services, customer acceptance is generally
required. In the same contract, the Company is generally required to provide post-contract customer support (&#8220;PCS&#8217;) for a
period from three months to three years (&#8220;PCS period&#8221;) after the customized application development services are delivered.
The type of services for PCS clause is generally not specified in the contracts or as stand-ready services on when-and-if-available basis.
The unspecified PCS is stand-ready service on when-and-if-available basis. It grants the customers on line and telephone access to technical
support personnel during the term of the service. Specified PCS includes specified service term in the contract such as training.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s application development service revenues are generated primarily from contracts with PRC government or related agencies
and state-owned enterprises. The contracts contain negotiated billing terms which generally include multiple payment phases throughout
the contract term and a significant portion (30% - 50%) of contract amount usually is billed upon the completion of the related projects.
Pursuant to the contract terms, the Company has enforceable right on payments for the work performed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company sometimes provides a warranty for its application development service contracts. The warranty period is typically 12-36 months
upon the completion of the application development service. In accordance with ASC 606-10-25-19, the Company believes the warranty provision
in the contracts generally represents service-type warranty, which is a distinct performance obligation and the Company also provides
the similar service on standalone basis and customers can benefit from the related service-type warranty service. For the service warranty
component, the customer simultaneously receives and consumes the benefits provided by the company performance over the warranty term,
therefore, the service warranty is satisfied over time. The revenue allocated to the service warranty is recognized over the warranty
period.</span></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>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company assesses that application development service, PCS or specific service and service-type warranty service, if applicable, are
distinct performance obligations in the application development service contracts. The Company provides these services on standalone
basis and customers are able to benefit from each of the service on its own. In addition, the timing of delivery of these performance
obligations can be separately identifiable in the contracts. The transaction price is allocated to these identified performance obligations
based on the relative standalone selling prices. The transaction price allocated to PCS or unspecific service and service-type warranty,
if applicable, on a straight-line method over the contractual period. Revenue allocated to specified PCS is recognized as the related
services are rendered. The transaction price allocated to application development service is recognized over time as the Company&#8217;s
performance creates or enhances the project controlled by the customer and the control is transferred continuously to our customers.
The Company uses an input method based on cost incurred as the Company believes that this method most accurately reflects the Company&#8217;s
progress toward satisfaction of the performance obligation, which usually takes less than one year. Under this method, the transaction
price allocated to application development service is recognized as work is performed based on the ratio of costs incurred to date to
the total estimated costs at completion of the performance obligations.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incurred
costs include all direct material, labor and subcontract costs, and those indirect costs related to application development performance,
such as indirect labor, supplies, and tools. Cost-based input method requires the Company to make estimates of revenues and costs to
complete the construction. In making such estimates, significant judgment is required to evaluate assumptions related to the costs to
complete the application development, including materials, labor, and other system costs. The Company&#8217;s estimates are based upon
the professional knowledge and experience of our engineers and project managers to assess the contract&#8217;s schedule, performance,
technical matters. The Company has adequate cost history and estimating experience, and with respect to which management believes it
can reasonably estimate total development costs. If the estimated costs are greater than the related revenues, the Company recognizes
the entire estimated loss in the period the loss becomes known and can be reasonably estimated. Changes in estimates for application
development services include but not limited to cost forecast changes and change orders. The cumulative effect of changes in estimates
is recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. To date, the
Company has not incurred a material loss on any contracts. However, as a policy, provisions for estimated losses on such engagements
will be made during the period in which a loss becomes probable and can be reasonably estimated. If contract modifications result in
additional goods or services that are distinct from those transferred before the modification, they are accounted for prospectively as
if the Company entered into a new contract. If the goods or services in the modification are not distinct from those in the original
contract, sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs and
contract values.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
certain application development service arrangements, the Company sells and delivers IT equipment on standalone basis prior to the delivery
of the services. In these cases, the Company controls the IT equipment before they are transferred to the customer. The Company has the
right to direct the suppliers and control the goods or assets transferred to its customers. Thus, the Company considers it should recognize
revenue as a principal in the gross amount of consideration to which it is entitled in exchange for the IT equipment delivered. The Company
assesses the sale of equipment is separately identifiable from other promises in the contract and it is distinct performance obligation
within the context of the contract. Accordingly, the revenue from the related IT equipment based on its relative standalone selling price
is recognized upon customer acceptance after delivery.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)
Revenue from consulting and technical support services</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional
consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date
its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract
term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance
obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis
as customers receive and consume benefits of such services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)
Revenue from subscription services</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
from subscription services is comprised of subscription fees from customers accessing the Company&#8217;s software-as-a-service applications
for a subscribed period. The Company&#8217;s monthly or quarterly billing to customer is on the basis of number of uses or the actual
usage by the customers. The subscription arrangements are considered service contracts because customers do not have the right to take
possession of the software and can only benefit from the software when provided the right to access the software. Accordingly, the subscription
services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract
term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)
Trading revenue</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company started trading business (sales of consumables) for the year ended December 31, 2021 and recognized revenue at a point in time
when control of such products transfers to the customer, which generally occurs upon shipment or delivery depending on the terms of the
contracts with the customer. Product sale contracts typically include a single performance obligation and there are no rights of return.
The transaction price is based on the fixed contractual price with the customer. Billings to the customer for the sale of products occur
at the time the products are transferred to the customer. Revenue from trading business accounted for 31.8% of the Company&#8217;s revenue
for 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; text-indent: 0.3in"><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 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
includes reimbursements of travel and out-of-pocket expense, with equivalent amounts of expense recorded in cost of revenue. The Company
reports revenues net of value added tax (&#8220;VAT&#8221;). The Company&#8217;s subsidiaries in PRC are subject to a 6% to 13% value
added tax (&#8220;VAT&#8221;) and related surcharges on the revenues earned from providing services and products.</span></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"><b>&#160;</b></span></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"><i>Practical
Expedient and Exemptions</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company does not disclose the value of unsatisfied performance obligations within one year by applying the right to invoice practical
expedient provided by ASC 606-10-55-18.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><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 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Contract
costs</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Contract
costs include contract acquisition costs and contract fulfillment costs which are all recorded within prepayments, deposits, and other
assets in the consolidated balance sheets.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Contract
acquisition costs&#160;consist of incremental costs incurred by the Company to originate contracts with customers. Contract acquisition
costs, which generally include costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental
costs are expected to be recovered over the contract period. All other costs incurred regardless of obtaining a contract are expensed
as incurred. Contract acquisition costs are amortized over the period the costs are&#160;expected to contribute directly or indirectly
to future cash flows, which is generally&#160;over the contract term, on a basis consistent with the transfer of goods or services to
the customer to which the costs relate. Contract fulfillments costs&#160;consist of costs incurred by the Company to fulfill a contract
with a customer and are capitalized when the costs generate or enhance resources that will be used in satisfying future performance obligations
of the contract and the costs are expected to be recovered. Capitalized contract fulfillment costs generally include&#160;contracted
services, direct labor, materials, and allocable overhead directly related to resources required to fulfill the contract.&#160;Contract
fulfillment costs are recognized in cost of revenue during the period that the related costs are expected to contribute directly or indirectly
to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of goods or services to the
customer to which the costs are related. There were no contract fulfillment cost and contract acquisition costs as of December 31, 2022
and 2021.&#160;</span></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"><i>&#160;</i></span></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"><i><span style="text-decoration:underline">Contract
balance</span></i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accounts receivable includes both unbilled accounts receivable and billed accounts receivable. The Company records unbilled accounts
receivable for revenue that has been recognized in advance of billing the customer, which is common for application development service
contracts. The unbilled accounts receivable represents the Company&#8217;s right to consideration in exchange for the service that the
Company has performed to the customer before payment is due and the unbilled account receivable will be reclassified into billed accounts
receivable when the Company has the right to invoice. Contract liabilities are presented as customer deposits and deferred revenue on
the consolidated balance sheet. Contract liabilities relate to payments received in advance of completion of performance obligations
under a contract. Contract liabilities are recognized as revenue upon the completion of performance obligations. As of December 31, 2022
and 2021, the balance of customer deposits amounted to $483,735 and $575,303, respectively. As of December 31, 2022 and 2021 the balance
of deferred revenue amounted to $893,263 and $1,344,637, respectively.<i>&#160;</i></span></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">&#160;</span></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"><span style="text-decoration:underline">Income
taxes</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized
when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial
statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount expected to be realized.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
uncertain tax position is recognized as a benefit only if it is &#8220;more likely than not&#8221; that the tax position would be sustained
in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely 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 tax are classified as income tax expense in the period incurred. No significant penalties
or interest relating to income taxes have been incurred during the years ended December 31, 2022 and 2021. All of the tax returns of
the Company&#8217;s subsidiary in China remain subject to examination by the tax authorities for five years from the date of filing.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_009"></a></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: 0.25in; text-align: left">C.</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</b></span></td>
</tr></table><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><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 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<span style="text-decoration:underline">Directors and Senior Management</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Below
is a list of our directors, senior management and any employees upon whose work we are dependent as of the date of this Annual Report,
and a brief account of the business experience of each of them. The business address for our directors and officers is Advanced Business
Park, 9th Fl, Bldg C2, 29 Lanwan Lane, Hightech District, Zhuhai, Guangdong 519080, China</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: 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: 32%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name</b></span></td>
    <td style="width: 2%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 8%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Age</b></span></td>
    <td style="width: 2%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 56%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Position</b></span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stewart Lor</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">59</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CEO, President, and Chairman of the Board</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yuxia Xu</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">49</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer and Chief Operating Officer</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jing Deng</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">37</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Product Officer</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xuzhi Zhou</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">48</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Business Development Officer</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wei Jiang<sup>(1)(4)</sup></span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">50</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Director</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr. Haoqing Su<sup>(2)</sup></span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">60</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Director</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jian Sun<sup>(3)</sup></span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">44</span></td>
    <td>&#160;</td>
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</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">&#160;</span></p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Stewart
Lor </i></b>is a co-founder of our Company and served as our co-CEO and co-Chairman of the Board from October 2019 to July 2022. After
Mr. Ban Lor&#8217;s resignation from his position as the co-CEO and co-Chairman of the Board on July 29, 2022, Mr. Stewart Lor has been
serving as our sole CEO and Chairman of the Board. Mr. Lor has been serving on our Board and as our CFO since August 2018, and as our
President since October 2019. Mr. Lor ceased to act as the CFO of the Company on April 15, 2022. Previously, he served on our Board and
as our Chief Operating Officer from October 1997 to September 2006. Mr. Lor served as President of Lorons International Corporation from
August 1988 to October 1995. He had served various executive positions at Cmark Holdings Ltd. and Fanz Co., Ltd. from November 2006 to
September 2017. He holds a B.S. in Biochemistry from State University of New York at Stony Brook. We believe he is qualified to serve
on the Board because of the perspective and experience he brings as our cofounder.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Yuxia
Xu</i></b> is appointed as Chief Financial Officer and Chief Operating Officer of the Company, with effect from May 1, 2022, and appointed
as an executive director of the Company on October 28, 2022. Ms. Xu is a seasoned and proven professional in the fields of capital markets,
accounting management, information technology and management consulting. She had served as a Senior Consultant to the Company since 2017
and had previously held various management and operations positions, including: Chief Operating Officer at Fanz Corporation, an entertainment
technology company; Managing Director at Cmark Capital, a financial services and investment firm; Vice President at Ntechnology, a software
provider and Senior Software Engineer at Goldenspider, an accounting software company. Ms. Xu holds a Master of Science in Applied Mathematics
from Dalian University of Technology.</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Jing
Deng</i></b> currently serves as the Chief Product Officer at Powerbridge Technologies. Prior to joining the Company, he served various
management positions in technology operations, business development, product design and applications development at software and technology
companies including Kingdee Software and Ygsoft Corporation. Mr. Deng holds a Bachelor&#8217;s degree in Software Engineering from Beijing
Institute of Technology.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.7pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Xuzhi
Zhou</i></b> currently serves as the Chief Business Development Officer at Powerbridge Technologies. Previously, Mr. Zhou had served
various management positions in logistics management, financial services, supply chain, platform services and business development for
Chinasoft Resource, ZTE Communications and Hoolinks Technologies. Mr. Zhou holds a Bachelor&#8217;s degree in Computer Science from Shanxi
University.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.7pt"><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 0; text-align: justify; text-indent: 35.7pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Haoqing
Su </i></b>is appointed as an Independent Director of the Board and serves as Chairman of the Nominating Committee and Member of the
Compensation Committee and the Audit Committee. Mr. Su cofounded and served in various executive and operations positions in several
internationally based companies in international trade of auto parts, manufacturing of textile products, consumer food and beverage service,
and investment consulting and management. He is an avid investor and collector of antique collectibles and has a vast collection of antique
bronze and jade, ancient porcelain and coins, traditional paintings and other antique collectibles. He holds a Bachelor degree in Physical
Education from Guangzhou Sport University.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Wei
Jiang</i></b> is an independent director of the Company. Ms. Jiang has over twenty years of experiences in the finance and accounting
field. Previously, she served as a CFO at Cmark Capital, an investment management firm, Senior Accountant at Aluminum Corporation of
China, an aluminum producer and distributor, and Financial Manager at Hiking Group, a publicly listed company. Ms. Jiang holds a bachelor&#8217;s
degree in Financial Management from China University of Petroleum and is a Certified Accountant.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Jian
Sun</i></b> is an independent director of the Company. Mr. Sun has multiple years of experience in financial investment and management.
Mr. Sun is an investor and expert in blockchain and will provide strategic guidance to the Company on its blockchain business, including
financial operations, investment management and strategic partnerships. Mr. Sun holds a master&#8217;s degree from Australian National
University, and he also serves as the co-president of CUC China-US Blockchain Association.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Wei Guan resigned from his position as the independent Director of the Company, effective from April 18, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Ban Lor resigned from his position as the Co-Chief Executive Officer and Co-Chairman of the Board, effective from July 30, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Ruizhong Jiang resigned from his position as the independent Director of the Company for personal reason effective from October 28, 2022.</span></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><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>
    </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: 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Tianfei Feng resigned from his position as the Chief Research &amp; Development Officer of the Company, effective from February 28, 2022.
Mr. Liping Shu resigned from his position as the Chief Marketing Officer of the Company, effective from April 15, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None
of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the
ability or integrity of any of our directors, director nominees or executive officers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Limitation
on Liability and Other Indemnification Matters</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Companies Act does not limit the extent to which the Fourth Amended and Restated Memorandum and Articles of Association may provide for
indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary
to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Fourth Amended
and Restated Memorandum and Articles of Association permit indemnification of officers and directors for losses, damages, costs and expenses
incurred in their capacities as such unless such losses or damages arise from dishonesty of such directors or officers willful default
of fraud. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling
us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Compensation of Directors and Executive Officers</span></span></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>&#160;</b></span></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; font-size: 10pt"><b>Executive
Compensation</b>&#160;&#160;</span></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; font-size: 10pt"><b>&#160;</b></span></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>Summary
Compensation Table </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth all cash compensation paid by us, as well as certain other compensation paid or accrued, in fiscal 2022, 2021
and 2020 to each of the following named executive officers.</span></p><div>

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

</div><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: 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="text-align: left">&#160;</td></tr>
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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><td>&#160;</td>
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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-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointed
Chairman, President and CEO effective as of August 2018 and resigned as President as of October 2019, resigned as the Co-Chief Executive
Officer and Co-Chairman of the Board as of July 30, 2022.</span></td>
</tr></table><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">&#160;&#160;</span></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">(2)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointed
CFO effective as of August 2018 and appointed as co-Chairman and co-CEO as of October 2019. Stewart Lor ceased to act as CFO in April
2022.</span></td>
</tr></table><div>

</div><p style="margin: 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">(3)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointed
CFO and Chief Operating Officer, with effect from May 1, 2022.</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">(4)</td><td style="text-align: justify">Amounts reported in this column refer to the cash bonus granted
to CEO and CFO provided by the Company with respect to their contribution to date approved by Compensation Committee of the Company.
Cash bonuses are paid in accordance with general compensation plan of the Company to reward and further incentive officers for achievement
of the Company&#8217;s business strategy and development goals.</td>
</tr></table><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">&#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="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
PRC laws, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month
prior to the date on which the employment agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate
an employment agreement in the absence of cause, then we are obligated to pay the employee one month&#8217;s salary for each year we
have employed the employee. We are, however, permitted to terminate an employee for cause without notice or penalty to our company, where
the employee has committed a crime or the employee&#8217;s actions or inactions have resulted in a material adverse effect to us.</span></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">&#160;</span></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"><b>Employment
Agreements </b></span></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"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is
employed for a specified time period. The term will automatically extend for additional 12-month periods unless a party to the agreement
terminates it upon 3-months&#8217; notice or proposes to re-negotiate the terms of the employment with the other party within 3 months
prior to the expiration of the applicable term, or unless the employment is terminated earlier pursuant to the terms of the agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
executive officer has agreed to hold, both during and after the termination or expiry or her employment agreement, in strict confidence
and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable
law, any of our confidential information or trade secrets, any confidential information or trade secrets of our clients or prospective
clients, or the confidential or proprietary information of any third party received by us and for which we have confidential obligations.
The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive,
develop or reduce to practice during the executive officer&#8217;s employment with us and to assign all right, title and interest in
them to us, and assist us in obtaining and enforcing patents. Copyrights and other legal rights for these inventions, designs and trade
secrets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or
her employment and typically for one year following the last date of employment. Specifically, each executive officer has agreed not
to (i) solicit from any customer doing business with us during the effective term of the employment agreement business of the same or
of a similar nature to our business; (ii) solicit from any of our known potential customer business of the same or of a similar nature
to that which has been the subject of our known written or oral bid, offer or proposal, or of substantial preparation with a view to
making such a bid, proposal or offer; (iii) solicit the employment or services of, or hire or engage, any person who is known to be employed
or engaged by us; or (iv) otherwise interfere with our business or accounts, including, but not limited to with respect to any relationship
or agreement between any vendor or supplier and us.</span></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"><i>&#160;</i></span></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"><b>Director
Compensation </b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
directors may receive such remuneration as our Board may determine from time to time. Each director is entitled to be repaid or prepaid
for all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our Board or
committees of our Board or general meetings or separate meetings of any class of shares or of debenture of the Company or otherwise in
connection with the discharge of his or her duties as a director. Employee directors are entitled to receive $4,500 payable quarterly
for their services. Non-employee directors are entitled to receive stock option to purchase certain number of Ordinary Shares under the
Company&#8217;s 2018 Stock Option Plan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></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><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: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>2018
Stock Option Plan</i></span></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"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
adopted the 2018 Stock Option Plan (the &#8220;2018 Plan&#8221;) on April 4, 2019 (the &#8220;Effective Date&#8221;), which was further
amended by the First Amendment to the 2018 Plan (the &#8220;First Amendment&#8221;, and collectively referred to as the &#8220;Plan&#8221;
with the &#8220;2018 Plan&#8221;). The Plan is a stock-based compensation plan that provides for discretionary grants of stock options
to key employees, directors and consultants of the Company. The purpose of the Plan is to recognize contributions made to our Company
and its subsidiaries by such individuals and to provide them with additional incentive to achieve the objectives of our Company. Section
3(a) and 6(f) are amended as the following. The total number of Ordinary Shares issuable upon the exercise of all outstanding Options
granted under the Plan shall not exceed 20% of the total number of outstanding Ordinary Shares.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 4, 2019, the Board approved several restricted stock options grants to the members of executive management and the Board of the
Company pursuant to the terms of the Plan. Specifically, the Company granted an aggregate of 1,050,500 stock options to key employees
and directors under the Plan. Stock options granted to key employees and directors generally have a term of three years, but are subject
to earlier termination in connection with termination of continuous service to the Company. Stock options are valid for a period of 10
years from April 4, 2019 to April 5, 2029. As at the grant date of April 4, 2019, the weighted-average fair value per share was $5.00
and the estimated total fair value of the restricted shares granted was $5,252,500.&#160;No grants were made in fiscal year 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 23, 2020, the Board approved to register all the shares issuable under the Company&#8217;s 2018 Amended Option Plan in a registration
statement on a Form S-8 (File No. 333-253408), representing 9,155,464 ordinary shares issuable under our Amended 2018 Stock Option Plan
(the &#8220;<b>First Amendment&#8221;</b>). The Company has issued certain options to the employees, advisors, and consultants (collectively
the &#8220;Participants&#8221;) of the Company under the Amended Plan to purchase in an aggregate amount of 9,155,464 Ordinary Shares
the grants have been made under the plan as of the date hereof. The following is a summary of the Plan and is qualified by the full text
of the Plan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 16. 2022, the Board approved to the proposal to modify the Company&#8217;s Amended 2018 Stock Option Plan (the &#8220;<b>Second
Amendment</b>&#8221;, and collectively with the 2018 Plan and the First Amendment, the &#8220;<b>Amended 2018 Plan</b>&#8221;) by supplementing
various clauses in relation to the grant of Restricted Shares and Restricted Shares Units to the employees, directors and consultants.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 8, 2022, the Board approved to register all the shares issuable under the Company&#8217;s Amended 2018 Stock Option Plan in a registration
statement on a Form S-8 (File No. 333-266092), representing 19,970,545 ordinary shares issuable under our Amended 2018 Plan. The Company
has granted certain Restricted Shares and Restricted Shares Units to the Participants of the Company under the Amended Plan to purchase
in an aggregate amount of 12,000,000 Ordinary Shares and the grants have been made under such plan as of the date hereof.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 20, 2023, the Board approved to register all the shares issuable under the Company&#8217;s Amended 2018 Plan in a registration
statement on a Form S-8 (File No. 333-269513) representing additional 62,273,499 Ordinary Shares of the Company reserved for issuance
under the Amended 2018 Plan, which are in addition to the 19,970,545 Ordinary Shares registered on the Prior Registration Statement.
Accordingly, the number of ordinary shares of the Company issuable upon the exercise of all outstanding options granted under the Amended
2018 Plan is 82,244,044 ordinary shares.</span></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"></p><div>

</div><!-- Field: Page; Sequence: 97; Value: 89 --><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 -->92<!-- Field: /Sequence --></p></div><div>
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</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Administration</i>.
The Plan will be administered by our Board, or, once constituted, the Compensation Committee of the Board (we refer to body administering
the Plan as the &#8220;Committee&#8221;).</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Number
of Ordinary Shares. </i>The number of Ordinary Shares that may be issued under the Plan is the total number of Ordinary Shares in the
capital of the Company issuable upon the exercise of all outstanding Options granted under this Plan shall not at any time exceed 20%
of the total number of outstanding Ordinary Shares at the time of issuance, from time to time. If there is a forfeiture or termination
without the delivery of Ordinary Shares or of other consideration of any option made under the Plan, the Ordinary Shares underlying such
option, or the number of Ordinary Shares otherwise counted against the aggregate number of Ordinary Shares available under the Plan with
respect to the option, to the extent of any such forfeiture or termination, shall again be, or shall become, available for granting options
under the Plan. The number of Ordinary Shares issuable under the Plan is subject to adjustment, in the event in the event of any reorganization,
recapitalization, stock split, stock distribution, merger, consolidation, split-up, spin-off, combination, subdivision, consolidation
or exchange of shares, any change in the capital structure of the company or any similar corporate transaction. Except as the Board or
the Committee determines, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Option. In the
event of a spin-off transaction, the Board or the Committee may in its discretion make such adjustments and take such other action as
it deems appropriate with respect to outstanding Options under the Plan.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Eligibility</i>.
All persons as the Board or the Committee may select from among the employees, directors, and consultants of the Company.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Stock
Options</i>. The Board or Committee shall determine the provisions, terms, and conditions of each option including, but not limited to,
the option vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, shares, cashless
settlement, or other consideration) upon settlement of the option, payment contingencies and the exercise price; each option will last
for the term stated in the option agreement, provided, however that in the case of an option that is to qualify as an Incentive Share
Option as such term is defined in Section 422 of the Code, the term shall not exceed ten (10) years. It is intended that stock options
qualify as &#8220;performance based compensation&#8221; under Section 162(m) of the Code and thus be fully deductible by us for federal
income tax purposes, to the extent permitted by law.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Payment
for Stock Options and Withholding Taxes</i>. The Board or Committee may make one or more of the following methods available for payment
of an option, including the exercise price of a stock option, and for payment of the minimum required tax obligation associated with
an award: (i) cash&#894; (ii) cheque &#894; (iii) with respect to options, payment through a broker-dealer sale and remittance procedure
pursuant to which the optionee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate
sale of some or all of the purchased Ordinary Shares and remit to the Company sufficient funds to cover the aggregate exercise price
payable for the purchased Ordinary Shares and (B) shall provide written directives to the Company to deliver the certificates for the
purchased Ordinary Shares directly to such brokerage firm in order to complete the sale transaction&#894; (iv) cashless election; or
(v) any combination of the foregoing methods of payment.</span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
Ordinary Shares shall be delivered under the Plan to any optionee or other person until such optionee or other person has made arrangements
acceptable to the Board or Committee for the satisfaction of any national, provincial or local income and employment tax withholding
obligations. Upon exercise of an option the Company shall have the right, but not the obligation (except as required by the applicable
laws), to withhold or collect from optionee an amount sufficient to satisfy such tax obligations. The optionee will be solely responsible
for his/her own tax obligations.</span></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">&#160;</span></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: center"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Transferability
of Option</i>. Options shall be transferable (i) at will and by the laws of succession and distribution; (ii) during the lifetime of
the Optionee, to the extent and in the manner authorized by the Administrator; and (iii) upon delivery of a written assignment of the
Options duly executed by the Optionee at the principal office of the Company, along with the Options and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. The Optionee shall surrender its Options to the Company within seven (7) calendar
days of the date on which the Optionee delivers the assignment form to the Company assigning its Options. Upon such surrender and, if
required, such payment, the Company shall execute and deliver new Options in the name of the assignee and shall promptly cancel the surrendered
Options. Notwithstanding the foregoing, the Optionee may designate one or more beneficiaries of the Optionee&#8217;s Option in the event
of the Optionee&#8217;s death on a beneficiary designation form provided by the Administrator&#8221;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Amendment
of Award Agreements; Amendment and Termination of the Plan; Term of the Plan</i>. The Board may at any time amend, suspend or terminate
the Plan&#894; provided, however, that no such amendment shall be made without the approval of the Company&#8217;s shareholders to the
extent such approval is required by applicable laws, or if such amendment would adversely affect the right of any participant under any
agreement in any material way without the written consent of the participant. No option may be granted during any suspension of the Plan
or after termination of the Plan. No suspension or termination of the Plan shall adversely affect any rights under options already granted
to an optionee. The Plan has become effective on the date of the effectiveness of the Company&#8217;s initial public offering. It shall
continue in effect for a term of ten (10) years unless sooner terminated or unless renewed for another period not to exceed ten (10)
years pursuant to shareholder approval.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 26, 2021, the Board approved to issue certain options to its employees, advisors, and consultants of the Company under the Amended
Plan to purchase in an aggregate amount of 7,604,964 ordinary shares, par value $0.00166667 per share to be governed by the terms and
conditions set forth in a form of option agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notwithstanding
the foregoing, neither the Plan nor any outstanding option agreement can be amended in a way that results in the repricing of a stock
option. Repricing is broadly defined to include reducing the exercise price of a stock option or cancelling a stock option in exchange
for cash, other stock options with a lower exercise price or other stock awards. (This prohibition on repricing without shareholder approval
does not apply in case of an equitable adjustment to the awards to reflect changes in the capital structure of the company or similar
events.)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Board Practices</span></span></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"><b>&#160;</b></span></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"><i>Composition
of Board; Risk Oversight </i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board presently consists of five (5) directors. Pursuant to our Fourth Amended and Restated Memorandum and Articles of Association, the
number of our board shall not be less than two (2). At any one time, at least majority of the Board shall be independent directors. Our
shareholders may elect new director either to fill in a vacancy or add additional member to the Board via ordinary resolutions and the
directors may appoint any new director to fill a vacancy or as a member to the Board until the next annual meeting of the Company. The
directors have been divided into two classes, being the class I directors (the &#8220;Class I Directors&#8221;) and the class II directors
(the &#8220;Class II Directors&#8221;) immediately prior to the consummation of Company&#8217;s IPO. The number of directors in each
class shall be as nearly equal as possible. The Class I Directors shall stand elected for a term expiring at the Company&#8217;s initial
meeting after the adoption of the Fourth Amended and Restated Memorandum and Articles of Association and the Class II Directors shall
stand elected for a term expiring at the Company&#8217;s third annual general meeting following the initial meeting. Directors elected
to succeed those Class I Directors whose terms expire shall be elected for a term of office to expire at the first annual general meeting
following their election and directors elected to succeed those Class II Directors whose terms expire shall be elected for a term of
office to expire at the third annual general meeting following their election. The initial members of Class I Directors are Yuping Ouyang
and Bo Wu. The initial members of Class II Directors are Ban Lor and Stewart Lor. A director will be removed from office automatically
if, among other things, the director becomes bankrupt or has a receiving order made against him or suspends payment or compounds with
his creditors, or becomes of unsound mind or dies. Except for the sibling relationship between Mr. Ban Lor and Mr. Stewart Lor, there
is no family relationships between any of our executive officers and directors. Officers are elected by, and serve at the discretion
of the Board. Our Board may meet for the dispatch of business, adjourn and otherwise regulate its meetings as it considers appropriate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the NASDAQ rules, we are required to maintain a Board comprised of at least 50% independent directors, and an audit committee of at least
three members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Exchange Act. There are
no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us
in a general meeting. There are no other arrangements or understandings pursuant to which our directors are selected or nominated. However,
the NASDAQ rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. We have utilized
the exemption afforded by Nasdaq Listing Rule 5615(a)(3) to follow home country practice in lieu of certain requirements, including (i)
the independence requirements for compensation committee and nomination committee as provided in Nasdaq Listing Rule 5605(d) and (e);
(ii) the requirement that a majority of the board must be independent as provided in Nasdaq Listing Rule 5615(b)(1); (iii) the requirement
to hold annual general meeting as provided in Nasdaq Listing Rule 5620(a); and and (iv) the requirement to obtain shareholder approval
prior to a plan or other equity compensation arrangement is established or materially amended as provided in Nasdaq Listing Rule 5635(c).</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
our Fourth Amended and Restated Memorandum and Articles of Association, we shall hold an annual general meeting in each year other than
the year in which the Fourth Amended and Restated Memorandum and Articles of Association were adopted and shall specify the meeting as
such in the notices calling it. The annual general meeting shall be held at such time and place as the Board shall appoint.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board plays a significant role in our risk oversight. The Board makes all relevant company decisions. As such, it is important for us
to have our CEO serve on the board as he plays key roles in the risk oversight or the Company. As a smaller reporting company with a
small Board, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.</span></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">&#160;</span></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"><i>Director
Independence</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board has reviewed the independence of our directors, applying the NASDAQ independence standards. Based on this review, the board determined
that each of Wei Jiang, Haoqing Su and Jian Sun are &#8220;independent&#8221; within the meaning of the NASDAQ rules. In making this
determination, our board considered the relationships that each of these non-employee directors has with us and all other facts and circumstances
our board deemed relevant in determining their independence. As required under applicable NASDAQ rules, we anticipate that our independent
directors will meet on a regular basis as often as necessary to fulfill their responsibilities, including at least annually in executive
session without the presence of non-independent directors and management.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
three committees have been established under the Board: the Audit Committee, the Compensation Committee and the Nominating Committee.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Audit Committee is responsible for overseeing the accounting and financial reporting processes of our company and audits of the financial
statements of our Company, including the appointment, compensation and oversight of the work of our independent auditors. The Compensation
Committee of the Board reviews and makes recommendations to the Board regarding our compensation policies for our officers and all forms
of compensation, and also administers our incentive compensation plans and equity-based plans (but our Board retains the authority to
interpret those plans). The Nominating Committee of the Board is responsible for the assessment of the performance of the Board, considering
and making recommendations to the Board with respect to the nominations or elections of directors and other governance issues. The nominating
committee considers diversity of opinion and experience when nominating directors.</span></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>&#160;</b></span></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>Audit
Committee</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Audit Committee is responsible for, among other matters:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">appointing,
    compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">discussing
    with our independent registered public accounting firm the independence of its members from its management;</span></td></tr>
  </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: 10pt">&#160;&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    with our independent registered public accounting firm the scope and results of their audit;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">approving
    all audit and permissible non-audit services to be performed by our independent registered public accounting firm;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">overseeing
    the financial reporting process and discussing with management and our independent registered public accounting firm the interim
    and annual financial statements that we file with the SEC;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory
    requirements;</span></td></tr>
  </table><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">&#160;</span></p><div>


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</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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">coordinating
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">establishing
    procedures for the confidential and anonymous submission of concerns regarding accounting, internal controls or auditing matters;
    and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
our Audit Committee consists of three members, Wei Jiang, Jian Sun and Haoqing su, with Wei Jiang serving as the chairman of the Audit
Committee. Our Board has affirmatively determined that each of the members of the Audit Committee meets the definition of &#8220;independent
director&#8221; for purposes of serving on an Audit Committee under Rule 10A-3 of the Exchange Act and NASDAQ rules. In addition, our
Board has determined that Wei Jiang qualifies as an &#8220;audit committee financial expert&#8221; as such term is currently defined
in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules.</span></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">&#160;</span></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>Compensation
Committee</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Compensation Committee is responsible for, among other matters:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">administering
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    and approving employment agreements and other similar arrangements between us and our executive officers; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">appointing
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Compensation Committee consists of three members, Wei Jiang, Haoqing Su and Jian Sun, with Jian Sun serving as the chair of Compensation
Committee. Our Board has affirmatively determined that each of the members of the Compensation Committee meets the definition of &#8220;independent
director&#8221; for purposes of serving on Compensation Committee under NASDAQ rules.</span></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">&#160;</span></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>Nominating
Committee</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Nominating Committee is responsible for, among other matters:</span></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">&#160;</span></p><div>

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    and making recommendations regarding the structure and composition of our Board and the Board committees;</span></td></tr>
  </table><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">&#160;&#160;</span></p><div>

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">overseeing
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Nominating Committee consists of consists of three members, Jian Sun, Hoaqing Su and Wei Jiang, with Haoqing Su serving as chair of the
Nominating Committee. Our Board has affirmatively determined that each of the members of the Nominating Committee meets the definition
of &#8220;independent director&#8221; for purposes of serving on a Nominating Committee under NASDAQ rules.</span></p><div>

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

</div><!-- Field: Page; Sequence: 101; Value: 89 --><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>
    </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"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Duties
of Directors </i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Cayman Islands law, our directors have a duty to act honestly, in good faith and in our best interests. Our directors also have a duty
to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling
their duty of care to us, our directors must ensure compliance with our Fourth Amended and Restated Memorandum and Articles of Association.
We have the right to seek damages if a duty owed by our directors is breached.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
functions and powers of our Board include, among others:</span></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">&#160;</span></p><div>

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exercising
    the borrowing powers of the Company and mortgaging the property of the Company;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">giving
    to any Directors, officers or employees of the Company an interest in any particular business or transaction or participation in
    the profits thereof or in the general profits of the Company either in addition to or in substitution for a salary or other remuneration;
    and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">resolving
    that the Company be deregistered in the Cayman Islands and continued in a named jurisdiction outside the Cayman Islands subject to
    the provisions of the Companies Act.</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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Interested
Transactions </i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or
she is interested. A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or
she is interested in a transaction we have entered into or are to enter into. A general notice or disclosure to the board or otherwise
contained in the minutes of a meeting or a written resolution of the board or any committee of the Board that a director is a shareholder,
director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or
company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any
particular transaction.</span></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">&#160;</span></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"><i>Remuneration
and Borrowing </i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
directors may receive such remuneration as our Board may determine from time to time. For the&#160;services rendered&#160;by the independent
director in any capacity the company will a cash fee in the amount of USD$1,500 per month. Each director is entitled to be repaid or
prepaid for all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our
Board or committees of our Board or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director.
The Compensation Committee will assist the directors in reviewing and approving the compensation structure for the directors. Our Board
may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof,
to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation
of the Company or of any third party.</span></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">&#160;&#160;</span></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">D.
<span style="text-decoration:underline">Employees</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this Annual Report, we had a total of 177 full-time employees, of which 90 are in research and development, 17 are in
sales and marketing, 38 are in technical and customer services, and 32 are in general administration.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have standard employment, comprehensive confidentiality and non-compete agreements with our management and standard confidentiality and
non-compete terms with all other employees. As required by the laws and regulations in China, we participate in various social security
plans that are organized by municipal and provincial governments, including pension insurance, medical insurance, unemployment insurance,
maternity insurance, job-related injury insurance and housing fund. We are required by PRC laws to make contributions to employee social
security 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.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that we maintain a good working relationship with our employees, and we have not experienced any labor disputes. None of our
employee is represented by a labor union or covered by collective bargaining agreements. We have not experienced any work stoppages.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.
<span style="text-decoration:underline">Share Ownership</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Item 7 below.</span></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>

</div><!-- Field: Page; Sequence: 102; Value: 89 --><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 -->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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_010"></a></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>Item
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</b></span></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">&#160;</span></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">A.
<span style="text-decoration:underline">Major Shareholders</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following tables set forth certain information with respect to the beneficial ownership of our Ordinary Shares for:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
    stockholder known by us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares;</span></td></tr>
  </table><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>

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have determined beneficial ownership in accordance with the rules of the SEC. Under such rules, beneficial ownership includes any shares
over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right
to subscribe for within 60 days of the date of this Annual Report through the exercise of any warrants or other rights. Except as indicated
by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below
have sole voting and investment power or the power to receive the economic benefit with respect to all Ordinary Shares that they beneficially
own, subject to applicable community property laws. None of the stockholders listed in the table are a broker-dealer or an affiliate
of a broker dealer. None of the stockholders listed in the table are located in the United States and none of the Ordinary Shares held
by them are located in the United States. Applicable percentage ownership is based on 935,444,817 Ordinary Shares outstanding as of April
21, 2023. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Powerbridge, c/o Advanced
Business Park, 9th Fl, Bldg C2, 29 Lanwan Lane, Hightech District, Zhuhai, Guangdong 519080, China.</span></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">&#160;</span></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; vertical-align: bottom">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt; vertical-align: bottom">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold; vertical-align: bottom">Name of Beneficial Owner</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt; vertical-align: bottom">&#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><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wei Jiang <sup>(3)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yuxia Xu <sup>(4)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></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">Xuzhi Zhou</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Jing Deng</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <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="font-weight: bold; text-align: left">All directors and executive officers as a group</td><td style="font-weight: bold; font-style: italic">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <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></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <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></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">5% or greater beneficial owners as a group</td><td style="font-weight: bold; font-style: italic">&#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="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less
    than 1%. </span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes
    (i) 59,647,297Ordinary Shares held by Hogstream International Ltd., a British Virgin Islands company wholly-owned by Stewart Lor
    (&#8220;Hogstream&#8221;). Mr. Lor maintains sole voting control over the shares held by Hogstream, the principal office address
    of which is at Sertus Incorporation (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastsky Building, Road Town, Tortola, British
    Virgin Islands. (ii) Argo Advisory entered into a share purchase agreement dated April 14, 2022 with Hogstream pursuant to which
    Argo Advisory agreed to transfer 10,000,000 Ordinary Shares to Hogstream at a unit price calculated pursuant to the previous day&#8217;s
    closing price per share after a discount of 20%, for a total consideration of USD$2,536,000. Argo Advisory subsequently transferred
    the above-mentioned 10,000,000 Ordinary Shares to Hogstream on April 20, 2022. (iii) On December 8, 2022, two shareholders entered
    into separate security purchase agreements with Hogstream, pursuant to which each of the two shareholders agreed to sell 9,251,125
    Ordinary Shares to Hogstream at a price of US$0.087 per share for an aggregate total consideration of US$1,614,876. Upon the closing
    of the transactions on December 16, 2022, the two shareholderstransferred an aggregate 18,502,250 Ordinary Shares to Hogstream. (iv)
    An aggregate of 29,835,664 Ordinary Shares acquired by Hogstream, of which (iv.i) 505,920 Ordinary Shares were acquired in the open
    market in December 2022; and (iv.ii) 13,966,544 Ordinary Shares were acquired pursuant to the security purchase agreement dated March
    10, 2023, entered between Hogstream and an existing shareholder of the Issuer; and (iv.iii) 15,363,200 Ordinary Shares were acquired
    pursuant to the security purchase agreement dated March 10, 2023, entered between Hogstream and an existing shareholder of the Issuer.
    Reference is made to the Company&#8217;s report on Amendment No.4 to the Schedule 13D jointly filed by Stewart Lor and Hogstream
    with the Securities and Exchange Commission on March 22, 2023 for more details on the transaction.</span></td></tr>
  </table><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">&#160;</span></p><div>




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

</div><!-- Field: Page; Sequence: 103; Value: 89 --><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 -->98<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes
    (i) 5,814,851 ordinary shares was acquired by Mr. Su pursuant to the security purchase agreement dated December 16, 2022, entered
    between Mr.Su, other Boxinrui&#8217;s shareholders and Powerbridge Cayman; (ii) 25,080,270 ordinary shares was acquired by Mr. Su
    pursuant to the security purchase agreement dated March 28, 2023, entered between Mr.Su, other Boxinrui&#8217;s shareholders and
    Powerbridge Cayman.</span></td></tr>
  </table><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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes
    828,000 Ordinary Shares underlying share options held by Wei Jiang that is exercisable within 60 days after the date of this Annual
    Report.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes
    744,964 Ordinary Shares underlying share options held by Yuxia Xu that is exercisable within 60 days after the date of this Annual
    Report.</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; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this Annual Report, there were 52 holders of record entered in our share register. The number of individual holders of
record is based exclusively upon our share register and does not address whether a share or shares may be held by the holder of record
on behalf of more than one person or institution who may be deemed to be the beneficial owner of a share or shares in our company.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
our knowledge, no other shareholder beneficially owns more than 5% of our shares. Our Company is not owned or controlled directly or
indirectly by any government or by any corporation or by any other natural or legal person severally or jointly. Our major shareholders
do not have any special voting rights. There are no arrangements, known to us, the operation of which may at a subsequent date result
in a change in control of our Company.</span></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">&#160;</span></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.
<span style="text-decoration:underline">Related Party Transactions</span>&#160;&#160;</span></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>&#160;
</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a description of transactions since the beginning of the Company&#8217;s preceding three financial years up to the date
hereof, in which the amount involved in the transaction exceeded or will exceed the lesser of $120,000 or one percent of the average
of our total assets as at the year-end for the last two completed fiscal years, and to which any of our directors, executive officers
or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with,
any of these individuals, had or will have a direct or indirect material interest.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Due
from related party</i>.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Guangzhou Jiatu Culture Media Co., Ltd. <sup>(1)</sup></span></td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">132,345</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shanghai Stamp Technology Co., Ltd. <sup>(2)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">172,811</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)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ling Lor <sup>(2)</sup></span></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">8,661</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ban Lor <sup>(2)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">37,638</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">706,148</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stewart Lor <sup>(2)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,566,478</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">781,284</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yuxia Xu <sup>(2)</sup></span></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">363,666</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="text-align: justify; padding-left: 9pt">Subtotal</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">2,140,593</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">1,628,438</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt">Less: allowance for doubtful accounts</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><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">(132,345</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 4pt">Due from related parties, net</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2,140,593</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,496,093</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table><div>


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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
    2020, the Company had consulting fee prepayment of $132,345 to Guangzhou Jiatu Culture Media Co., Ltd. as of December 31, 2021, which
    the Company has significant influence over with.&#160;&#160;Both parties negotiated to terminate the consulting service. The balance
    of $132,345 as of December 31, 2021 was fully allowanced in 2021. From April to June 2022, Guangzhou Jiatu Culture Media Co., Ltd.
    continued to provide equivalent services, so the allowance was recovered.&#160;&#160;On June 2, 2022, the Company&#8217;s CFO sold
    the equity interest in Jiatu Culture Media Co., Ltd., so Jiatu Culture Media Co., Ltd. no longer considered as a related party.</span></td></tr>
  </table><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>

</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="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
    time to time, the Company advances funds to senior management for business purpose.</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
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  </table><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"></p><div>

</div><!-- Field: Page; Sequence: 104; Value: 89 --><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 -->99<!-- 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"><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 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Due
to related party</i>.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#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)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">108,990</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hybridge Holding Limited <sup>(1)</sup></span></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="font-weight: bold; text-align: justify; padding-bottom: 4pt">Subtotal</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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    above balances represent unpaid loan and expenses to these related parties.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Accounts
payable-related party</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></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: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Guangzhou Guangrui <sup>(1)</sup></span></td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 4pt">Subtotal</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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></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: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
the disposal of Shantou Hongrui in Febuary 2022, Guangzhou Guangrui was no longer considered as a related party and the balance was reclassified
to account payable.</span></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Related
party transactions</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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: justify">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td>&#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></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 38%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Guangzhou Guangrui<sup>(1)</sup></span></td><td style="width: 1%">&#160;</td>
    <td style="width: 25%; text-align: left">Service fees</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">&#160;&#160;&#160;-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">Service fees</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">62,667</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</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="text-align: justify">Stewart Lor</td><td>&#160;</td>
    <td style="text-align: left">Interest income</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">117,569</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">Interest income</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">22,802</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Shanghai Stamp Technology Co., Ltd.</td><td>&#160;</td>
    <td style="text-align: left">Interest income</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">1,771</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
the disposal of Shantou Hongrui in Febuary 2022, Guangzhou Guangrui was no longer considered as a related party.</span></td>
</tr></table><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">&#160;</span></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: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 2, 2022, the Company&#8217;s CFO sold the equity interest in Jiatu Culture Media Co., Ltd., so Jiatu Culture Media Co., Ltd. no
longer considered as a related party.</span></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Short
term bank loan</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 4, 2021, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $880,239 for a term
of one year and at a fixed annual interest rate of 4.5675%. The bank loan was guaranteed by a third party. The loan was fully repaid
upon maturity.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 11, 2021, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $688,979 for a term
of one year and at a fixed annual interest rate of 4.5675%. The bank loan was guaranteed by a third party. The loan was fully repaid
upon maturity.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 28, 2022, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $1,449,864 for a term
of one year and at a fixed annual interest rate of 4.70%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and
pledged approximately $2.4 million fixed assets as the collateral to secure the loan. The loan was fully repaid upon maturity subsequently.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 16, 2022, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $724,932 for a term
of one year and at a fixed annual interest rate of 4.10%. The bank loan was guaranteed by the Company&#8217;s CEO and CEO&#8217;s spouse.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;On
March 9, 2021, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $470,765 for a term of one year
and at a fixed annual interest rate of 4.50%. The bank loan was guaranteed by Mr. Ban Lor. The loan was fully repaid upon maturity.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 10, 2022, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $724,932 for a term of one year
and at a fixed annual interest rate of 4.50%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and pledged approximately
$1.8 million fixed assets as the collateral to secure the loan. On December 30, 2022, the Company partially repaid $289,973 in advance.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 15, 2022, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $724,932 for a term of one year
and at a fixed annual interest rate of 4.50%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and pledged approximately
$1.8 million fixed assets as the collateral to secure the loan. On December 30, 2022, the Company fully repaid the loan in advance.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 10, 2021, Powerbridge Zhuhai entered into a loan agreement with Guangfa Bank to obtain a loan of $2,353,828 for a term of one year
and at a fixed annual interest rate of 5.3%. The bank loan was guaranteed by Mr. Ban Lor and the company&#8217;s account receivable of
some programs was pledged to secure the loan. The loan was fully repaid upon maturity.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 16, 2023, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $520,174 for a term
of one year and at a fixed annual interest rate of 4.20%. The bank loan was guaranteed by the Company&#8217;s CEO, CEO&#8217;s spouse
and a third party.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 19, 2023, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $1,449,864 for a term
of one year and at a fixed annual interest rate of 4.20%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and
pledged approximately $2.4 million fixed assets as the collateral to secure the loan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 14, 2023, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $ 204,758 for a term
of one year and at a fixed annual interest rate of 4.20%. The bank loan was guaranteed by the Company&#8217;s CEO, CEO&#8217;s spouse
and a third party.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt"><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 0"></p><div>

</div><!-- Field: Page; Sequence: 106; Value: 89 --><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 -->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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Interests of Experts and Counsel</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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">&#160;</span></p><div>

</div><div><a id="a_011"></a></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"><b>Item
8. FINANCIAL INFORMATION</b></span></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">&#160;</span></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">A.
<span style="text-decoration:underline">Consolidated Statements and Other Financial Information</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Item 18 for our audited consolidated financial statements.</span></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">&#160;</span></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"><b>Legal
Proceedings</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, we are subject to legal proceedings, investigations and claims incidental to the conduct of our business. We are not currently
a party to any legal proceedings or investigations which, in the opinion of our management, is likely to have a material adverse effect
on our business, financial condition or results of operations.</span></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">&#160;</span></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"><b>Dividend
Policy</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders of our Ordinary Shares are entitled to dividends out of funds legally available when and as declared by our Board. Our Board
has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future
to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other
payments from our operating subsidiaries and other holdings and investments. In addition, our operating subsidiaries may, from time to
time, be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan
agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions.
In the event of our liquidation, dissolution or winding up, holders of our Ordinary Shares are entitled to receive, ratably, the net
assets available to shareholders after payment of all creditors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Significant Changes</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as disclosed elsewhere in this Annual Report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this Annual Report.</span></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">&#160;&#160;</span></p><div>

</div><div><a id="a_012"></a></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>Item
9. THE OFFER AND LISTING</b></span></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">&#160;</span></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">A.
<span style="text-decoration:underline">Offering and Listing Details.</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Registration Statement became effective on March 28, 2019. Our Ordinary Shares are currently listed on NASDAQ Capital Market under the
symbol &#8220;PBTS&#8221;.</span></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">&#160;</span></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.
<span style="text-decoration:underline">Plan of Distribution</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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; font-size: 10pt">&#160;</span></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">C.
<span style="text-decoration:underline">Markets</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Ordinary Shares are currently listed on NASDAQ Capital Market under the symbol &#8220;PBTS&#8221;.</span></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">&#160;</span></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">D.
<span style="text-decoration:underline">Selling Shareholders</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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">&#160;</span></p><div>




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

</div><!-- Field: Page; Sequence: 107; Value: 89 --><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 -->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"><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 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.
<span style="text-decoration:underline">Dilution</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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">&#160;</span></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">F.
<span style="text-decoration:underline">Expenses of the Issue</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.&#160;</span></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>&#160;</b></span></p><div>

</div><div><a id="a_013"></a></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>Item
10. ADDITIONAL INFORMATION</b></span></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">&#160;</span></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">A.
<span style="text-decoration:underline">Share Capital</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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">&#160;</span></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.
<span style="text-decoration:underline">Amended and Restated Memorandum and Articles of Association </span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Fourth Amended and Restated Memorandum and Articles of Association were filed as Exhibit 10.1 of Form 6-K filed on November 6, 2020
and are hereby incorporated by reference into this Annual Report. The following description of our memorandum and articles of
association, as amended and restated from time to time, are summaries and do not purport to be complete. Reference is made to our
Fourth Amended and Restated Memorandum and Articles of Association, effective on September 30, 2020 (respectively, the
&#8220;Memorandum&#8221; and the &#8220;Articles&#8221;). We were incorporated as an exempted company with limited liability under
the Companies Act (2018 Revision) of the Cayman Islands, now the Companies Act (Revised) (&#8220;Cayman Companies Act&#8221;), on
July 27, 2018. A Cayman Islands exempted company:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">is
    a company that conducts its business mainly outside the Cayman Islands;</span></td></tr>
  </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: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">is
    prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted
    company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise
    in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);</span></td></tr>
  </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: 10pt">&#160;</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">does
    not have to make its register of members open to inspection by shareholders of that company;</span></td></tr>
  </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: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">may
    obtain an undertaking against the imposition of any future taxation;</span></td></tr>
  </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: 10pt">&#160;</span></p><div>

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; 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; margin: 0pt 0"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Our Ordinary Shares are issued in registered form, and
are issued when registered in our register of members. Unless and until the directors resolve to issue share certificates, no share certificate
shall be issued, and the records of the shareholdings of each shareholder shall be in uncertified book entry form. Our shareholders who
are non-residents of the Cayman Islands may freely hold and vote their Ordinary Shares. We may not issue shares or warrants to bearer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this Annual Report, the authorized share capital of the Company is US $16,666,700 divided into 10,000,000,000 shares of
US $0.00166667 par value each. Subject to the provisions of the Cayman Companies Act and the provisions, if any, of the Articles, and
any directions given by any ordinary resolution and the rights attaching to any class of existing shares, the directors may issue, allot,
grant options over or otherwise dispose of shares (including any fractions of Shares) and other securities of our company at such times,
to such persons, for such consideration and on such terms as the directors may determine. Such authority could be exercised by the directors
to allot shares which carry rights and privileges that are preferential to the rights attaching to ordinary shares provided that if such
operates to vary the rights of holders of ordinary shares then the sanction of a special resolution of the affected class is required.
No share may be issued at a discount except in accordance with the provisions of the Cayman Companies Act. The directors may refuse to
accept any application for shares, and may accept any application in whole or in part, for any reason or for no reason.</span></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>General.&#160;</i></b>The
unissued shares of the Company shall be at the disposal of the Board, under its absolute discretion, at such times and for such consideration
and upon such terms and conditions and for any reason, without limitation, but so that no shares shall be issued at a discount to par
value. Except as otherwise expressly provided in the resolution or resolutions providing for the establishment of any class or series
of preferred shares, no vote of the holders shall be a prerequisite to the issuance of any shares of any class or series of the preferred
shares authorized by and complying with the conditions of the Memorandum and Articles of Association. The board may issue options, warrants,
convertible securities or other similar nature securities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Dividends</i></b>.&#160;The
holders of our Ordinary Shares are entitled to such dividends as may be declared by our Board. Our Fourth Amended and Restated Memorandum
and Articles of Association provide that our Board may declare and pay dividends out of the profits of the Company, realized or unrealized,
or from any reserve set aside from profits which the directors determine is no longer needed, or out of share premium account or any
other fund or account which can be authorized for this purpose in accordance with the Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Voting
Rights.&#160;</i></b>In respect of all matters subject to a shareholder&#8217;s vote, at any general meeting on a show of hands every
Shareholder present in person (or being a corporation, is presented by a duly authorized representative), or by proxy shall have one
vote and on a poll every Shareholder present in person or by proxy or, in the case of a Shareholder being a corporation, by its duly
authorized representative shall have one vote for every share of which he is the holder but so that no amount paid up or credited as
paid up on a share in advance of calls or instalments is treated for the foregoing purposes as paid up on the share. A quorum required
for a meeting of shareholders consists of one shareholder who holds at least one-third of our issued voting shares. Shareholders&#8217;
meetings may be held annually. Each general meeting, other than an annual general meeting, shall be an extraordinary general meeting.
Extraordinary general meetings may be called by a majority of our Board or upon a requisition of shareholders holding at the date of
deposit of the requisition not less one-tenth of such of the paid-up share capital of our Company that carries the right to vote at a
general meeting, forthwith proceed to convene an extraordinary general meeting. An ordinary resolution to be passed at a meeting by the
shareholders requires the affirmative vote of a simple majority of the votes attaching to the Ordinary Shares cast at a meeting, while
a special resolution requires the affirmative vote of no less than two-thirds of the votes attaching to the Ordinary Shares cast at a
meeting. A special resolution will be required for important matters such as making changes to our Fourth Amended and Restated Memorandum
and Articles of Association.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Transfer
of Ordinary Shares.</i></b>&#160;Subject to the restrictions set out below, any of our shareholders may transfer all or any of his or
her Ordinary Shares by an instrument of transfer in the usual or common form prescribed by the NASDAQ Stock Market (the &#8220;Designated
Stock Exchange&#8221;) or in or any other form approved by our Board. Our Board may, in its absolute discretion, decline to register
any transfer of any Ordinary Shares only where such share is not a fully paid up share (and being transferred to a person of whom it
does not approve), or any share issued under any share incentive scheme for employees or pursuant to any other agreement, contract or
other such arrangement. If the Board refuses to register a transfer of any share, it shall, within three months after the date on which
the transfer was lodged with the Company, send to each of the transferor and transferee notice of the refusal. The registration of transfers
of shares or of any class of shares may, subject to compliance with any notice requirement of the Designated Stock Exchange, be suspended
at such times and for such periods (not exceeding in the whole thirty (30) days in any year) as the Board may determine.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Inspection
of Books and Records</i></b>.&#160;Holders of our Ordinary Shares have no general right under our Fourth Amended and Restated Memorandum
and Articles of Association to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide
our shareholders with annual audited financial statements. See &#8220;Where You Can Find Additional Information&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"></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; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Issuance
of Additional Shares.</i></b>&#160;Our memorandum of association authorizes our Board to issue additional Ordinary Shares from time to
time as our Board shall determine, to the extent of available authorized but unissued shares. Our memorandum of association also authorizes
our Board to establish from time to time one or more series of preference shares and to determine, with respect to any series of preference
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; text-align: justify; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    designation of the series to be issued;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    number of shares of the series;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    dividend rights, conversion rights, voting rights; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    liquidation preferences.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board may issue preference shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares
may dilute the voting power of holders of Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Anti-Takeover
Provisions.</i></b>&#160;Some provisions of our Fourth Amended and Restated 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 to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions
of such preference shares without any further vote or action by our shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Differences
in Corporate Law </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Companies Act is modeled after that of English law but does not follow many recent English law statutory enactments. In addition, the
Companies Act differs from laws which applicable to United States corporations and their shareholders. Set forth below is a summary of
some of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to the companies
incorporated in the State of Delaware.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Mergers
and Similar Arrangements.</i></b>&#160;The Companies Act permits mergers and consolidations between Cayman Islands companies and between
Cayman Islands companies and non-Cayman Islands companies. For these purposes, a &#8220;merger&#8221; means the merging of two or more
constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company,
and a &#8220;consolidation&#8221; means the combination of two or more constituent companies into a consolidated company and the vesting
of the undertaking, property and liabilities of such companies to the consolidated company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to effect a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation,
which must then be authorized by a special resolution of the shareholders of each constituent company, and such other authorization,
if any, as may be specified in such constituent company&#8217;s articles of association.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with, inter alia, a declaration
as to the solvency of each constituent company, a list of the assets and liabilities of each constituent company and an undertaking that
a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that
notification of the merger and consolidation will be published in the Cayman Islands Gazette. Dissenting shareholders have the right
to be paid the fair value of their shares if they follow the required procedures under the Companies Act subject to certain exceptions.
The fair value of the shares will be determined by the Cayman Islands court if it cannot be agreed among the parties. Court approval
is not required for a merger or consolidation effected in compliance with these statutory procedures.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement
is approved, for a creditor-led arrangement, by a majority in number of each class of creditors with whom the arrangement is to be made, and, in either a shareholder or a creditor arrangement, three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and
voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently
the arrangement must be sanctioned by the Grand Court of the Cayman Islands.</span></p><div>

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

</div><!-- Field: Page; Sequence: 110; Value: 89 --><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 -->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; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can
be expected to approve the arrangement if it determines that:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><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: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    statutory provisions as to the required majority vote have been met;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    shareholders have been fairly represented at the meeting in question;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">&#9679;</span></td>
    <td style="text-align: justify; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    arrangement is such that an intelligent and honest man of that class acting in respect of his interest would reasonably approve;
    and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">&#9679;</span></td>
    <td style="text-align: justify; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
a take-over offer is made and accepted by holders of not less than 90% of the shares within four months, the offer, or may, within a
two-month period conversing on the expiration of such four months period, require the holders of the remaining shares to transfer such
shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless
there is evidence of fraud, bad faith or collusion.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights,
which would otherwise ordinarily be available to the dissenting shareholders of United States corporations, providing rights to receive
payment in cash for the judicially determined value of the shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Shareholders&#8217;
Suits.</i></b>&#160;In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company and as a general
rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood
be of persuasive authority in the Cayman Islands, there are exceptions to the foregoing principle, including when:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    company acts or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholders;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    act complained of, although not ultra vires, could only be duly effected if authorized by more than a simple majority vote that has
    not been obtained; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">those
    who control the company are perpetrating a &#8220;fraud on the minority&#8221;.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Indemnification
of Directors and Executive Officers and Limitation of Liability</i></b>.&#160;The Companies Act does not limit the extent to which a
company&#8217;s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent
any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against
civil fraud or the consequences of committing a crime. Our Fourth Amended and Restated Memorandum and Articles of Association permit
indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses
or damages arise from dishonesty of such directors or officers willful default of fraud. This standard of conduct is generally the same
as permitted under the Delaware General Corporation Law for a Delaware corporation. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have
been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable.</span></p><div>

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

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</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: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Directors&#8217;
Fiduciary Duties.</i></b>&#160;Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation
and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director
act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director
must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction.
The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation.
He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that
the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling
shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed
basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption
may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by
a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company
and therefore it is considered that he or she owes the following duties to the company: a duty to act bona fide in the best interests
of the company, a duty not to make a profit based on his or her position as director (unless the company permits him or her to do so)
and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest
or his or her duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It
was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may
reasonably be expected from a person of his or her knowledge and experience. However, courts are moving towards an objective standard
with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Shareholder
Action by Written Consent.</i></b>&#160;Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders
to act by written consent by amendment to its certificate of incorporation. Cayman Islands law provides that shareholders may approve
corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to
vote on such matter at a general meeting without a meeting being held. Our Fourth Amended and Restated Memorandum and Articles of Association
provides that anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of
the shareholders may be done without a meeting by written resolution in accordance with such Third Amended and Restated Memorandum and
Articles of Association. A written resolution is passed when it is signed by (or in the case of a shareholder that is a corporation,
on behalf of) all the shareholders, or all the shareholders of the relevant class thereof, entitled to vote thereon, or in the case of
an ordinary resolution, the requisite majority, and may be signed in as many counterparts as may be necessary.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Shareholder
Proposals.</i></b>&#160;Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual
meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called
by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from
calling special meetings. The Companies Act provides shareholders with only limited rights to requisition a general meeting and does
not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in articles
of association. Our Fourth Amended and Restated Memorandum and Articles of Association allow our shareholders holding not less than 10%
of the share capital in issue to requisition a shareholder&#8217;s meeting. Other than this right to requisition a shareholders&#8217;
meeting, a shareholder may give notice to the Company of business proposed to be brought before an annual general meeting. As an exempted
Cayman Islands company, we are not obliged by law to call shareholders&#8217; annual general meetings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Cumulative
Voting.</i></b>&#160;Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless
the corporation&#8217;s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation
of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder
is entitled on a single director, which increases the shareholder&#8217;s voting power with respect to electing such director. There
are no prohibitions in relation to cumulative voting under the Companies Act but our Fourth Amended and Restated Memorandum and Articles
of Association do not provide for cumulative voting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Removal
of Directors.</i></b>&#160;Under the Delaware General Corporation Law, a director of a corporation with a may be removed with the approval
of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our Fourth
Amended and Restated Memorandum and Articles of Association, directors may be removed by way of a special resolution of our shareholders
at any time before the expiration of his or her period of office.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Transactions
with Interested Shareholders.</i></b>&#160;The Delaware General Corporation Law contains a business combination statute applicable to
Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its
certificate of incorporation, it is prohibited from engaging in certain business combinations with an &#8220;interested shareholder&#8221;
for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person
or a group who or which owns or owned 15% or more of the target&#8217;s outstanding voting share within the past three years. This has
the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not
be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested
shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming
an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition
transaction with the target&#8217;s board of directors. The Companies Act has no comparable statute. As a result, we cannot avail ourselves
of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate
transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide
in the best interests of the company and for a proper corporate purpose and not with the effect of constituting a fraud on the minority
shareholders.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Dissolution;
Winding up.</i></b>&#160;Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve,
dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated
by the board of directors may it be approved by a simple majority of the corporation&#8217;s outstanding shares. Delaware law allows
a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions
initiated by the board. Under the Companies Act, a company may be wound up by either an order of the courts of the Cayman Islands or
by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its
members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of
the court, just and equitable to do so. Under the Companies Act and our Fourth Amended and Restated Memorandum and Articles of Association,
our Company may be dissolved, liquidated or wound up by a special resolution of our shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Variation
of Rights of Shares.</i></b>&#160;Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares
with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.
Under the Companies Act and our Fourth Amended and Restated Memorandum and Articles of Association, if our share capital is divided into
more than one class of shares, we may vary the rights attached to any class with the sanction of a special resolution passed at a separate
general meeting of the holders of the shares of that class.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Amendment
of Governing Documents.</i></b>&#160;Under the Delaware General Corporation Law, a corporation&#8217;s governing documents may be amended
with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.
As permitted by the Companies Act, our Fourth Amended and Restated Memorandum and Articles of Association may only be amended with a
special resolution of our shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Rights
of Non-resident or Foreign Shareholders.</i></b>&#160;There are no limitations imposed by our Fourth Amended and Restated Memorandum
and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In
addition, there are no provisions in our Fourth Amended and Restated Memorandum and Articles of Association governing the ownership threshold
above which shareholder ownership must be disclosed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Material Contracts</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have not entered into any material contracts other than in the ordinary course of business and other than those described in &#8220;Item
4. Information on the Company&#8221;, &#8220;Item 5. Operating and Financial Review and Prospects &#8211; B. Liquidity and Capital Resources&#8221;,
&#8220;Item 7. Major Shareholders and Related Party Transactions &#8212; B. Related Party Transactions&#8221;, or elsewhere in this Annual
Report on Form 20-F.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
<span style="text-decoration:underline">Exchange Controls</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Cayman Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions
that affect the remittance of dividends, interest or other payments to nonresident holders of our shares.</span></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">&#160;</span></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">E.
<span style="text-decoration:underline">Taxation</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>The
following summary of the material Cayman Islands, PRC and U.S. federal income tax consequences of an investment in our Ordinary Shares
is based upon laws and relevant interpretations thereof in effect as of the date of this Annual Report, all of which are subject to changes.
This summary does not deal with all possible tax consequences relating to an investment in our Ordinary Shares, such as the tax consequences
under state, local and other tax laws. </i></span></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">&#160;&#160;</span></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"><b>Cayman
Islands Taxation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Cayman Islands currently levy 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 the Company 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 the Company. There are no exchange control regulations or currency restrictions in the Cayman Islands.</span></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">&#160;&#160;</span></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"><b>Material
PRC Income Tax Considerations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the new EIT Law and the Implementing Rules, an enterprise established outside of the PRC with &#8220;de facto management bodies&#8221;
within the PRC is considered as a resident enterprise and will be subject to a PRC income tax rate of 25% on its global income. According
to the Implementing Rules, &#8220;de facto management bodies&#8221; refer to &#8220;establishments that carry out substantial and overall
management and control over the manufacturing and business operations, personnel, accounting, properties, etc. of an enterprise&#8221;.
Accordingly, our holding company may be considered a resident enterprise and may therefore be subject to a PRC income tax on our global
income. The State Administration of Taxation issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated
Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, on April 22, 2009. Circular 82
provides certain specific criteria for determining whether the &#8220;de facto management body&#8221; of a Chinese-controlled offshore
incorporated enterprise is located in China. Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises
and not those invested in by individuals or foreign enterprises, the determining criteria set forth in Circular 82 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 offshore enterprises, regardless of whether they are controlled by PRC enterprises or controlled by or invested
in by individuals or foreign enterprises. If we are considered a resident enterprise and earn income other than dividends from our PRC
subsidiary, such PRC income tax on our global income could significantly increase our tax burden and materially and adversely affect
our cash flow and profitability.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not believe that Powerbridge meets all of the conditions required for PRC resident enterprise. The Company is a company incorporated
outside the PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located,
and its records (including the resolutions of its Board and the resolutions of its shareholders) are maintained, outside the PRC. For
the same reasons, we believe our other entities outside of China are not PRC resident enterprises either. 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;. There can be no assurance that the PRC government will ultimately take a view that is
consistent with ours.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
if the PRC tax authorities determine that Powerbridge is a PRC resident enterprise for enterprise income tax purposes, we may be required
to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. Such 10% tax rate could
be reduced by applicable tax treaties or similar arrangements between China and the jurisdiction of our shareholders. For example, for
shareholders eligible for the benefits of the tax treaty between China and Hong Kong, the tax rate is reduced to 5% for dividends if
relevant conditions are met. In addition, non-resident enterprise shareholders may be subject to a 10% PRC tax on gains realized on the
sale or other disposition of ordinary shares, if such income is treated as sourced from within the PRC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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: 114; Value: 89 --><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 -->109<!-- 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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC
individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends
or gains, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is
also unclear whether non-PRC shareholders of the 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 the Company is treated as a PRC resident enterprise.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provided
that our Cayman Islands holding company, Powerbridge, is not deemed to be a PRC resident enterprise, our shareholders who are not PRC
residents will not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of
our shares. However, under Circular 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. As a result, gains derived from such indirect transfer may be
subject to PRC enterprise income tax, and the transferee would be obligated to withhold the applicable taxes, currently at a rate of
10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being
required to file a return and being taxed under Circular 7, and we may be required to expend valuable resources to comply with Bulletin
37, or to establish that we should not be taxed under Circular 7 and Bulletin 37.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prospective
investors should consult with their own tax advisors regarding the applicability of any such taxes, the effects of any applicable income
tax treaties, and any available foreign tax credits.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></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>Material
U.S. Tax Considerations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a summary of the material U.S. federal income tax consequences of owning and disposing of our Ordinary Shares. The discussion
below of the U.S. federal income tax consequences to &#8220;U.S. Holders&#8221; will apply to a beneficial owner of our shares that is
for U.S. federal income tax purposes:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    individual citizen or resident of the United States;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) in or under
    the laws of the United States, any state thereof or the District of Columbia;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    trust if (i) a U.S. court can exercise primary supervision over the trust&#8217;s administration and one or more U.S. persons are
    authorized to control all substantial decisions of the trust; or (ii) it has a valid election in effect under applicable U.S. Treasury
    regulations to be treated as a U.S. person.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a beneficial owner of our shares is not described as a U.S. Holder in one of the four bullet points above and is not an entity treated
as a partnership or other pass-through entity for U.S. federal income tax purposes, such owner will be considered a &#8220;Non-U.S. Holder&#8221;.
The U.S. federal income tax consequences applicable to Non-U.S. Holders is described below under the heading &#8220;Tax Consequences
to Non-U.S. Holders of Ordinary Shares&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
summary is based on the Internal Revenue Code of 1986, as amended (the &#8220;Code&#8221;), its legislative history, existing Treasury
regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These authorities are subject
to changes or differing interpretations, possibly on a retroactive basis.</span></p><div>

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

</div><!-- Field: Page; Sequence: 115; Value: 89 --><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"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
discussion does not address all aspects of U.S. federal income taxation that may be relevant to us or to any particular holder of our
shares based on such holder&#8217;s individual circumstances. In particular, this discussion considers only holders that own our shares
as capital assets within the meaning of Section 1221 of the Code. This discussion also does not address the potential application of
the alternative minimum tax or the U.S. federal income tax consequences to holders that are subject to special rules, including:</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">financial
    institutions or financial services entities;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">broker-dealers;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">taxpayers
    who have elected mark-to-market accounting;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">tax-exempt
    entities;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">insurance
    companies;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">regulated
    investment companies;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">real
    estate investment trusts;</span></td></tr>
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</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: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">certain
    expatriates or former long-term residents of the United States;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    that actually or constructively own 5% or more of our voting shares;</span></td></tr>
  </table><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;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    that acquired our shares pursuant to the exercise of employee stock options, in connection with employee stock incentive plans or
    otherwise as compensation;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    that hold our shares as part of a straddle, constructive sale, hedging, conversion or other integrated transaction; or</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; 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; text-align: justify"><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: top">
    <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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    whose functional currency is not the U.S. dollar.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
discussion does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, or state, local or non-U.S.
tax laws. Additionally, this discussion does not consider the tax treatment of partnerships or other pass-through entities or persons
who hold our securities through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income
tax purposes) is the beneficial owner of our shares, the U.S. federal income tax treatment of a partner in the partnership will generally
depend on the status of the partner and the activities of the partnership. This discussion also assumes that any distribution made (or
deemed made) in respect of our shares and any consideration received (or deemed received) by a holder in connection with the sale or
other disposition of such shares will be in U.S. dollars.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have not sought, and will not seek, a ruling from the Internal Revenue Service (or &#8220;IRS&#8221;), or an opinion of counsel as to
any U.S. federal income tax consequence described herein. The IRS may disagree with one or more aspects of the discussion herein, and
its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative
rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">BECAUSE
OF THE COMPLEXITY OF THE TAX LAWS AND BECAUSE THE TAX CONSEQUENCES TO ANY PARTICULAR HOLDER OF OUR SECURITIES MAY BE AFFECTED BY MATTERS
NOT DISCUSSED HEREIN, EACH HOLDER OF OUR SECURITIES IS URGED TO CONSULT WITH ITS TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES
OF THE OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND NON-U.S. TAX LAWS, AS
WELL AS U.S. FEDERAL TAX LAWS AND APPLICABLE TAX TREATIES.</span></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">&#160;</span></p><div>




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

</div><!-- Field: Page; Sequence: 116; Value: 89 --><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">&#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"><b>Tax
Consequences to U.S. Holders of Ordinary Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Taxation
of Distributions Paid on Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the passive foreign investment company (or &#8220;PFIC&#8221;), rules discussed below, a U.S. Holder generally will be required to
include in gross income as ordinary income the amount of any cash dividend paid on our Ordinary Shares. A cash distribution on such shares
will be treated as a dividend for U.S. federal income tax purposes to the extent the distribution is paid out of our current or accumulated
earnings and profits (as determined for U.S. federal income tax purposes). Any distributions in excess of such earnings and profits generally
will be applied against and reduce the U.S. Holder&#8217;s basis in its Ordinary Shares and, to the extent in excess of such basis, will
be treated as gain from the sale or exchange of such Ordinary Shares. With respect to corporate U.S. Holders, dividends on our shares
will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received
from other domestic corporations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends on our shares will be taxed at the lower long-term
capital gains rate applicable to qualified dividend income (see &#8220;&#8212; Taxation on the Disposition of Ordinary Shares&#8221;
below), provided that (1) our Ordinary Shares are readily tradable on an established securities market in the United States or, in the
event we are deemed to be a Chinese &#8220;resident enterprise&#8221; under the EIT Law, we are eligible for the benefits of the Agreement
between the Government of the United States of America and the Government of the People&#8217;s Republic of China for the Avoidance of
Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income, or the &#8220;U.S.-PRC Tax Treaty&#8221;; (2) we are
not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year; and (3) certain
holding period requirements are met. Under published IRS authority, shares are considered for purposes of clause (1) above to be readily
tradable on an established securities market in the United States only if they are listed on certain exchanges, which presently include
the Nasdaq Stock Market. U.S. Holders should consult their own tax advisors regarding the tax treatment of any dividends paid with respect
to our Ordinary Shares, including the effects of any change in law after the date of this Annual Report.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
PRC taxes apply to dividends paid to a U.S. Holder on our Ordinary Shares, such U.S. Holder may be entitled to a reduced rate of PRC
tax under the U.S-PRC Tax Treaty. In addition, such PRC taxes may be treated as foreign taxes eligible for credit against such holder&#8217;s
U.S. federal income tax liability (subject to certain limitations). U.S. Holders should consult their own tax advisors regarding the
creditability of any such PRC tax and their eligibility for the benefits of the U.S.-PRC Tax Treaty.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Taxation
on the Disposition of Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
a sale or other taxable disposition of our Ordinary Shares, and subject to the PFIC rules discussed below, a U.S. Holder will recognize
capital gain or loss in an amount equal to the difference between the amount realized in U.S. dollars and the U.S. Holder&#8217;s adjusted
tax basis in the Ordinary Shares. Capital gains recognized by U.S. Holders generally are subject to U.S. federal income tax at the same
rate as ordinary income, except that long-term capital gains recognized by non-corporate U.S. Holders are generally subject to U.S. federal
income tax at a maximum rate of 20%. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder&#8217;s holding
period for the Ordinary Shares exceeds one year. The deductibility of capital losses is subject to various limitations. If PRC taxes
would otherwise apply to any gain from the disposition of our Ordinary Shares by a U.S. Holder, such U.S. Holder may be entitled to a
reduction in or elimination of such taxes under the U.S.-PRC Tax Treaty. Any PRC taxes that are paid by a U.S. Holder with respect to
such gain may be treated as foreign taxes eligible for credit against such holder&#8217;s U.S. federal income tax liability (subject
to certain limitations that could reduce or eliminate the available tax credit). U.S. Holders should consult their own tax advisors regarding
the creditability of any such PRC tax and their eligibility for the benefits of the U.S.-PRC Tax Treaty.</span></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">&#160;</span></p><div>




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

</div><!-- Field: Page; Sequence: 117; Value: 89 --><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 -->112<!-- 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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Passive
Foreign Investment Company Rules</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
foreign (i.e., non-U.S.) corporation will be a PFIC if at least 75% of its gross income in a taxable year of the foreign corporation,
including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value,
is passive income. Alternatively, a foreign corporation will be a PFIC if at least 50% of its assets in a taxable year of the foreign
corporation, ordinarily determined based on fair market value and averaged quarterly over the year, including its pro rata share of the
assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce,
passive income. Passive income generally includes dividends, interest, rents and royalties (other than certain rents or royalties derived
from the active conduct of a trade or business) and gains from the disposition of passive assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on our current composition and assets, we do not expect to be treated as a PFIC under the current PFIC rules. We must make a separate
determination each year as to whether we are a PFIC. As such, our PFIC status, will not be determinable until after the end of each taxable
year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable
year. Depending on the amount of cash we raise in the IPO, together with any other assets held for the production of passive income,
it is possible that, for our 2019 taxable year or for any subsequent taxable year, more than 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. If we are determined
to be a PFIC and a U.S. Holder did not make either a timely qualified electing fund (or &#8220;QEF&#8221;), election for our first taxable
year as a PFIC in which the U.S. Holder held (or was deemed to hold) Ordinary Shares, or a mark-to-market election, as described below,
such holder generally will be subject to special rules with respect to:</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
    gain recognized by the U.S. Holder on the sale or other disposition of its Ordinary Shares; and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
    &#8220;excess distribution&#8221; made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year
    of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the
    Ordinary Shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder&#8217;s holding period
    for the Ordinary Shares).</span></td></tr>
  </table><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">&#160;</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    U.S. Holder&#8217;s gain or excess distribution will be allocated ratably over the U.S. Holder&#8217;s holding period for the Ordinary
    Shares;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    amount allocated to the U.S. Holder&#8217;s taxable year in which the U.S. Holder recognized the gain or received the excess distribution,
    or to the period in the U.S. Holder&#8217;s holding period before the first day of our first taxable year in which we are a PFIC,
    will be taxed as ordinary income;</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed
    at the highest tax rate in effect for that year and applicable to the U.S. Holder; and</span></td></tr>
  </table><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>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; 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; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such year
    of the U.S. Holder.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
general, a U.S. Holder may avoid the PFIC tax consequences described above in respect to our Ordinary Shares by making a timely QEF election
to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary
income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our
taxable year ends. There can be no assurance, however, that we will pay current dividends or make other distributions sufficient for
a U.S. Holder who makes a QEF election to satisfy the tax liability attributable to income inclusions under the QEF rules, and the U.S.
Holder may have to pay the resulting tax from its other assets. A U.S. Holder may make a separate election to defer the payment of taxes
on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder
generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment
Company or Qualified Electing Fund), to a timely filed U.S. federal income tax return for the tax year to which the election relates.
Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions
are met or with the consent of the IRS. In order to comply with the requirements of a QEF election, a U.S. Holder must receive certain
information from us. Upon request from a U.S. Holder, we will endeavor to provide to the U.S. Holder no later than 90 days after the
request such information as the IRS may require, including a PFIC annual information statement, in order to enable the U.S. Holder to
make and maintain a QEF election. However, there is no assurance that we will have timely knowledge of our status as a PFIC in the future
or of the required information to be provided.</span></p><div>

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

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. Holder has made a QEF election with respect to our Ordinary Shares, and the special tax and interest charge rules do not apply
to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to
hold) such shares), any gain recognized on the appreciation of our Ordinary Shares generally will be taxable as capital gain and no interest
charge will be imposed. As discussed above, U.S. Holders of a QEF are currently taxed on their pro rata shares of a PFIC&#8217;s earnings
and profits, whether or not distributed. In such case, a subsequent distribution of such earnings and profits that were previously included
in income generally should not be taxable as a dividend to those U.S. Holders who made a QEF election. The tax basis of a U.S. Holder&#8217;s
shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends,
under the above rules. Similar basis adjustments apply to property if by reason of holding such property the U.S. Holder is treated under
the applicable attribution rules as owning shares in a QEF.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
a determination as to our PFIC status will be made annually, an initial determination that our company is a PFIC will generally apply
for subsequent years to a U.S. Holder who held Ordinary Shares while we were a PFIC, whether or not we meet the test for PFIC status
in those years. A U.S. Holder who makes the QEF election discussed above for our first taxable year as a PFIC in which the U.S. Holder
holds (or is deemed to hold) our Ordinary Shares, however, will not be subject to the PFIC tax and interest charge rules discussed above
in respect to such shares. In addition, such U.S. Holder will not be subject to the QEF inclusion regime with respect to such shares
for any taxable year of ours that ends within or with a taxable year of the U.S. Holder and in which we are not a PFIC. On the other
hand, if the QEF election is not effective for each of our taxable years in which we are a PFIC and the U.S. Holder holds (or is deemed
to hold) our Ordinary Shares, the PFIC rules discussed above will continue to apply to such shares unless the holder makes a purging
election, and pays the tax and interest charge with respect to the gain inherent in such shares attributable to the pre-QEF election
period.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Alternatively,
if a U.S. Holder, at the close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder may make
a mark-to-market election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election
for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) shares in us and for which we are
determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect to its Ordinary Shares.
Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its Ordinary
Shares at the end of its taxable year over the adjusted basis in its Ordinary Shares. The U.S. Holder also will be allowed to take an
ordinary loss in respect of the excess, if any, of the adjusted basis of its Ordinary Shares over the fair market value of its Ordinary
Shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market
election). The U.S. Holder&#8217;s basis in its Ordinary Shares will be adjusted to reflect any such income or loss amounts, and any
further gain recognized on a sale or other taxable disposition of the Ordinary Shares will be treated as ordinary income.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
mark-to-market election is available only for stock that is regularly traded on a national securities exchange that is registered with
the SEC, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a
legitimate and sound fair market value. U.S. Holders should consult their own tax advisors regarding the availability and tax consequences
of a mark-to-market election in respect to our Ordinary Shares under their particular circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own
a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described
above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC. Upon request, we will endeavor
to cause any lower-tier PFIC to provide to a U.S. Holder no later than 90 days after the request the information that may be required
to make or maintain a QEF election with respect to the lower-tier PFIC. However, there is no assurance that we will have timely knowledge
of the status of any such lower-tier PFIC or will be able to cause the lower-tier PFIC to provide the required information. U.S. Holders
are urged to consult their own tax advisors regarding the tax issues raised by lower-tier PFICs. If a U.S. Holder owns (or is deemed
to own) shares during any year in a PFIC, such holder may have to file an IRS Form 8621 (whether or not a QEF election or mark-to-market
election is made). The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various
factors in addition to those described above. Accordingly, U.S. Holders of our Ordinary Shares should consult their own tax advisors
concerning the application of the PFIC rules to our Ordinary Shares under their particular circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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="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"><b>Tax
Consequences to Non-U.S. Holders of Ordinary Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
paid to a Non-U.S. Holder in respect to its Ordinary Shares generally will not be subject to U.S. federal income tax, unless the dividends
are effectively connected with the Non-U.S. Holder&#8217;s conduct of a trade or business within the United States (and, if required
by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United
States).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition
of our Ordinary Shares, unless such gain is effectively connected with its conduct of a trade or business in the United States (and,
if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains
in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable
year of sale or other disposition and certain other conditions are met (in which case, such gain from United States sources generally
is subject to tax at a 30% rate or a lower applicable tax treaty rate).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
and gains that are effectively connected with the Non-U.S. Holder&#8217;s conduct of a trade or business in the United States (and, if
required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally
will be subject to tax in the same manner as for a U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal
income tax purposes, may also be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.</span></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; font-size: 10pt">&#160;</span></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"><b>Backup
Withholding and Information Reporting</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
general, information reporting for U.S. federal income tax purposes should apply to distributions made on our Ordinary Shares within
the United States to a non-corporate U.S. Holder and to the proceeds from sales and other dispositions of our Ordinary Shares by a non-corporate
U.S. Holder to or through a U.S. office of a broker. Payments made (and sales and other dispositions effected at an office) outside the
United States will be subject to information reporting in limited circumstances. In addition, backup withholding of United States federal
income tax, currently at a rate of 24%, generally will apply to dividends paid on our Ordinary Shares to a non-corporate U.S. Holder
and the proceeds from sales and other dispositions of shares by a non-corporate U.S. Holder, in each case who (a) fails to provide an
accurate taxpayer identification number; (b) is notified by the IRS that backup withholding is required; or (c) in certain circumstances,
fails to comply with applicable certification requirements. A Non-U.S. Holder generally may eliminate the requirement for information
reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable
IRS Form W-8 or by otherwise establishing an exemption.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Backup
withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder&#8217;s
or a Non-U.S. Holder&#8217;s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required
information is timely furnished to the IRS. Holders are urged to consult their own tax advisors regarding the application of backup withholding
and the availability of and procedure for obtaining an exemption from backup withholding in their particular circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Individual
U.S. Holders may be required to report ownership of our Ordinary Shares and certain related information on their individual federal income
tax returns in certain circumstances. Generally, this reporting requirement will apply if (1) the Ordinary Shares are held in an account
of the individual U.S. Holder maintained with a &#8220;foreign financial institution&#8221;; or (2) the Ordinary Shares are not held
in an account maintained with a &#8220;financial institution,&#8221; as such terms are defined in the Code. The reporting obligation
will not apply to an individual, however, unless the total aggregate value of the individual&#8217;s foreign financial assets exceeds
US$50,000 during a taxable year. For avoidance of doubt, this reporting requirement should not apply to Ordinary Shares held in an account
with a U.S. brokerage firm. Failure to comply with this reporting requirement, if it applies, will result in substantial penalties. In
certain circumstances, additional tax and other reporting requirements may apply, and U.S. Holders of our Ordinary Shares are advised
to consult with their own tax advisors concerning all such reporting requirements.</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"></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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.
<span style="text-decoration:underline">Dividends and Paying Agents</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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">&#160;</span></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">G.
<span style="text-decoration:underline">Statement by Experts</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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">&#160;</span></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">H.
<span style="text-decoration:underline">Documents on Display</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have previously filed the Registration Statement with the SEC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Documents
concerning us that are referred to in this document may be inspected at c/o Advanced Business Park, 9th Fl, Bldg C2, 29 Lanwan Lane,
Hightech District, Zhuhai, Guangdong 519080, China. In addition, we file annual reports and other information with the Securities and
Exchange Commission. We file annual reports on Form 20-F and submit other information under cover of Form 6-K. As a foreign private issuer,
we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers, directors and principal shareholders are
exempt from the insider short-swing disclosure and profit recovery rules of Section 16 of the Exchange Act. Annual reports and other
information we file with the Commission may be inspected at the public reference facilities maintained by the Commission at Room 1024,
100 F. Street, N.E., Washington, D.C. 20549, and copies of all or any part thereof may be obtained from such offices upon payment of
the prescribed fees. You may call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms
and you can request copies of the documents upon payment of a duplicating fee, by writing to the Commission. In addition, the Commission
maintains a web site that contains reports and other information regarding registrants (including us) that file electronically with the
Commission which can be assessed at http://www.sec.gov.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">I.
<span style="text-decoration:underline">Subsidiary Information</span></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
a listing of our subsidiaries, see &#8220;Item 4. Information on the Company &#8212; A. History and Development of the Company&#8221;.</span></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">&#160;</span></p><div>

</div><div><a id="a_014"></a></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"><b>Item
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Interest
Rate Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
exposure to interest rate risk primarily relates to interest income generated by excess cash, which is mostly held in interest-bearing
bank deposits. While interest-earning instruments carry a degree of interest rate risk, we have not been exposed, nor do we anticipate
being exposed, to material risks due to changes in market interest rates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><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 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Foreign
Currency Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
majority of the Company&#8217;s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries&#8217;
assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange
transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People&#8217;s
Bank of China (&#8220;PBOC&#8221;). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC
or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
functional currency is the RMB, and our financial statements are presented in U.S. dollars. The RMB appreciated by 6.3% in fiscal year
2020, further appreciated by 2.3% in fiscal year 2021 and depreciated by 8.2% in fiscal year 2022. It is difficult to predict how market
forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in
the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect
to any underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated
in RMB.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes,
appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion.
Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisitions
or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount
available to the Company.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-indent: 40.15pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Inflation
</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40pt"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
our inception, inflation in China has not materially affected our results of operations. According to the National Bureau of Statistics
of China, the year-over-year percent changes in the consumer price index for December 2020, 2021 and 2022 increased 2.6%, 1.5% and 2.0%,
respectively. Although we have not been materially affected by inflation in the past, we may be affected if China experiences higher
rates of inflation in the future.</span></p><div>

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

</div><div><a id="a_015"></a></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>Item
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
the exception of Items 12.D.3 and 12.D.4, this Item 12 is not applicable for annual reports on Form 20-F. As to Items 12.D.3 and 12.D.4,
this Item 12 is not applicable, as the Company does not have any American Depositary Shares.</span></p><div>

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

</div><div><a id="a_016"></a></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: 10pt"><b>Part
II</b></span></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; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_017"></a></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>Item
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</span></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">&#160;</span></p><div>

</div><div><a id="a_018"></a></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>Item
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 10. Additional Information&#8221; for a description of the rights of securities holders, which remain unchanged.</span></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>&#160;</b></span></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>Use
of Proceeds</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following &#8220;Use of Proceeds&#8221; information relates to the Registration Statement, in relation to our initial public offering
of 2,012,500 Ordinary Shares (including the full exercise of the over-allotment option by the underwriters to purchase an additional
262,500 Ordinary Shares on May 10, 2019). The Ordinary Shares were sold at an offering price of $5.00 per share, generating gross proceeds
of approximately $10.06 million, and net proceeds of approximately $8.0 million. The registration statement relating to the IPO also
covered the underwriters&#8217; common stock purchase warrants and the Ordinary Shares issuable upon the exercise thereof in the total
amount of 122,500 Ordinary Shares.</span></p><div>

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

</div><div><a id="a_019"></a></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"><b>Item
15. CONTROLS AND PROCEDURES</b>&#160;</span></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">&#160;</span></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"><b>(a)
Disclosure Controls and Procedures</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the supervision and with the participation of our management, including our chief executive officer and our chief financial officer,
we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the
Exchange Act, as of December 31, 2022. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures
as of December 31, 2022 were not effective at the reasonable assurance level due to the material weakness described below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the audit of our financial statements for the years ended December 31, 2022, 2021 and 2020, we and our independent registered
public accounting firms identified material weakness in our internal control over financial reporting,&#160;as defined in the standards
established by the Public Company Accounting Oversight Board of the United States. The material weakness identified consisted of (i)
a lack of accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements; (ii)
a lack of sufficient documented financial closing policies and procedures, specifically those related to period-end expenses cut-off
and accruals; (iii) inadequate controls with respect to the maintenance of sufficient documentation for, and the evaluation of the accounting
implications of, significant and non-routine payment transactions; and (iv) a lack of sufficient documented financial closing policies
and procedures, specifically those related to period-end expenses cut-off and accruals; as defined in the standards established by the
Public Company Accounting Oversight Board of the United States.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have already taken some steps and have continued to implement measures to remediate the material weakness identified, including but not
limited to providing trainings to staff, changing to a new and well-established accounting system, and continue to monitor the internal
control over financial reporting. However, we cannot assure you that we will not identify additional material weaknesses or significant
deficiencies in the future. See &#8220;Item 3. Key Information&#8212;D. Risk Factors&#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&#8221;.&#160;</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notwithstanding
there are material weaknesses identified as described above, we believe that our consolidated financial statements contained in this
Annual Report on Form 20-F fairly present our financial position, results of operations and cash flows for the years covered thereby
in all material respects.</span></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">&#160;</span></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"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(b)
Management&#8217;s Annual Report on Internal Control over Financial Reporting Attestation Report of the Registered Public Accounting
Firm</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management made an annual assessment regarding our internal control over financial reporting. The material weaknesses identified by us
and our independent registered public accounting firm related to (i) a lack of accounting staff and resources with appropriate knowledge
of U.S. GAAP and SEC reporting and compliance requirements; (ii) a lack of sufficient documented financial closing policies and procedures,
specifically those related to period-end expenses cut-off and accruals; (iii) inadequate controls with respect to the maintenance of
sufficient documentation for, and the evaluation of the accounting implications of, significant and non-routine payment transactions;
and (iv) a lack of sufficient documented financial closing policies and procedures, specifically those related to period-end expenses
cut-off and accruals. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal
control under the Sarbanes-Oxley Act for purposes of identifying and reporting any weakness in our internal control over financial reporting.
Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting
firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Remediation
of Material Weaknesses</i></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
remediate our identified material weaknesses, we intend to adopt several measures to improve our internal control over financial reporting,
including (i) hiring more qualified accounting personnel, including a financial controller, with relevant U.S. GAAP and SEC reporting
experience and qualifications to strengthen the financial reporting function and setting up a financial and system control framework;
(ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial
reporting personnel; (iii) setting up an internal audit function as well as engaging an external consulting firm to assist us with assessment
of Sarbanes-Oxley compliance requirements and improvement of overall internal controls; (iv) preparing comprehensive accounting policies,
manuals and closing procedures to improve the quality and accuracy of our period-end financial closing process; (v) setting up and maintaining
a control process for the accounting implication assessment of all significant payment transactions, particularly those that are non-routine;
(vi) setting up and maintaining a control process for maintaining all supporting documentation regarding non-routine transactions; (vii)
updating the approval requirements for non-routine transactions to ensure that they match our transaction approval policies in place
on our other accounts; and (viii) partnering with third party service providers and a custodian bank to assist with borrower bank account
management.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that the actions we are taking, as listed above, will help remedy the material weaknesses referred to above, and help strengthen
our general internal controls and procedures over financial reporting. However, the process of designing and implementing an effective
financial reporting system represents a continuous effort that requires us to anticipate and react to changes in our business and the
economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to
satisfy our reporting obligations. While we have developed a remediation plan to address these material weaknesses, this remediation
plan or any additional plan we plan to implement may be insufficient to address our material weaknesses and additional material weaknesses
may be discovered in the future. We plan to continue to address and remediate additional control deficiencies we may identify during
our evaluation process in 2022. If we fail to implement and maintain an effective system of internal controls or fail to remediate the
material weaknesses in our internal control over financial reporting that have been identified, we may be unable to accurately report
our results of operations or prevent fraud or fail to meet our reporting obligations, and investor confidence and the market price of
our ordinary shares may be materially and adversely affected.</span></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">&#160;</span></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"><b>(c)
Attestation Report on Internal Control over Financial Reporting of the Registered Public Accounting Firm</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Annual Report on Form 20-F does not include an attestation report on Internal Control over Financial Reporting of our independent registered
public accounting firm because we qualified as an &#8220;emerging growth company&#8221; as defined under the JOBS Act as of December
31, 2022.</span></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">&#160;</span></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"><b>(d)
Changes in Internal Control over Financial Reporting</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
than those disclosed 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.</span></p><div>

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

</div><!-- Field: Page; Sequence: 123; Value: 89 --><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 -->118<!-- 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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_020"></a></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"><b>I<span style="font-variant: small-caps">tem
16. RESERVED</span></b></span></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">&#160;</span></p><div>

</div><div><a id="a_021"></a></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"><b>Item
16A. AUDIT COMMITTEE FINANCIAL EXPERT</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board has determined that Wei Jiang is an audit committee financial expert as that term is defined in Item 16A(b) of Form 20-F, and &#8220;independent&#8221;
as that term is defined in the NASDAQ listing standards.</span></p><div>

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

</div><div><a id="a_022"></a></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"><b>Item
16B. CODE OF ETHICS</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board has adopted a code of business conduct and ethics that applies to our directors, officers and employees. A copy of this code is
available on our website: www.powerbridge.com.</span></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">&#160;</span></p><div>

</div><div><a id="a_023"></a></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>Item
16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table represents the approximate aggregate fees for services rendered by Onestop Assurance PAC and B F Borgers CPA PC for the
periods indicated:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#160;31,<br/> 2021</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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#160;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>Audit Fees</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="width: 64%; text-align: left">- Onestop Assurance PAC</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">213,100</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">171,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">220,000</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">- B F Borgers CPA PC</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">150,000</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">All Other Fees </td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left">Total Fees</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">213,100</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">171,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">370,000</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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Audit-related
fees&#8221; are the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit
and are not reported under audit fees. These fees primarily include accounting consultations regarding the accounting treatment of matters
that occur in the regular course of business, implications of new accounting pronouncements and other accounting issues that occur from
time to time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Tax
fees&#8221; include fees for professional services rendered by our independent registered public accounting firm for tax compliance and
tax advice on actual or contemplated transactions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Other
fees&#8221; include fees for services rendered by our independent registered public accounting firm with respect to government incentives
and other matters.</span></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">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
policy of our audit committee is to pre-approve all audit and non-audit services provided by our independent auditor including audit
services, audit-related services, tax services and other services.</span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Audit Committee evaluated and approved in advance the scope and cost of the engagement of an auditor before the auditor rendered its
audit and non-audit services.&#160;</span></p><div>

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

</div><!-- Field: Page; Sequence: 124; Value: 89 --><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 -->119<!-- 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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_024"></a></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>Item
16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
described under Item 16G, we have relied on and intend to continue relying on home country practice, our Audit Committee consists of
two members (both of whom are independent directors) instead of three members as required under NASDAQ listing rules. Other than above,
we have not asked for, nor have we been granted, an exemption from the applicable listing standards for our Audit Committee.</span></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">&#160;</span></p><div>

</div><div><a id="a_025"></a></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>Item
16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></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">&#160;</span></p><div>

</div><div><a id="a_026"></a></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>Item
16F. CHANGE IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

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

</div><div><a id="a_027"></a></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"><b>Item
16G. CORPORATE GOVERNANCE</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq listing standards. However, the Nasdaq
Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. We have
utilized the exemption afforded by Nasdaq Listing Rule 5615(a)(3) to follow home country practice in lieu of certain requirements, including
(i) the independence requirements for compensation committee and nomination committee as provided in Nasdaq Listing Rule 5605(d) and
(e); (ii) the requirement that a majority of the Board must be independent as provided in Nasdaq Listing Rule 5615(b)(1); (iii) the requirement
to hold annual general meeting as provided in Nasdaq Listing Rule 5620(a); and (iv) the requirement to obtain shareholders&#8217; approval
prior to a plan or other equity compensation arrangement is established or materially amended as provided in Nasdaq Listing Rule 5635(c).
Our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq listing standards applicable to U.S.
domestic issuers given our reliance on the home country practice exception.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 3. Key Information-D. Risk Factors-Risks Related to Our Corporate Structure - As an exempted company incorporated in the
Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly
from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully
with such corporate governance listing standards&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><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 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 6. Directors, Senior Management and Employees&#8221; for more information.</span></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>&#160;</b></span></p><div>

</div><div><a id="a_028"></a></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>Item
16H. MINE SAFETY DISCLOSURE</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

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

</div><div><a id="a_029"></a></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>Item
16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS </b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

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

</div><!-- Field: Page; Sequence: 125; Value: 89 --><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 -->120<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Part
III </b></span></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; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_031"></a></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>Item
17. FINANCIAL STATEMENTS</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have elected to provide financial statements pursuant to Item 18.</span></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">&#160;</span></p><div>

</div><div><a id="a_032"></a></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>Item
18. FINANCIAL STATEMENTS</b></span></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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements of Powerbridge Technologies Co., Ltd., and its subsidiaries are included at the end of this Annual
Report.</span></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">&#160;</span></p><div>

</div><div><a id="a_033"></a></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>Item
19. EXHIBITS </b></span></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; font-size: 10pt">&#160;</span></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; font-size: 10pt"><b>EXHIBIT
INDEX</b></span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 9%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit</b></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: 90%; border-bottom: black 1.5pt solid; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit
    title</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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; text-align: justify"><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: top; 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">3.1</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390020035616/ea129487ex10-1_powerbridge.htm">Fourth Amended and Restated Memorandum and Articles of Association<sup>(5)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">4.1</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: justify"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"><a href="http://www.sec.gov/Archives/edgar/data/1754323/000121390023006736/ea172450ex4-1_powerbridge.htm">Specimen Ordinary Share Certificate<sup>(16)</sup></a></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">4.2</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019003992/ff12019a2ex4-2_powerbridge.htm">Form of Underwriter Warrant<sup>(4)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">5.1</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: justify"><a href="f20f2022ex5-1_powerbridge.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Opinion of Conyers Dill &amp; Pearman LLP</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">10.1</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019002794/ff12019a1ex10-1_powerbridge.htm">2018 Stock Option Plan<sup>(14)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">10.2</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390020016596/ea123794ex99-1_power.htm">2018 Amended Stock Option Plan<sup>(15)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">10.3</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex10-2_power.htm">Form of Employment Agreement<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">10.4</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex10-3_power.htm">Unofficial English Translation of Technical Development (Commission) Contract between Zhuhai Powerbridge Technology Co., Ltd and Wuhan New Port Management Committee dated as of July 21, 2017<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">10.5</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex10-4_power.htm">Unofficial English Translation of Contract for the Public Tender Procurement Project for the Information Platform of Comprehensive Bonded Logistics Industry Construction Management Office of Wuhan Airport Economic Development Zone between Zhuhai Powerbridge Technology Co., Ltd and Comprehensive Bonded Logistics Industry Construction Management Office of Wuhan Airport Economic Development Zone dated as of December 13, 2016<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">10.6</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex10-5_power.htm">Unofficial English Translation of Government Procurement Contract between Zhuhai Powerbridge Technology Co., Ltd and Chenzhou High-tech Investment Holding Co., Ltd dated as of September 22, 2017<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">10.7</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex10-6_power.htm">Unofficial English Translation of Wuhan New Port Airport Comprehensive Bonded Zone (Yangluogang Park) Information Software and Integration Contract between Zhuhai Powerbridge Technology Co., Ltd and Wuhan New Port Yangluo Bonded Park Development Management Co., Ltd dated as of November 23, 2016<sup>(2)</sup></a></span></td></tr>
  </table><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">&#160;</span></p><div>

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

</div><!-- Field: Page; Sequence: 126; Value: 89 --><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 -->121<!-- 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 9%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.8</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: 90%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex10-7_power.htm">Unofficial English Translation of Technical Development (Commission) Contract between Zhuhai Powerbridge Technology Co., Ltd and Guangxi Nanning Dangdai Fengyun Investment Management Co., Ltd dated as of July 27, 2016<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">10.9</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex10-8_power.htm">Unofficial English Translation of Government Procurement Contract among Department of Commerce of Guangxi Zhuang Autonomous Region, Zhuhai Powerbridge Technology Co., Ltd, and Beijing Xinchengtong Digital Technology Co., Ltd dated as of November 15, 2016<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; background-color: rgb(204,238,255)">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
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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: 10pt Times New Roman, Times, Serif; text-align: justify"><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">&#160;</span></td></tr>
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    <td>&#160;</td>
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<tr style="vertical-align: top; ">
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    <td>&#160;</td>
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<tr style="vertical-align: top; ">
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
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  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.34</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1754323/000121390022053794/ea165327ex10-2_powerbridge.htm">Convertible Promissory Note issued by Powerbridge Technologies&#160;Co., Ltd to Streeterville&#160;Capital, LLC on September 1, 2022<sup>(17)</sup></a></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; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1754323/000121390022055106/ea165420ex99-1_powerbridge.htm">Ordinary
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  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</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-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1754323/000121390022055662/ea165699ex99-1_powerbridge.htm">Standby
    Equity Purchase Agreement, dated September 9, 2022, by and between Powerbridge Technologies Co., Ltd. and YA II PN, Ltd.<sup>(20)</sup></a></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; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.37</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390021011128/ea136315ex10-2_powerbridge.htm">Securities Purchase Agreement by and between Powerbridge Technologies Co., Ltd. and Uptown Capital, LLC dated as of January 8, 2021<sup>(12)</sup></a>&#160;</span></td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.38</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390021011128/ea136315ex10-3_powerbridge.htm">Convertible Promissory Note dated January 8, 2021<sup>(12)</sup></a></span></td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.39</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390021021067/ea139238ex10-1_powerbridge.htm">Securities Purchase Agreement dated April 9, 2021 by and between the Company and the Investor<sup>(13)</sup></a></span></td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.40</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390021021067/ea139238ex10-2_powerbridge.htm">Form of Convertible Note<sup>(13)</sup></a></span></td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.41</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390021021067/ea139238ex10-3_powerbridge.htm">Form of Warrant<sup>(13)</sup></a></span></td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>

<tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.1*</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex12-1_powerbridge.htm">Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.</a></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; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.2*</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex12-2_powerbridge.htm">Certification of the Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.</a></span></td></tr>

<tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; 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">13.1*</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex13-1_powerbridge.htm">Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">13.2*</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex13-2_powerbridge.htm">Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">14.1</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex14-1_power.htm">Code of Conduct and Ethics<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">15.1*</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: justify"><a href="f20f2022ex15-1_powerbridge.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent of Audit Onestop Assurance PAC</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">21.1*</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex21-1_powerbridge.htm">List of Subsidiaries of the Registrant</a></span></td></tr>
</table><div>

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

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 9%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">24.1*</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; text-align: justify; width: 90%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019004616/ff12019a3_powerbridgetech.htm">Power of Attorney (included on signature page)<sup>(1)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; 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">99.1</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: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex99-1_power.htm">Charter of the Audit Committee<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; background-color: rgb(204,238,255)">
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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: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex99-2_power.htm">Charter of the Compensation Committee<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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: top; background-color: rgb(204,238,255)">
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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"><a href="https://www.sec.gov/Archives/edgar/data/1754323/000121390019000165/ff12019ex99-3_power.htm">Charter of the Nominating and Corporate Governance Committee<sup>(2)</sup></a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <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; text-align: justify"><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; background-color: rgb(204,238,255)">
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</div><p style="margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Registration Statement on Form F-1 (File No. 333-229128)
    filed with the Securities and Exchange Commission on February 19, 2019. </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Registration Statement on Form F-1 (File No. 333-229128)
    filed with the Securities and Exchange Commission on March 12, 2019.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on November 6, 2020.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 20-F filed with the Securities and Exchange
    Commission on June 24, 2020.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on August 28, 2020.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(8)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on September 8, 2020.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(9)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on October 6, 2020.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(10)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on November 25, 2020.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(11)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to Exhibit 1.01 of the Company&#8217;s Registration Statement on Form F-3 filed with the SEC on
    February 23, 2021.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(12)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on February 23, 2021.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(13)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on April 9, 2021.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(14)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed, incorporated herein by reference to Exhibit 10.1 to the Company&#8217;s Registration Statement on Form F-1 (File No. 333-229128)
    filed with the Commission on March 21, 2019.</span></td></tr>
  </table><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: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(15)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Previously
    filed, incorporated herein by reference to Exhibit 99.1 to the Company&#8217;s Current Report on Form 6-K filed with the Commission
    on July 2, 2020.</span></td></tr>
  </table><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: 6pt">&#160;</span></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; text-align: justify">
<td style="width: 5%; text-align: left">(16)</td><td style="text-align: justify; width: 95%">Previously filed, incorporated herein by reference to Exhibit
4.1 to the Company&#8217;s Registration Statement on Form S-8 (File No.333-269513) filed with the Commission on February 1, 2023.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20pt; text-indent: -20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></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; text-align: justify">
<td style="width: 5%; text-align: left">(17)</td><td style="text-align: justify; width: 95%">Previously filed, incorporated by reference to Exhibit 10.2
to the Company&#8217;s Current Report on Form 6-K filed with the Commission on September 2, 2022.</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left"><span style="font-size: 6pt">&#160;</span></td><td style="text-align: justify"><span style="font-size: 6pt">&#160;</span></td></tr>
     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">(18)</td><td style="text-align: justify">Previously filed, incorporated by reference to Exhibit 10.1 to the Company&#8217;s Current Report on Form 6-K filed with the Commission on September
2, 2022.</td></tr>
     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: left"><span style="font-size: 6pt">&#160;</span></td><td style="text-align: justify"><span style="font-size: 6pt">&#160;</span></td></tr>
     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">(19)</td><td style="text-align: justify">Previously filed, incorporated by reference to Exhibit 99.1 to the Company&#8217;s Current Report on Form 6-K filed with the Commission on September
9, 2022.</td></tr>
     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: left"><span style="font-size: 6pt">&#160;</span></td><td style="text-align: justify"><span style="font-size: 6pt">&#160;</span></td></tr>
     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">(20)</td><td style="text-align: justify">Previously filed, incorporated by reference to Exhibit 99.1 to the Company&#8217;s Current Report on Form 6-K filed with the Commission on September
13, 2022.</td></tr>
     </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Filed
    herewith</span></td></tr>
  </table><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p><div>

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

</div><!-- Field: Page; Sequence: 129; Value: 89 --><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 -->124<!-- 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"><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 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SIGNATURES</b></span></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; font-size: 10pt">&#160;</span></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
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.</span></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">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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"><b>Powerbridge
    Technologies Co., Ltd.</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 60%"><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: 5%"><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: 35%"><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: top">
    <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">By:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>/s/
    Stewart Lor</i></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">Name:&#160;&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Stewart
    Lor</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">Title:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Chief
    Executive Officer</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <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">Dated:&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif">April <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">28,
    2023</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>

</div><!-- Field: Page; Sequence: 130; Value: 89 --><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 -->125<!-- 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"><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 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.</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>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; 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: 90%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Consolidated Financial Statements</b></span></td>
    <td style="width: 10%; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><a href="#f_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reports of Independent Registered Public Accounting Firms</span></a></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-2</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify"><a href="#f_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Balance Sheets at December 31, 2022 and 2021</span></a></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-3</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#f_003">Consolidated Statements of Operations and Comprehensive (loss) Income for the Years Ended December 31, 2022, 2021 and 2020</a></span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-4</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify"><a href="#f_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Changes in Equity for the Years Ended December 31, 2022, 2021 and 2020 </span></a></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-5</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><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>
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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">&#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"></p><div>

</div><!-- Field: Page; Sequence: 131; 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">&#160;</p><div>

</div><div><a id="f_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><span style="text-decoration:underline">REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</span></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">To the Board of Directors and Shareholders of <b>POWERBRIDGE TECHNOLOGIES
CO., LTD.</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>Opinion on the 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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheets of Powerbridge Technologies Co., Ltd. (collectively the &#8220;Company&#8221;) as of December 31, 2022 and 2021, the related
consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for the years ended December 31, 2022,
2021 and 2020, and the related notes to the consolidated financial statements and schedule (collectively the financial statements). In
our opinion, the financial statements present fairly, in all material respects, the financial positions of the Company as of December
31, 2022 and 2021, and the results of its operations and its cash flows for the years ended December 31, 2022, 2021 and 2020, in conformity
with accounting principles generally accepted in the United States of America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Going Concern Matter</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 preparation of the attached financial statements
assumes that the Company will continue to operate. As stated in Note 2 to the financial statements, for the year ended December 31, 2022,
the Company had working capital of approximately $59.5 million and incurred a net loss of approximately $21.5 million. For the year ended
December 31, 2022, the Company had negative operation cash flow of approximately $9.7 million. The Company has historically funded its
working capital needs primarily from public offering, operations, bank loans, advance payments from customers and shareholders. The management&#8217;s
plan for these matters can be found in Note 2 to the financial statements. Nevertheless, the aforementioned conditions and events raise
substantial doubt about the Company&#8217;s ability to continue as a going concern. The financial statements do not include any adjustments
that may arise due to the outcome of such 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>Basis for Opinion</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">These financial statements are the responsibility
of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s financial statements based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the 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><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 audits included performing procedures to assess
the risks of material misstatement of the 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ <ix:nonNumeric contextRef="c0" name="dei:AuditorName">OneStop Assurance PAC</ix:nonNumeric></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">We have served as the Company&#8217;s auditor since 2021</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"><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">Singapore</ix:nonNumeric></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">April 28, 2023</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">PCAOB Id#: <ix:nonNumeric contextRef="c0" name="dei:AuditorFirmId">6732</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"></p><div>

</div><!-- Field: Page; Sequence: 132; 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 -->2<!-- 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><div><a id="f_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.</b></p><div>

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

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

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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; 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">&#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-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></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"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableCurrent" scale="0" unitRef="usd">12,815,532</ix:nonFraction></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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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="pbts:CustomerDeposits" scale="0" unitRef="usd">483,735</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 style="text-align: left; padding-left: 9pt">Deferred revenue</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">-</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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NotesPayableRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">470,765</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-left: 9pt">Accrued expenses and other current liabilities</td><td>&#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:EmployeeRelatedLiabilitiesCurrent" scale="0" unitRef="usd">1,733,181</ix:nonFraction></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"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NotesPayableRelatedPartiesClassifiedCurrent" scale="0" unitRef="usd">118,114</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 style="text-align: left; padding-left: 9pt">Taxes payable</td><td>&#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:TaxesPayableCurrent" scale="0" unitRef="usd">110,843</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Lease liabilities</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="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Total Current Liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <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"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityNoncurrent" scale="0" unitRef="usd">101,992</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="text-align: left; padding-bottom: 1.5pt; text-indent: 7.1pt">Total Liabilities</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:Liabilities" scale="0" unitRef="usd">28,037,968</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="text-indent: 7.1pt">&#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">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-10">&#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-11">&#160;</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <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></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>EQUITY:</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-indent: -0.125in; padding-left: 0.25in; text-align: left">Ordinary shares,&#160;<ix:nonFraction contextRef="c2" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares"><ix:nonFraction contextRef="c3" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction></ix:nonFraction>&#160;par value;&#160;<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">300,000,000</ix:nonFraction></ix:nonFraction>&#160;shares authorized;&#160;<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares">285,005,647</ix:nonFraction></ix:nonFraction> and&#160;<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares">56,794,773</ix:nonFraction></ix:nonFraction>&#160;shares issued and outstanding as of December 31, 2022 and 2021</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockValue" scale="0" unitRef="usd">94,660</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; text-indent: -9pt; padding-left: 0.25in">Additional Paid-in Capital</td><td>&#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:AdditionalPaidInCapitalCommonStock" scale="0" unitRef="usd">164,753,604</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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdditionalPaidInCapitalCommonStock" scale="0" unitRef="usd">117,937,928</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt">Accumulated deficit</td><td>&#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:RetainedEarningsAccumulatedDeficit" scale="0" sign="-" unitRef="usd">59,081,432</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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RetainedEarningsAccumulatedDeficit" scale="0" sign="-" unitRef="usd">37,575,834</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; padding-bottom: 1.5pt; padding-left: 9pt">Accumulated other comprehensive (loss) income</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:AccumulatedOtherComprehensiveIncomeLossNetOfTax" scale="0" sign="-" unitRef="usd">3,333,541</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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax" scale="0" unitRef="usd">2,698,884</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-left: 9pt">Total Powerbridge Technologies Co., Ltd.&#8217;s Shareholders&#8217; Equity</td><td>&#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:StockholdersEquity" scale="0" unitRef="usd">102,813,649</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 style="text-align: left; padding-bottom: 1.5pt; text-indent: -2.5pt; padding-left: 0.125in">Non-controlling interest</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:MinorityInterest" scale="0" sign="-" unitRef="usd">263,507</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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterest" scale="0" sign="-" unitRef="usd">257,296</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 0.25in">Total Equity</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"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest" scale="0" unitRef="usd">82,898,342</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)">
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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">The accompanying notes are an integral part of
these consolidated financial statements.</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><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 -->3<!-- 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><div><a id="f_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
(LOSS) INCOME</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="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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  <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)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Total other expense</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">LOSS 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:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" scale="0" sign="-" unitRef="usd">22,548,091</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>&#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">INCOME TAX BENEFIT</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; ">
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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:ProfitLoss" scale="0" sign="-" unitRef="usd">18,359,602</ix:nonFraction></td><td style="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; ">
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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="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAttributableToNoncontrollingInterest" scale="0" sign="-" unitRef="usd">43,102</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; background-color: rgb(204,238,255)">
    <td style="text-align: left">NET LOSS ATTRIBUTABLE TO POWERBRIDGE</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="pbts:NETLOSSINCOMEATTRIBUTABLETOPOWERBRIDGE" scale="0" sign="-" unitRef="usd">21,505,598</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="pbts:NETLOSSINCOMEATTRIBUTABLETOPOWERBRIDGE" scale="0" sign="-" unitRef="usd">18,253,657</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <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>
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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; ">
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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>
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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">&#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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  </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">The accompanying notes are an integral part of
these consolidated financial statements.</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><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 -->4<!-- 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><div><a id="f_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY</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="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <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; 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)">
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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-45">-</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)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Conversion of convertible loans</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">Issuance of shares for services</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-50">-</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)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Options granted</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-54">-</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; ">
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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; text-indent: -9pt; padding-left: 9pt">Issuance shares at the market offering</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-75">-</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-76">-</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-77">-</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="c0" decimals="0" format="ixt:num-dot-decimal" name="pbts:IssuanceSharesAtTheMarketOffering" scale="0" unitRef="usd">56,449</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; text-indent: -9pt; padding-left: 9pt">Conversion of convertible loans</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-78">-</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-79">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">Issuance of shares for services</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-81">-</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-82">-</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)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Options granted</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-84">&#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"><ix:nonFraction contextRef="c34" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueStockOptionsExercisedNetOfTaxBenefitExpense" scale="0" unitRef="usd">3,336,452</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-85">-</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-86">-</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-87">-</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; ">
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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: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</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"></p><div>




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

</div><!-- Field: Page; Sequence: 135; 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 -->5<!-- 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><div><a id="f_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>POWERBRIDGE
TECHNOLOGIES CO., LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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; text-align: center"><span style="font-size: 6pt"><b>&#160;</b></span></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>&#160;</td><td style="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>
    <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <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><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td>CASH FLOWS FROM OPERATING ACTIVITIES:</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Adjustments to reconcile net income from operations to net cash provided by (used in) operating activities:</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)">
    <td style="text-align: left; padding-left: 0.25in">Depreciation and amortization</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:DepreciationDepletionAndAmortization" scale="0" unitRef="usd">2,163,197</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Provision for doubtful accounts</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:ProvisionForDoubtfulAccounts" scale="0" unitRef="usd">4,733,183</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:ProvisionForDoubtfulAccounts" scale="0" unitRef="usd">1,100,606</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:ProvisionForDoubtfulAccounts" scale="0" unitRef="usd">191,148</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: 0.25in">Share based compensation</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:ShareBasedCompensation" scale="0" unitRef="usd">5,983,907</ix:nonFraction></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"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensation" scale="0" unitRef="usd">1,473,976</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Loss from disposal of property 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:GainLossOnDispositionOfAssets1" scale="0" sign="-" unitRef="usd">104,091</ix:nonFraction></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"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GainLossOnDispositionOfAssets1" scale="0" sign="-" unitRef="usd">1,548</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-left: 0.25in">Deferred tax benefit</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:DeferredIncomeTaxExpenseBenefit" scale="0" sign="-" unitRef="usd">435,741</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:DeferredIncomeTaxExpenseBenefit" scale="0" sign="-" unitRef="usd">174,076</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:DeferredIncomeTaxExpenseBenefit" scale="0" sign="-" unitRef="usd">80,641</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Change in fair value of convertible debt</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="pbts:ChangeInFairValueOfConvertibleDebt" scale="0" unitRef="usd">2,448,936</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="pbts:ChangeInFairValueOfConvertibleDebt" scale="0" unitRef="usd">1,508,229</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="pbts:ChangeInFairValueOfConvertibleDebt" scale="0" unitRef="usd">15,258,333</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-left: 0.25in">Accrued interest of convertible debt</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="pbts:AccruedInterestOfConvertibleDebt" scale="0" unitRef="usd">195,139</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="pbts:AccruedInterestOfConvertibleDebt" scale="0" unitRef="usd">226,775</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-108">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Loss (gain) from disposition of a subsidiary</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:GainLossOnInvestments" scale="0" sign="-" unitRef="usd">1,009</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:GainLossOnInvestments" scale="0" unitRef="usd">714</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-109">-</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; padding-left: 0.25in">Right of use assets amortization</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="pbts:RightOfUseAssetsAmortization" scale="0" unitRef="usd">45,381</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-110">-</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-111">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt">Changes in 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)">
    <td style="text-align: left; padding-left: 0.25in">Notes receivable</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:IncreaseDecreaseInNotesReceivableCurrent" scale="0" unitRef="usd">13,375</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-112">-</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="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInNotesReceivableCurrent" scale="0" sign="-" unitRef="usd">217,259</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Accounts receivable</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:IncreaseDecreaseInAccountsReceivable" scale="0" sign="-" unitRef="usd">2,980,772</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:IncreaseDecreaseInAccountsReceivable" scale="0" unitRef="usd">10,459,509</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:IncreaseDecreaseInAccountsReceivable" scale="0" unitRef="usd">2,004,618</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; padding-left: 0.25in">Contract costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-113">-</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="pbts:ContractCost" scale="0" unitRef="usd">4,088,073</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="pbts:ContractCost" scale="0" sign="-" unitRef="usd">795,174</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Prepayments, deposits and other 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:IncreaseDecreaseInOtherCurrentAssets" scale="0" sign="-" unitRef="usd">581,031</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:IncreaseDecreaseInOtherCurrentAssets" scale="0" unitRef="usd">70,480</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:IncreaseDecreaseInOtherCurrentAssets" scale="0" unitRef="usd">1,196,470</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; padding-left: 0.25in">Accounts payable</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:IncreaseDecreaseInAccountsPayableAndAccruedLiabilities" scale="0" sign="-" unitRef="usd">6,150,415</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:IncreaseDecreaseInAccountsPayableAndAccruedLiabilities" scale="0" sign="-" unitRef="usd">4,444,198</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:IncreaseDecreaseInAccountsPayableAndAccruedLiabilities" scale="0" unitRef="usd">3,010,706</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Accounts payable-related party</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:IncreaseDecreaseInAccountsPayableRelatedParties" scale="0" sign="-" unitRef="usd">695,373</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:IncreaseDecreaseInAccountsPayableRelatedParties" scale="0" unitRef="usd">725,362</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-114">-</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; padding-left: 0.25in">Accrued expenses and other current liabilities</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:IncreaseDecreaseInDeferredCompensation" scale="0" unitRef="usd">999,500</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:IncreaseDecreaseInDeferredCompensation" scale="0" sign="-" unitRef="usd">1,359,673</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:IncreaseDecreaseInDeferredCompensation" scale="0" unitRef="usd">860,110</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Prepaid expense &#8211; related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-115">-</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-116">-</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="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDueFromRelatedPartiesCurrent" scale="0" sign="-" unitRef="usd">813,038</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-left: 0.25in">Taxes payable</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:IncreaseDecreaseInAccruedTaxesPayable" scale="0" sign="-" unitRef="usd">578,597</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:IncreaseDecreaseInAccruedTaxesPayable" scale="0" unitRef="usd">15,089</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:IncreaseDecreaseInAccruedTaxesPayable" scale="0" sign="-" unitRef="usd">216,624</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Deferred revenue</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:IncreaseDecreaseInDeferredRevenue" scale="0" sign="-" unitRef="usd">357,827</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:IncreaseDecreaseInDeferredRevenue" scale="0" unitRef="usd">220,459</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:IncreaseDecreaseInDeferredRevenue" scale="0" unitRef="usd">158,474</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-left: 0.25in">Customer deposits</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="pbts:IncreaseDecreaseInCustomerDeposit" scale="0" sign="-" unitRef="usd">49,006</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="pbts:IncreaseDecreaseInCustomerDeposit" scale="0" sign="-" unitRef="usd">11,507</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="pbts:IncreaseDecreaseInCustomerDeposit" scale="0" unitRef="usd">268,706</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 0.25in">Lease liabilities</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"><div style="-sec-ix-hidden: hidden-fact-117">-</div></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)">
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  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <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>
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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="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForProceedsFromLoansReceivable" scale="0" sign="-" unitRef="usd">4,039,454</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="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">3,873,555</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Proceeds from disposal of property 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:ProceedsFromSaleOfPropertyPlantAndEquipment" scale="0" unitRef="usd">45,670</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 style="text-align: left; padding-bottom: 1.5pt; padding-left: 0.25in">Paid for long -term investment</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:PaymentsToAcquireLongtermInvestments" scale="0" unitRef="usd">445,831</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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    <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-120">-</div></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">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">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" sign="-" unitRef="usd">234,262</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; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></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="text-align: left; padding-left: 0.25in">Proceeds from bank loans</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:ProceedsFromBankDebt" scale="0" unitRef="usd">3,715,262</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:ProceedsFromBankDebt" scale="0" unitRef="usd">4,340,547</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:ProceedsFromBankDebt" scale="0" unitRef="usd">6,517,739</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Repayments of bank loans</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:RepaymentsOfBankDebt" scale="0" unitRef="usd">5,201,367</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:RepaymentsOfBankDebt" scale="0" unitRef="usd">4,650,586</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:RepaymentsOfBankDebt" scale="0" unitRef="usd">3,765,757</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; padding-left: 0.25in">Proceeds from private placement and market offering</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:ProceedsFromIssuanceOfPrivatePlacement" scale="0" unitRef="usd">7,027,254</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:ProceedsFromIssuanceOfPrivatePlacement" scale="0" unitRef="usd">5,128,477</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:ProceedsFromIssuanceOfPrivatePlacement" scale="0" unitRef="usd">17,600,000</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">Proceeds from issuance of convertible note</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:ProceedsFromConvertibleDebt" scale="0" unitRef="usd">7,979,983</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:ProceedsFromConvertibleDebt" scale="0" unitRef="usd">6,860,000</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:ProceedsFromConvertibleDebt" scale="0" unitRef="usd">50,000,000</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-left: 0.25in">Payments to 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:RepaymentsOfRelatedPartyDebt" scale="0" unitRef="usd">671,868</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:RepaymentsOfRelatedPartyDebt" scale="0" unitRef="usd">681,473</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:RepaymentsOfRelatedPartyDebt" scale="0" unitRef="usd">308,284</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">(Repayment to) loan from third party</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:ProceedsFromOtherShortTermDebt" scale="0" sign="-" unitRef="usd">445,831</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:ProceedsFromOtherShortTermDebt" scale="0" unitRef="usd">465,059</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-121">-</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; padding-bottom: 1.5pt; padding-left: 0.25in">Capital contribution by non-controlling shareholder</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"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="pbts:ProceedsFromCapitalContributionByNoncontrollingShareholder" scale="0" unitRef="usd">247</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="pbts:ProceedsFromCapitalContributionByNoncontrollingShareholder" scale="0" unitRef="usd">91</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">NET CASH PROVIDE 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">12,403,433</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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    <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">70,043,789</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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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: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#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: 6pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:</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>
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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>
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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; text-align: center"><span style="font-size: 6pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</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"></p><div>

</div><!-- Field: Page; Sequence: 136; 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>
    </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="f_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.</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 &#8212; Nature of business and organization</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</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; text-indent: 0.5in">Powerbridge Technologies Co.,
Ltd. (&#8220;Powerbridge&#8221; or the &#8220;Company&#8221;), is a company that was established under the laws of the Cayman Islands
on July 27, 2018 as a holding company. The Company, through its subsidiaries (collectively the &#8220;Company&#8221;), is a provider of
software application and technology services to corporate and government customers engaged in global trade. Mr. Stewart Lor, the Company&#8217;s
Chairman of the Board and Chief Executive Officer (&#8220;CEO&#8221;), together with his brother, Mr. Ban Lor, are the ultimate Controlling
Shareholders of the Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#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"><span style="text-decoration:underline">Initial Public Offering </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_4" id="_NatureOfOperations-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 4, 2019, the Company
consummated its initial public offering (&#8220;IPO&#8221;) of <ix:nonFraction contextRef="c43" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">2,012,500</ix:nonFraction> Ordinary Shares at a price of $<ix:nonFraction contextRef="c43" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">5.00</ix:nonFraction> per shares including the
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Capital Market under the symbol &#8220;PBTS.&#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_5" id="_NatureOfOperations-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">COVID-19</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_6" id="_NatureOfOperations-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The COVID-19 pandemic has
caused disruptions to our operations starting in December 2019. During the first quarter of 2020, our operations were closed in February
due to China government mandates and we moved quickly to transition our colleague base to a fully remote working environment in all our
locations. At the beginning of March 2020, substantially all of our employee were back to work in our offices. The ongoing COVID-19 pandemic
not only adversely impacted our operations but business of our customers. We experienced delayed customer payments and rescheduled customer
orders, which adversely impacts the Company&#8217;s results of operations, cash flows and financial position. During 2022, our business
continued to be adversely impacted by the COVID-19 pandemic. Specifically, a new COVID-19 subvariant (Omicron) outbreak hit China in March
2022, spreading more quickly and easily than previous strains. As a result, a new round of lockdowns, quarantines, or travel restrictions
has been imposed upon different provinces or cities in China by the relevant local government authorities.&#160;The lockdowns and quarantines
delayed our existing project progress and adversely impacted our revenue. Meanwhile, the government had to cut back on fixed assets investment
due to large public health expenditures, which in turn reduced new project gaining and had adverse impact on revenue. On December&#160;7,
2022, China announced 10 new rules&#160;that constitute a relaxation of almost all of its stringent COVID-19 pandemic control measures.
Shortly after their announcement, additional mobility restrictions issued by local governments were also scrapped. While such measures
effectively reopened business within China, COVID-19&#8217;s continued existence may have significant and still not well-understood impacts
on our industry.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_7" id="_NatureOfOperations-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The extent of the impact on
our future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence
of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy
and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. The Company continues taking actions
to help mitigate, as best we can, the impact of the COVID-19 pandemic on the health and well-being of our employees, the communities in
which we operate and our partners, as well as the impact on our operations and business as a whole.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</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"><span style="text-decoration:underline">Reorganization</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_9" id="_NatureOfOperations-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A reorganization of the Company&#8217;s
legal structure was completed on August 27, 2018. The reorganization involved the incorporation of Powerbridge, a Cayman Islands holding
company, and its wholly owned subsidiaries, Powerbridge Holdings Co., Limited (&#8220;Powerbridge HK&#8221;), a holding company incorporated
on July 27, 2018 under the laws of Hong Kong; and the transfer of all equity ownership of Powerbridge Technology Group Co., Ltd. (&#8220;Powerbridge
Zhuhai&#8221;) to Powerbridge HK from the former shareholders of Powerbridge Zhuhai through an investment holding company. In consideration
of the transfer, the Company issued <ix:nonFraction contextRef="c46" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">11,508,747</ix:nonFraction> shares of the Company with par value <ix:nonFraction contextRef="c46" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction> per share to the former shareholders of Powerbridge
Zhuhai. On February 10, 2019, <ix:nonNumeric contextRef="c47" name="pbts:ReverseStockSplitDescription">the board of directors approved a reverse stock split of the Company&#8217;s authorized number of Ordinary
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Company has retroactively adjusted all shares and per share data for all the periods presented.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><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; text-indent: 0.5in">Prior to the reorganization,
Powerbridge Zhuhai&#8217;s equity interests were held by the former shareholders through an investment holding company, of which the Controlling
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Guangdong province under the laws of the People&#8217;s Republic of China (the &#8220;PRC&#8221; or &#8220;China&#8221;). Powerbridge
Zhuhai is an operating subsidiary that provides global trade software application and technology services to corporate and government
customers located in the PRC. Beijing Powerbridge Technology Co., Ltd. (&#8220;Powerbridge Beijing&#8221;), a company conducting engineering
and IT research and development activities, was incorporated on September 28, 2017 in Beijing under the laws of PRC, with Powerbridge
Zhuhai owning <ix:nonFraction contextRef="c51" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">55</ix:nonFraction>% and Mr. Tianfei Feng owning <ix:nonFraction contextRef="c52" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">45</ix:nonFraction>% of equity interest. Since inception, Powerbridge Zhuhai and Mr. Tianfei Feng have only
made nominal investments in Powerbridge Beijing and no substantial business operations have occurred; as a result, Powerbridge Zhuhai
and Mr. Tianfei Feng agreed to deregister the entity. Mr. Tianfei Feng later became the Company&#8217;s Chief Research and Development
Officer and the technology research and development activities originally conducted in Powerbridge Beijing are now conducted through the
Beijing branch of Powerbridge Zhuhai. Powerbridge Beijing was deregistered on October 25, 2018.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

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shareholders transferred their <ix:nonFraction contextRef="c53" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% ownership interest in Powerbridge Zhuhai to Powerbridge HK, which is <ix:nonFraction contextRef="c54" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% owned by Powerbridge. After
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</div><div>

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

</div><!-- Field: Page; Sequence: 137; 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 -->7<!-- 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"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.</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; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 1 &#8212; Nature of business and organization
</b>(continued)</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"><span style="text-decoration:underline">Reorganization - continued</span></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><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; text-indent: 0.5in">Since the Company and its
subsidiaries are effectively controlled by the same group of the shareholders before and after the reorganization, they are considered
under common control. The above-mentioned transactions were accounted for as a recapitalization. The consolidation of the Company and
its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become
effective as of the beginning of the first period presented in the consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</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; text-indent: 0.5in">As of December 31, 2022, the
details of the Company&#8217;s principal subsidiaries 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><ix:continuation continuedAt="_NatureOfOperations-c0_cont_14" id="_NatureOfOperations-c0_cont_13"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfSubsidiaryOfLimitedLiabilityCompanyOrLimitedPartnershipDescriptionTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfSubsidiaryOfLimitedLiabilityCompanyOrLimitedPartnershipDescriptionTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="padding-left: 0.125in; text-indent: -0.125in; vertical-align: bottom; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Major subsidiaries</b></span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Percentage of<br/>
Ownership</b></span></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Date of<br/>
Incorporation</b></span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Place of<br/>
Incorporation</b></span></td>
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  <tr>
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  <tr style="background-color: rgb(204,238,255)">
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  <tr>
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  <tr style="background-color: rgb(204,238,255)">
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  <tr>
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  <tr style="background-color: rgb(204,238,255)">
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  <tr>
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  <tr style="background-color: rgb(204,238,255)">
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  <tr>
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  <tr style="background-color: rgb(204,238,255)">
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  <tr>
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  <tr style="background-color: rgb(204,238,255)">
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  <tr>
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  <tr style="background-color: rgb(204,238,255)">
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  <tr>
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_15" id="_NatureOfOperations-c0_cont_14"><ix:continuation continuedAt="_ScheduleOfSubsidiaryOfLimitedLiabilityCompanyOrLimitedPartnershipDescriptionTextBlock-c0_cont_2" id="_ScheduleOfSubsidiaryOfLimitedLiabilityCompanyOrLimitedPartnershipDescriptionTextBlock-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="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"><sup>(1)</sup></span></td><td style="text-align: justify"><ix:footnote id="ix_0_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
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</div><div>

</div><ix:continuation id="_NatureOfOperations-c0_cont_15"><ix:continuation id="_ScheduleOfSubsidiaryOfLimitedLiabilityCompanyOrLimitedPartnershipDescriptionTextBlock-c0_cont_2"><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"> <td style="width: 0in"></td> <td style="width: 0.25in; font-size: 10pt; text-align: justify"><span style="font-size: 10pt"><sup>(2)</sup></span></td> <td style="font-size: 10pt; text-align: justify"><ix:footnote id="ix_1_footnote" xml:lang="en-US"><span style="font-size: 10pt; ">Certain third-party shareholders of Zhixin signed consents with the Company for the year ended December 31, 2022, which stated that the Company has the power and control to direct the activities that most significantly impact Zhixin and they unconditionally vote by consensus with the Company in all the board decisions. As such, the Company consolidates the financial results of Zhixin based on the voting power.</span></ix:footnote></td></tr> </table></ix:continuation></ix:continuation><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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 138; 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 -->8<!-- 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; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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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policies</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_3" id="_SignificantAccountingPoliciesTextBlock-c0_cont_2"><ix:continuation id="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying consolidated
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_4" id="_SignificantAccountingPoliciesTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" continuedAt="_ConsolidationPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ConsolidationPolicyTextBlock"><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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances are eliminated
upon consolidation. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon
consolidation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_6" id="_SignificantAccountingPoliciesTextBlock-c0_cont_5"><ix:continuation continuedAt="_ConsolidationPolicyTextBlock-c0_cont_3" id="_ConsolidationPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subsidiaries are those entities
in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial
and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at
the meeting of&#160;directors.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_7" id="_SignificantAccountingPoliciesTextBlock-c0_cont_6"><ix:continuation id="_ConsolidationPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Non-controlling interest represents
the portion of the net assets of a subsidiary attributable to interests that are not owned by the Company. The non-controlling interest
is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling
interest&#8217;s operating result is presented on the face of the consolidated statements of income and comprehensive income as an allocation
of the total income for the year between non-controlling shareholders and the shareholders 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_8" id="_SignificantAccountingPoliciesTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" continuedAt="pbts_LiquidityPolicyTextBlock-c0_cont_1" escape="true" name="pbts:LiquidityPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Liquidity </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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2022, the Company had negative operation cash flow of approximately $<ix:nonFraction contextRef="c0" decimals="-5" format="ixt:num-dot-decimal" name="pbts:NegativeOperatingCash" scale="6" unitRef="usd">9.7</ix:nonFraction> million. The Company has historically funded its working capital
needs primarily from public offering, operations, bank loans, advance payments from customers and shareholders. The working capital requirements
are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts, the progress or execution on
customer contracts, and the timing of accounts receivable collections.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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and capital expenditure commitments. As of December 31, 2022, the Company had cash of approximately $<ix:nonFraction contextRef="c2" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsAtCarryingValue" scale="6" unitRef="usd">9.4</ix:nonFraction> million.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_11" id="_SignificantAccountingPoliciesTextBlock-c0_cont_10"><ix:continuation continuedAt="pbts_LiquidityPolicyTextBlock-c0_cont_4" id="pbts_LiquidityPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 1, 2022, <ix:nonNumeric contextRef="c72" name="pbts:SecuritiesPurchaseAgreementDescription">the
Company entered into a securities purchase agreement with White Lion Capital LLC (&#8220;White Lion&#8221;). Pursuant to the agreement,
White Lion shall purchase up to $15 million of the Company&#8217;s ordinary shares at the lowest daily VWAP of the Ordinary Shares during
the Valuation Period by 97%. As of December 31, 2022, the Company issued 22,875,000 ordinary shares and net proceeds was $3,519,202. In
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_12" id="_SignificantAccountingPoliciesTextBlock-c0_cont_11"><ix:continuation continuedAt="pbts_LiquidityPolicyTextBlock-c0_cont_5" id="pbts_LiquidityPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 9, 2022, <ix:nonNumeric contextRef="c73" name="pbts:SecuritiesPurchaseAgreementDescription">the
Company entered into a securities purchase agreement with YA II PN, LTD.. Pursuant to the agreement, YA II PN, LTD. shall purchase up
to $30 million of the Company&#8217;s ordinary shares at the market price by 96%, and the company shall issue to YA II PN, LTD. 223,880
ordinary shares as a commitment fee. As of December 31, 2022, the Company issued 17,035,074 ordinary shares and net proceeds was $3,511,317.
The Company issued 223,880 ordinary shares for commitment fee on January 1, 2023. In 2023, the Company issued 26,235,245 ordinary shares
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_13" id="_SignificantAccountingPoliciesTextBlock-c0_cont_12"><ix:continuation continuedAt="pbts_LiquidityPolicyTextBlock-c0_cont_6" id="pbts_LiquidityPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 29, 2022, <ix:nonNumeric contextRef="c74" name="pbts:SecuritiesPurchaseAgreementDescription">the
Company entered into a securities purchase agreement with TBS Capital LP, (&#8220;TBS&#8221;). Pursuant to the agreement, TBS shall purchase
up to $15 million of the Company&#8217;s ordinary shares at the market price by 96%, and the company shall issue to Yorkville 223,880
ordinary shares as a commitment fee. The Company issued 223,880 ordinary shares for commitment fee on December 15, 2022. In 2023, the
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</div><div>

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its cash on hand and financing cash flows will be sufficient to fund its operations over at least the next 12 months from the date of
this report. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions
or other developments, and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment,
acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company&#8217;s
amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><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"></p><div>

</div><!-- Field: Page; Sequence: 139; 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 -->9<!-- 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; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED 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"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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_15" id="_SignificantAccountingPoliciesTextBlock-c0_cont_14"><ix:nonNumeric contextRef="c0" continuedAt="_UseOfEstimates-c0_cont_1" escape="true" name="us-gaap:UseOfEstimates"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Use of estimates</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_16" id="_SignificantAccountingPoliciesTextBlock-c0_cont_15"><ix:continuation id="_UseOfEstimates-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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&#8217;s
consolidated financial statements include but not limited to the useful lives of property and equipment and capitalized development cost,
impairment of long-lived assets, valuation of accounts receivables, valuation of convertible loans, loans to third parties, revenue recognition
and realization of deferred tax assets and uncertain tax positions. Actual results could differ from these estimates.</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_17" id="_SignificantAccountingPoliciesTextBlock-c0_cont_16"><ix:nonNumeric contextRef="c0" continuedAt="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Foreign currency translation</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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of the Company are the local currency of the county in which the subsidiaries operate. The Company&#8217;s financial statements are reported
using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated
at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance
sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currencies
is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the
average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily
agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different
exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in
consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement
of operations and comprehensive income (loss).</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_19" id="_SignificantAccountingPoliciesTextBlock-c0_cont_18"><ix:nonNumeric contextRef="c0" continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:FairValueMeasurementPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Fair value measurement</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_20" id="_SignificantAccountingPoliciesTextBlock-c0_cont_19"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_2" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASC 825-10 requires certain
disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value
hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs
and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_21" id="_SignificantAccountingPoliciesTextBlock-c0_cont_20"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_3" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_2"><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-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
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</tr></table><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_22" id="_SignificantAccountingPoliciesTextBlock-c0_cont_21"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_4" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_3"><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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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_23" id="_SignificantAccountingPoliciesTextBlock-c0_cont_22"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_5" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_24" id="_SignificantAccountingPoliciesTextBlock-c0_cont_23"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_6" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise disclosed,
the fair value of the Company&#8217;s financial instruments including cash, notes and accounts receivable, due from related parties, prepayments,
deposits and other current assets, notes and accounts payable, customer deposits, salaries and benefits payables, due to related party
and taxes payable approximates their recorded values due to their short-term maturities. The fair value of the long-term prepayments,
deposits and other assets and loans to third parties approximate their carrying amounts because the deposits were paid in cash.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_25" id="_SignificantAccountingPoliciesTextBlock-c0_cont_24"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_7" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company elected the fair
value option to account for its convertible loan. The Company engaged an independent valuation firm to perform the valuation. The fair
value of the convertible loans is calculated using the binomial tree model. The convertible loans are classified as level 3 instruments
as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Company&#8217;s
own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time
to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to
Note 11 for additional information.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><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"></p><div>

</div><!-- Field: Page; Sequence: 140; Value: 1 --><div>
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    </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: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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_26" id="_SignificantAccountingPoliciesTextBlock-c0_cont_25"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_8" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As the inputs used in developing
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_27" id="_SignificantAccountingPoliciesTextBlock-c0_cont_26"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_9" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a reconciliation of the beginning and ending balances
for convertible notes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2022
and 2021:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_28" id="_SignificantAccountingPoliciesTextBlock-c0_cont_27"><ix:nonNumeric contextRef="c0" escape="true" name="pbts:ScheduleOfReconciliationOfTheBeginningAndEndingBalancesForConvertibleLoansMeasuredAtFairValueOnARecurringBasisTableTextBlock"><ix:continuation id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_9"><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">
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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>
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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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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_29" id="_SignificantAccountingPoliciesTextBlock-c0_cont_28"><ix:nonNumeric contextRef="c0" continuedAt="_CashAndCashEquivalentsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:CashAndCashEquivalentsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Cash and cash equivalent</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_30" id="_SignificantAccountingPoliciesTextBlock-c0_cont_29"><ix:continuation id="_CashAndCashEquivalentsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Cash and cash equivalent comprise
cash at banks and on hand, which includes deposits with original maturities of three months or less with commercial banks in PRC. As of
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</div><div>

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</div><div>

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security deposits as required by certain customers on the Company&#8217;s projects. The deposits in restricted bank accounts cannot be
withdrawn until the Company completes the related projects. Restricted cash is classified as either current or non-current based on when
the funds will be released in accordance with the terms of the respective agreements. As of December 31, 2022 and 2021, restricted cash
consists of cash equivalents of $<span style="-sec-ix-hidden: hidden-fact-128">nil</span> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCashEquivalents" scale="0" unitRef="usd">95,252</ix:nonFraction> used as collateral to secure the Company&#8217;s projects. The Company is required to
keep certain amounts on deposit that are subject to withdrawal restrictions.</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_33" id="_SignificantAccountingPoliciesTextBlock-c0_cont_32"><ix:nonNumeric contextRef="c0" continuedAt="_ReceivablesPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ReceivablesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Accounts receivable, net</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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is stated at the original invoiced amount net of write-offs and allowance for doubtful accounts. The Company reviews the accounts receivable
on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. Past-due balances over 90
days are reviewed individually for collectability. In evaluating the collectability of individual accounts receivable balances, the Company
considers several factors, including the age of the balance, the customer&#8217;s payment history, current credit-worthiness, and current
economic trends. Accounts receivable balances are written off after all collection efforts have been exhausted. Typically, the Company
includes unbilled receivables in accounts receivable for contracts on which revenue has been recognized, but for which the customer has
not yet been billed. Unbilled receivables, substantially all of which are expected to be billed within one year are stated at their estimated
realizable value and consist of costs and fees billable on contract completion or the occurrence of contractual payment phase.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></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>
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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>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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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deposits made to our customers; advances to employees and loan receivables from business partners. Prepayment, deposit and other assets
are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are
reviewed periodically to determine whether their carrying value has become impaired.</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>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_37" id="_SignificantAccountingPoliciesTextBlock-c0_cont_36"><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, net</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_38" id="_SignificantAccountingPoliciesTextBlock-c0_cont_37"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Property and equipment, net,
mainly comprise furniture and furniture, vehicles, compute, equipment and buildings are stated at cost less accumulated depreciation and
impairment. Property and equipment are depreciated over the estimated useful lives of the assets on a straight-line basis, after considering
the estimated residual value.</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:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The estimated useful lives
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</div><div>

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renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and the related accumulated depreciation
of assets retired or sold are removed from the respective accounts, and any gain or loss is charged to the statement of income and comprehensive
income.</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_42" id="_SignificantAccountingPoliciesTextBlock-c0_cont_41"><ix:nonNumeric contextRef="c0" continuedAt="_CapitalizationOfInternalCostsPolicy-c0_cont_1" escape="true" name="us-gaap:CapitalizationOfInternalCostsPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Capitalized development costs</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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985-20 provides guidance on capitalization of the costs of software developed or obtained for sold, leased, or marketed. The Company expenses
all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred during the application development
stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if it is determined that these upgrades
or enhancements add additional functionality to the application. The capitalized development cost is amortized on a straight-line basis
over the estimated useful life, which is generally five years. Management evaluates the useful lives of these assets on an annual basis
and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.</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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property, equipment, furniture and fixtures and intangible assets with finite lives are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying value of an asset may not be recoverable. When these events occur, the Company measures impairment
by comparing the carrying values of the long-lived assets to the estimated undiscounted future cash flows expected to result from the
use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amounts
of the assets, the Company would recognize an impairment loss based on the excess of the carrying value over the assessed discounted cash
flow amount. For the years ended December 31, 2022, 2021 and 2020 the Company recognized $<span style="-sec-ix-hidden: hidden-fact-129"><span style="-sec-ix-hidden: hidden-fact-130"><span style="-sec-ix-hidden: hidden-fact-131">nil</span></span></span> impairment for the long-lived assets.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><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"></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 -->12<!-- 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; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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_46" id="_SignificantAccountingPoliciesTextBlock-c0_cont_45"><ix:nonNumeric contextRef="c0" continuedAt="_InvestmentPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:InvestmentPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Long-term investments</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_47" id="_SignificantAccountingPoliciesTextBlock-c0_cont_46"><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; text-indent: 0.5in">Long-term investments are
primarily consisted of equity investments in privately held entities accounted for using the measurement alternative and equity investments
accounted for using the equity method. On January 1, 2022, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company started to record equity
investments at fair value, with gains and losses recorded through net earnings. And the Company elected to measure certain equity investments
without readily determinable fair value at cost, less impairments, plus or minus observable price changes and assess for impairment quarterly.</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_48" id="_SignificantAccountingPoliciesTextBlock-c0_cont_47"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_3" id="_InvestmentPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Equity investments without readily determinable fair values</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_49" id="_SignificantAccountingPoliciesTextBlock-c0_cont_48"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_4" id="_InvestmentPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">After the adoption of this
new accounting standard, the Company elected to record equity investments without readily determinable fair values and not accounted for
under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report
changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity investment are
required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the
same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_50" id="_SignificantAccountingPoliciesTextBlock-c0_cont_49"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_5" id="_InvestmentPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Equity investments with readily determinable
fair values</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_51" id="_SignificantAccountingPoliciesTextBlock-c0_cont_50"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_6" id="_InvestmentPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">Equity investments with readily
determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets
at the reporting date.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_52" id="_SignificantAccountingPoliciesTextBlock-c0_cont_51"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_7" id="_InvestmentPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Equity investments accounted for using the
equity method</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_53" id="_SignificantAccountingPoliciesTextBlock-c0_cont_52"><ix:continuation id="_InvestmentPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">The Company accounts for its
equity investment over which it has significant influence but does not own a majority equity interest or otherwise control, using the
equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the
earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment
by considering factors including, but not limited to, current economic and market conditions, operating performance of the entity, including
current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly
for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates
and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment
is other-than-temporary.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_54" id="_SignificantAccountingPoliciesTextBlock-c0_cont_53"><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; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_55" id="_SignificantAccountingPoliciesTextBlock-c0_cont_54"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_2" id="_RevenueRecognitionPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company adopted ASC Topic
606 Revenue from Contracts with Customers (&#8220;ASC 606&#8221;) on January 1, 2019 using the modified retrospective approach. Revenues
for the years ended December 31, 2022, 2021 and 2020 were presented under ASC 606. There is no adjustment to the opening balance of retained
earnings at January 1, 2019 since there was no change to the timing and pattern of revenue recognition upon adoption of ASC 606. Under
ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company&#8217;s customers in an amount
of consideration to which an entity expects to be entitled to in exchange for those goods or services and is recorded net of value-added
tax (&#8220;VAT&#8221;). To achieve that core principle, the Group applies the following steps:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_56" id="_SignificantAccountingPoliciesTextBlock-c0_cont_55"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_3" id="_RevenueRecognitionPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 1: Identify the contract
(s) with a customer</p></ix:continuation></ix:continuation><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_57" id="_SignificantAccountingPoliciesTextBlock-c0_cont_56"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_4" id="_RevenueRecognitionPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 2: Identify the performance
obligations in the contract</p></ix:continuation></ix:continuation><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_58" id="_SignificantAccountingPoliciesTextBlock-c0_cont_57"><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; text-indent: 0.5in">Step 3: Determine the transaction
price</p></ix:continuation></ix:continuation><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_59" id="_SignificantAccountingPoliciesTextBlock-c0_cont_58"><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; text-indent: 0.5in">Step 4: Allocate the transaction
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</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_60" id="_SignificantAccountingPoliciesTextBlock-c0_cont_59"><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; text-indent: 0.5in">Step 5: Recognize revenue
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_61" id="_SignificantAccountingPoliciesTextBlock-c0_cont_60"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_8" id="_RevenueRecognitionPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company derives its revenues
from four sources: (1) revenue from application development services, (2) revenue from consulting and technical support services, (3)
revenue from subscription services. All of the Company&#8217;s contracts with customer do not contain cancelable and refund-type provisions
and (4) trading revenue.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_62" id="_SignificantAccountingPoliciesTextBlock-c0_cont_61"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_9" id="_RevenueRecognitionPolicyTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) Revenue from application
development service</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#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_10" id="_RevenueRecognitionPolicyTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s application
development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning,
project design, application development and system integration based on customers&#8217; specific needs. These services also require significant
production and customization. Upon delivery of the services, customer acceptance is generally required. In the same contract, the Company
is generally required to provide post-contract customer support (&#8220;PCS&#8217;) for a period from three months to three years (&#8220;PCS
period&#8221;) after the customized application development services are delivered. The type of services for PCS clause is generally not
specified in the contracts or as stand-ready services on when-and-if-available basis. The unspecified PCS is stand-ready service on when-and-if-available
basis. It grants the customers on line and telephone access to technical support personnel during the term of the service. Specified PCS
includes specified service term in the contract such as training.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><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"></p><div>

</div><!-- Field: Page; Sequence: 143; 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>
    </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: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO 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: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><span style="text-decoration:underline">Revenue recognition - continued</span></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>

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The contracts contain negotiated billing terms which generally include multiple payment phases throughout the contract term and a significant
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_65" id="_SignificantAccountingPoliciesTextBlock-c0_cont_64"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_12" id="_RevenueRecognitionPolicyTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company sometimes provides
a warranty for its application development service contracts. The warranty period is typically 12-36 months upon the completion of the
application development service. In accordance with ASC 606-10-25-19, the Company believes the warranty provision in the contracts generally
represents service-type warranty, which is a distinct performance obligation and the Company also provides the similar service on standalone
basis and customers can benefit from the related service-type warranty service. For the service warranty component, the customer simultaneously
receives and consumes the benefits provided by the company performance over the warranty term, therefore, the service warranty is satisfied
over time. The revenue allocated to the service warranty is recognized over the warranty period.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>



</div><div>

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application development service, PCS or specific service and service-type warranty service, if applicable, are distinct performance obligations
in the application development service contracts. The Company provides these services on standalone basis and customers are able to benefit
from each of the service on its own. In addition, the timing of delivery of these performance obligations can be separately identifiable
in the contracts. The transaction price is allocated to these identified performance obligations based on the relative standalone selling
prices. The transaction price allocated to PCS or unspecific service and service-type warranty, if applicable, on a straight-line method
over the contractual period. Revenue allocated to specified PCS is recognized as the related services are rendered. The transaction price
allocated to application development service is recognized over time as the Company&#8217;s performance creates or enhances the project
controlled by the customer and the control is transferred continuously to our customers. The Company uses an input method based on cost
incurred as the Company believes that this method most accurately reflects the Company&#8217;s progress toward satisfaction of the performance
obligation, which usually takes less than one year. Under this method, the transaction price allocated to application development service
is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance
obligations.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#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_14" id="_RevenueRecognitionPolicyTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Incurred costs include all
direct material, labor and subcontract costs, and those indirect costs related to application development performance, such as indirect
labor, supplies, and tools. Cost-based input method requires the Company to make estimates of revenues and costs to complete the construction.
In making such estimates, significant judgment is required to evaluate assumptions related to the costs to complete the application development,
including materials, labor, and other system costs. The Company&#8217;s estimates are based upon the professional knowledge and experience
of our engineers and project managers to assess the contract&#8217;s schedule, performance, technical matters. The Company has adequate
cost history and estimating experience, and with respect to which management believes it can reasonably estimate total development costs.
If the estimated costs are greater than the related revenues, the Company recognizes the entire estimated loss in the period the loss
becomes known and can be reasonably estimated. Changes in estimates for application development services include but not limited to cost
forecast changes and change orders. The cumulative effect of changes in estimates is recorded in the period in which the revisions to
estimates are identified and the amounts can be reasonably estimated. To date, the Company has not incurred a material loss on any contracts.
However, as a policy, provisions for estimated losses on such engagements will be made during the period in which a loss becomes probable
and can be reasonably estimated. If contract modifications result in additional goods or services that are distinct from those transferred
before the modification, they are accounted for prospectively as if the Company entered into a new contract. If the goods or services
in the modification are not distinct from those in the original contract, sales and gross profit are adjusted using the cumulative catch-up
method for revisions in estimated total contract costs and contract values.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#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_15" id="_RevenueRecognitionPolicyTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In certain application development
service arrangements, the Company sells and delivers IT equipment on standalone basis prior to the delivery of the services. In these
cases, the Company controls the IT equipment before they are transferred to the customer. The Company has the right to direct the suppliers
and control the goods or assets transferred to its customers. Thus, the Company considers it should recognize revenue as a principal in
the gross amount of consideration to which it is entitled in exchange for the IT equipment delivered. The Company assesses the sale of
equipment is separately identifiable from other promises in the contract and it is distinct performance obligation within the context
of the contract. Accordingly, the revenue from the related IT equipment based on its relative standalone selling price is recognized upon
customer acceptance after delivery.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_69" id="_SignificantAccountingPoliciesTextBlock-c0_cont_68"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_16" id="_RevenueRecognitionPolicyTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) Revenue from consulting
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_70" id="_SignificantAccountingPoliciesTextBlock-c0_cont_69"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_17" id="_RevenueRecognitionPolicyTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue from consulting and
technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional consulting
and technical support services over contract terms beginning on the commencement date of each contract, which is the date its service
is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract term, which
is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance obligation.
The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis as customers
receive and consume benefits of such services.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></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 -->14<!-- 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-top: 0pt; margin-bottom: 0pt; text-align: center"><b>POWERBRIDGE TECHNOLOGIES
CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></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 - continued</span></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><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_71" id="_SignificantAccountingPoliciesTextBlock-c0_cont_70"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_18" id="_RevenueRecognitionPolicyTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(3) Revenue from subscription
services</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_72" id="_SignificantAccountingPoliciesTextBlock-c0_cont_71"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_19" id="_RevenueRecognitionPolicyTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue from subscription
services is comprised of subscription fees from customers accessing the Company&#8217;s software-as-a-service applications for a subscribed
period. The Company&#8217;s monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers.
The subscription arrangements are considered service contracts because customers do not have the right to take possession of the software
and can only benefit from the software when provided the right to access the software. Accordingly, the subscription services contracts
typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line
basis or based on the actual usage as customers receive and consume benefits of such services.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_73" id="_SignificantAccountingPoliciesTextBlock-c0_cont_72"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_20" id="_RevenueRecognitionPolicyTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(4) Trading revenue</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_74" id="_SignificantAccountingPoliciesTextBlock-c0_cont_73"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_21" id="_RevenueRecognitionPolicyTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">The Company started trading
business (sales of consumables) for the year ended December 31, 2021 and recognized revenue at a point in time when control of such products
transfers to the customer, which generally occurs upon shipment or delivery depending on the terms of the contracts with the customer.
Product sale contracts typically include a single performance obligation and there are no rights of return. The transaction price is based
on the fixed contractual price with the customer. Billings to the customer for the sale of products occur at the time the products are
transferred to the customer. Revenue from trading business accounted for <ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="pbts:PercentageOfRevenue" scale="-2" unitRef="pure">31.8</ix:nonFraction>% of the Company&#8217;s revenue for the year ended December
31, 2022.</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_75" id="_SignificantAccountingPoliciesTextBlock-c0_cont_74"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_22" id="_RevenueRecognitionPolicyTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue includes reimbursements
of travel and out-of-pocket expense, with equivalent amounts of expense recorded in cost of revenue. The Company reports revenues net
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and related surcharges on the revenues earned from providing services or products.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_76" id="_SignificantAccountingPoliciesTextBlock-c0_cont_75"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_23" id="_RevenueRecognitionPolicyTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Practical Expedient and Exemptions</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_77" id="_SignificantAccountingPoliciesTextBlock-c0_cont_76"><ix:continuation id="_RevenueRecognitionPolicyTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company does not disclose
the value of unsatisfied performance obligations within one year by applying the right to invoice practical expedient provided by ASC
606-10-55-18.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_79" id="_SignificantAccountingPoliciesTextBlock-c0_cont_78"><ix:continuation continuedAt="_PrecontractCostsPolicyTextBlock-c0_cont_2" id="_PrecontractCostsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contract costs include contract
acquisition costs and contract fulfillment costs which are all recorded within prepayments, deposits, and other assets in the consolidated
balance sheets.</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_80" id="_SignificantAccountingPoliciesTextBlock-c0_cont_79"><ix:continuation id="_PrecontractCostsPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contract acquisition costs&#160;consist
of incremental costs incurred by the Company to originate contracts with customers. Contract acquisition costs, which generally include
costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental costs are expected to be recovered
over the contract period. All other costs incurred regardless of obtaining a contract are expensed as incurred. Contract acquisition costs
are amortized over the period the costs are&#160;expected to contribute directly or indirectly to future cash flows, which is generally&#160;over
the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs relate. Contract fulfillments
costs&#160;consist of costs incurred by the Company to fulfill a contract with a customer and are capitalized when the costs generate
or enhance resources that will be used in satisfying future performance obligations of the contract and the costs are expected to be recovered.
Capitalized contract fulfillment costs generally include&#160;contracted services, direct labor, materials, and allocable overhead directly
related to resources required to fulfill the contract.&#160;Contract fulfillment costs are recognized in cost of revenue during the period
that the related costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term,
on a basis consistent with the transfer of goods or services to the customer to which the costs are related. There were no contract fulfillment
cost and contract acquisition costs as of December 31, 2022 and 2021.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_81" id="_SignificantAccountingPoliciesTextBlock-c0_cont_80"><ix:nonNumeric contextRef="c0" continuedAt="pbts_ContractBalancePolicyTextBlock-c0_cont_1" escape="true" name="pbts:ContractBalancePolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><span style="text-decoration:underline">Contract balance</span></i></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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both unbilled accounts receivable and billed accounts receivable. The Company records unbilled accounts receivable for revenue that has
been recognized in advance of billing the customer, which is common for application development service contracts. The unbilled accounts
receivable represents the Company&#8217;s right to consideration in exchange for the service that the Company has performed to the customer
before payment is due and the unbilled account receivable will be reclassified into billed accounts receivable when the Company has the
right to invoice. Contract liabilities are presented as customer deposits and deferred revenue on the consolidated balance sheet. Contract
liabilities relate to payments received in advance of completion of performance obligations under a contract. Contract liabilities are
recognized as revenue upon the completion of performance obligations. As of December 31, 2022 and 2021, the balance of customer deposits
amounted to $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="pbts:BalanceOfCustomerDeposit" scale="0" unitRef="usd">483,735</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="pbts:BalanceOfCustomerDeposit" scale="0" unitRef="usd">575,303</ix:nonFraction>, respectively. As of December 31, 2022 and 2021 the balance of deferred revenue amounted to $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenue" scale="0" unitRef="usd">893,263</ix:nonFraction>
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</div><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"></p><div>

</div><!-- Field: Page; Sequence: 145; 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 -->15<!-- 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"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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_84" id="_SignificantAccountingPoliciesTextBlock-c0_cont_83"><ix:continuation id="pbts_GovernmentSubsidiesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Government subsidies mainly
represent amounts granted by local government authorities as an incentive for companies to promote development of the local technology
industry. The Company receives government subsidies related to government sponsored projects, and records such government subsidies as
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</div><div>

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</div><div>

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</div><div>

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under operating leases. The Company determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use
assets on its consolidated balance sheets at lease commencement. The Company measures its lease liabilities based on the present value
of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental
borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease
payments over the term of the lease. The Company estimates its incremental borrowing rate based on an analysis of weighted average interest
rate of its own bank loans. The Company measures right-of-use assets based on the corresponding lease liability adjusted for payments
made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing
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</div><div>

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</div><div>

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</div><div>

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income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences
exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets
to the amount expected to be realized.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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not meeting the &#8220;more likely than not&#8221; test, no tax benefit is recorded. Penalties and interest incurred related to underpayment
of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes
have been incurred during the years ended December 31, 2022, 2021 and 2020. All of the tax returns of the Company&#8217;s subsidiary in
China 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; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities.
Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company&#8217;s subsidiary
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</div><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>

</div><!-- Field: Page; Sequence: 146; Value: 1 --><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: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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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Company in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits,
medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations
require that the Company make contributions to the government for these benefits based on a certain percentage of the employee&#8217;s
salaries. The Company has no legal obligation for the benefits beyond the contributions. The total amount was expensed as incurred.</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_97" id="_SignificantAccountingPoliciesTextBlock-c0_cont_96"><ix:nonNumeric contextRef="c0" continuedAt="_EarningsPerSharePolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Loss per share</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted
EPS presents the dilutive effect on a per share basis of the potential Ordinary Shares (e.g., convertible securities, options and warrants)
as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential Ordinary Shares that have
an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted
EPS. For the years ended December 31, 2022, 2021 and 2020, since the company had a loss, basic and dilutive loss per share is the same.</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="pbts_SharebasedCompensationPolicyTextBlock-c0_cont_1" escape="true" name="pbts:SharebasedCompensationPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Share-Based compensation</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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awards to employees and nonemployees directors and consultants in accordance with the provisions of ASC 718, Compensation&#8212;Stock
Compensation, and under the recently issued guidance following FASB&#8217;s pronouncement, ASU 2018-07, Compensation&#8212;Stock Compensation
(Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under ASC 718, and applicable updates adopted, for employee stock-based
awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense
with graded vesting on a straight-line basis over the requisite service period for the entire award. For the non-employee stock-based
awards, the fair value of the awards to non-employees are measured every reporting period based on the value of the Company&#8217;s common
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</div><div>

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</div><div>

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expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders&#8217; equity but are excluded from net income.
Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S.
dollar as its functional currencies.</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_103" id="_SignificantAccountingPoliciesTextBlock-c0_cont_102"><ix:nonNumeric contextRef="c0" continuedAt="pbts_StatementOfCashFlows-c0_cont_1" escape="true" name="pbts:StatementOfCashFlows"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Statement of Cash Flows</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.1pt">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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&#8220;Statement of Cash Flows,&#8221; cash flows from the Company&#8217;s operations are formulated based upon the local currencies.
As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes
in the corresponding balances on the balance sheets.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_105" id="_SignificantAccountingPoliciesTextBlock-c0_cont_104"><ix:nonNumeric contextRef="c0" continuedAt="_CommitmentsAndContingenciesPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:CommitmentsAndContingenciesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Commitments and Contingencies</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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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 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; text-indent: 0.5in"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><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"></p><div>

</div><!-- Field: Page; Sequence: 147; 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 -->17<!-- 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"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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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about allocating resources and assessing performance of the Company as a whole and hence, the Company has only one reportable segment.
The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company&#8217;s long-lived assets
are substantially all located in the PRC and all of the Company&#8217;s revenues are derived from the PRC. Therefore, no geographical
segments are&#160;presented.</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_109" id="_SignificantAccountingPoliciesTextBlock-c0_cont_108"><ix:nonNumeric contextRef="c0" continuedAt="_ConcentrationRiskCreditRisk-c0_cont_1" escape="true" name="us-gaap:ConcentrationRiskCreditRisk"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Concentrations of Risks</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_110" id="_SignificantAccountingPoliciesTextBlock-c0_cont_109"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_2" id="_ConcentrationRiskCreditRisk-c0_cont_1"><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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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_111" id="_SignificantAccountingPoliciesTextBlock-c0_cont_110"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_3" id="_ConcentrationRiskCreditRisk-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Assets that potentially subject
the Company to significant concentration of credit risk primarily consist of cash, restricted cash, accounts receivable and other current
assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of December 31,
2022 and 2021, the aggregate amount of cash and restricted cash of $<ix:nonFraction contextRef="c77" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCash" scale="0" unitRef="usd">5,418,450</ix:nonFraction> and $<ix:nonFraction contextRef="c78" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCash" scale="0" unitRef="usd">6,971,124</ix:nonFraction>, respectively, were held at major financial
institutions in PRC, which the management believes are of high credit quality. On May&#160;1, 2015, China&#8217;s new Deposit Insurance
Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required
to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not
be effective in providing complete protection for the Group&#8217;s accounts, as its aggregate deposits are much higher than the compensation
limit. However, the Group believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China
and the Group believes that those Chinese banks are financially sound based on public available information. The Company conducts credit
evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company establishes
an accounting policy for allowance for doubtful accounts on the individual customer&#8217;s and supplier&#8217;s financial condition,
credit history, and the current economic conditions.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_112" id="_SignificantAccountingPoliciesTextBlock-c0_cont_111"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_4" id="_ConcentrationRiskCreditRisk-c0_cont_3"><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="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign currency risk</span></td></tr>
  </table><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_113" id="_SignificantAccountingPoliciesTextBlock-c0_cont_112"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_5" id="_ConcentrationRiskCreditRisk-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A majority of the Company&#8217;s
expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries&#8217; assets and liabilities
are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required
by law to be transacted only by authorized financial institutions at exchange rates set by the People&#8217;s Bank of China (&#8220;PBOC&#8221;).
Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory
bodies which require certain supporting documentation in order to affect the remittance.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_114" id="_SignificantAccountingPoliciesTextBlock-c0_cont_113"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_6" id="_ConcentrationRiskCreditRisk-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s
functional currency is the RMB, and the Company&#8217;s financial statements are presented in U.S. dollars. The RMB appreciated by
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government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB
relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any
underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated
in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other
business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive
from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for
dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a
negative effect on the U.S. dollar amount available to the Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:continuation></ix:continuation><div>

</div><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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#8212; Summary of significant accounting
policies </b>(continued)</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"><span style="text-decoration:underline">Concentrations of Risks - continued</span></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><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_115" id="_SignificantAccountingPoliciesTextBlock-c0_cont_114"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_7" id="_ConcentrationRiskCreditRisk-c0_cont_6"><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: 48px">&#160;</td>
    <td style="width: 24px"><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">Significant customers</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_116" id="_SignificantAccountingPoliciesTextBlock-c0_cont_115"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_8" id="_ConcentrationRiskCreditRisk-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December
31, 2022, one customer accounted for <ix:nonFraction contextRef="c79" decimals="3" format="ixt:num-dot-decimal" name="pbts:TotalRevenuesPercentage" scale="-2" unitRef="pure">31.8</ix:nonFraction>% of the Company&#8217;s total revenues. For the year ended December 31, 2021, one customer accounted
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total revenues. As of December 31, 2022 and 2021, no customer accounted for more than <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:HealthCareOrganizationAllowanceForDoubtfulAccountsPercentageOfAccountsReceivable" scale="-2" unitRef="pure"><ix:nonFraction contextRef="c4" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:HealthCareOrganizationAllowanceForDoubtfulAccountsPercentageOfAccountsReceivable" scale="-2" unitRef="pure">10</ix:nonFraction></ix:nonFraction>% of the Company&#8217;s accounts receivable.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_117" id="_SignificantAccountingPoliciesTextBlock-c0_cont_116"><ix:continuation continuedAt="_ConcentrationRiskCreditRisk-c0_cont_9" id="_ConcentrationRiskCreditRisk-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><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">Significant suppliers</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_118" id="_SignificantAccountingPoliciesTextBlock-c0_cont_117"><ix:continuation id="_ConcentrationRiskCreditRisk-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December
31, 2022, three suppliers accounted for <ix:nonFraction contextRef="c82" decimals="3" format="ixt:num-dot-decimal" name="pbts:TotalPurchasesPercentage" scale="-2" unitRef="pure">38.1</ix:nonFraction>%, <ix:nonFraction contextRef="c83" decimals="3" format="ixt:num-dot-decimal" name="pbts:TotalPurchasesPercentage" scale="-2" unitRef="pure">14.8</ix:nonFraction>% and <ix:nonFraction contextRef="c84" decimals="3" format="ixt:num-dot-decimal" name="pbts:TotalPurchasesPercentage" scale="-2" unitRef="pure">12.1</ix:nonFraction>% of the Company&#8217;s total purchases, respectively. For the year ended
December 31, 2021, one supplier accounted for <ix:nonFraction contextRef="c85" decimals="3" format="ixt:num-dot-decimal" name="pbts:TotalPurchasesPercentage" scale="-2" unitRef="pure">15.8</ix:nonFraction>% of the Company&#8217;s total purchases. For the year ended December 31, 2020, one
supplier accounted for <ix:nonFraction contextRef="c86" decimals="3" format="ixt:num-dot-decimal" name="pbts:TotalPurchasesPercentage" scale="-2" unitRef="pure">21.3</ix:nonFraction>% of the Company&#8217;s total purchases. As of December 31, 2022, one supplier accounted for <ix:nonFraction contextRef="c82" decimals="3" format="ixt:num-dot-decimal" name="pbts:TotalAccountsPayablePercentage" scale="-2" unitRef="pure">10.9</ix:nonFraction>% of the
Company&#8217;s total accounts payable. As of December 31, 2021, no supplier accounted for more than <ix:nonFraction contextRef="c85" decimals="3" format="ixt:num-dot-decimal" name="pbts:TotalAccountsPayablePercentage" scale="-2" unitRef="pure">10.0</ix:nonFraction>% of the Company&#8217;s total
accounts payable.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_119" id="_SignificantAccountingPoliciesTextBlock-c0_cont_118"><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_120" id="_SignificantAccountingPoliciesTextBlock-c0_cont_119"><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; text-indent: 0.5in">The Company considers the
applicability and impact of all accounting standards updates (&#8220;ASUs&#8221;). Management periodically reviews new accounting standards
that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (&#8220;the JOBS Act&#8221;), the Company meets the definition
of an emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards,
which delays the adoption of these accounting standards until they would apply to private companies.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_121" id="_SignificantAccountingPoliciesTextBlock-c0_cont_120"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_3" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">In February 2016, the FASB
issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet
for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative
disclosure requirements. In July 2018, the FASB issued updates to the lease standard making transition requirements less burdensome. The
update provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative
period presented in the company&#8217;s financial statements. The new guidance requires the lessee to record operating leases on the balance
sheet with a right-of-use asset and corresponding liability for future payment obligations. FASB further issued ASU 2018-11 &#8220;Target
Improvement&#8221; and ASU 2018-20 &#8220;Narrow-scope Improvements for Lessors.&#8221; In June 2020, the FASB issued ASU No. 2020-05,
&#8220;Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities&#8221; (&#8220;ASU
2020-05&#8221;) in response to the ongoing impacts to businesses in response to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides
a limited deferral of the effective dates for implementing previously issued ASU 842 to give some relief to businesses and the difficulties
they are facing during the pandemic. ASU 2020-05 affects entities in the &#8220;all other&#8221; category and public Not-For-Profit entities
that have not gone into effect yet regarding ASU 2016-02, Leases (Topic 842). Entities in the &#8220;all other&#8221; category may defer
to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As an emerging
growth company, the Company adopted ASU 2016-02, Leases (Topic 842) on January 1, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_122" id="_SignificantAccountingPoliciesTextBlock-c0_cont_121"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_4" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">In January 2020, the FASB issued
ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives
and Hedging (Topic 815) (&#8220;ASU 2020-01&#8221;), which is intended to clarify the interaction of the accounting for equity securities
under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward
contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company beginning January 1, 2021. The
adoption of this guidance did not have a material impact on the Company&#8217;s consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_123" id="_SignificantAccountingPoliciesTextBlock-c0_cont_122"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_5" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">In October 2021, the FASB issued
ASU No. 2021-08, &#8220;&#8216;Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with
Customers&#8221; (&#8220;ASU 2021-08&#8221;). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and
contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent
recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with
customers not acquired in a business combination. The amendments are effective for the Company beginning after December 15, 2023, and
are applied prospectively to business combinations that occur after the effective date. The Company does not expect the adoption of ASU
2021-04 will have a material effect on the consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_124" id="_SignificantAccountingPoliciesTextBlock-c0_cont_123"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_6" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">In November 2021, the FASB
issued Accounting Standards Update No 2021-10, Government Assistance (Topic 832)&#8201;&#8212;&#8201;Disclosures by Business Entities
about Government Assistance (&#8220;ASU 2021-10&#8221;). ASU 2021-10 requires additional disclosures regarding the nature of government
assistance, the related accounting policy used to account for assistance, the affected line items and applicable amounts within the consolidated
financial position and results of operations, and significant terms and conditions related to the assistance. Government assistance within
the scope of ASC 832 includes assistance that is administered by domestic, foreign, local, state, national governments, as well as departments,
independent agencies and intergovernmental organizations. The updated guidance increases transparency of government assistance including,
1) the type of assistance, 2) the entity&#8217;s accounting for assistance, and 3) the effect of assistance on the entity&#8217;s financial
statements. The new standard is effective for fiscal years beginning after December 15, 2021. The adoption of this guidance did not have
a material impact on the Company&#8217;s consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation id="_SignificantAccountingPoliciesTextBlock-c0_cont_124"><ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except for the above-mentioned
pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated financial position,
statements of operations and cash flows.</p></ix:continuation></ix:continuation><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: center"></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">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->19<!-- 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"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></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><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 0; text-align: justify"><b>Note 3 &#8212; Accounts receivable, net</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</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 0; text-align: justify; text-indent: 0.5in">Accounts receivable, net,
consists of the following:</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="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_3" id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:AccountsReceivableAllowanceForCreditLossTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <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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  </table><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="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_4" id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unbilled accounts receivable
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</div><div>

</div><ix:continuation continuedAt="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_5" id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 28, 2023, approximately
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</div><div>

</div><ix:continuation continuedAt="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_6" id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Movement of allowance for
doubtful accounts is as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_6"><ix:nonNumeric contextRef="c0" escape="true" name="pbts:ScheduleOfMovementOfAllowanceForDoubtfulAccountsTableTextBlock"><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">
    <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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  <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="c100" decimals="0" format="ixt:num-dot-decimal" name="pbts:ProvisionreverseForDoubtfulAccounts" scale="0" unitRef="usd">4,783,518</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="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-132">-</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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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c101" decimals="0" format="ixt:num-dot-decimal" name="pbts:WrittenOffRecovery" scale="0" sign="-" unitRef="usd">34,879</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="text-align: justify; padding-bottom: 1.5pt">Foreign currency translation adjustments</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  </table></ix:nonNumeric></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="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_1" escape="true" name="pbts:PrepaymentsDepositsAndOtherAssetsNetTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 4 &#8212; Prepayments, deposits and other
assets, net</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_2" id="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prepayments, deposits and
other assets, net consisted of the following:</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="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_3" id="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="pbts_ScheduleOfPrepaymentsDepositsAndOtherAssetsNetTableTextBlock-c0_cont_1" escape="true" name="pbts:ScheduleOfPrepaymentsDepositsAndOtherAssetsNetTableTextBlock"><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">
    <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>
    <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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  <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="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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherPrepaidExpenseCurrent" scale="0" unitRef="usd">188,216</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <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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</div><div>

</div><ix:continuation continuedAt="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_4" id="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_3"><ix:continuation id="pbts_ScheduleOfPrepaymentsDepositsAndOtherAssetsNetTableTextBlock-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="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">(1)</span></td><td style="text-align: justify"><ix:footnote id="ix_2_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Security
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</tr></table><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>

</div><ix:continuation continuedAt="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_5" id="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Movement of allowance for
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</div><div>

</div><ix:continuation id="pbts_PrepaymentsDepositsAndOtherAssetsNetTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="pbts:ScheduleOfAllowanceForDoubtfulAccountsTableTextBlock"><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">&#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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    <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:WriteOffOfDeferredDebtIssuanceCost" scale="0" unitRef="usd">88,846</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  </table></ix:nonNumeric></ix:continuation><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"></p><div>




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

</div><!-- Field: Page; Sequence: 150; 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"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></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><ix:nonNumeric contextRef="c0" continuedAt="pbts_LoansToThirdPartiesTextBlock-c0_cont_1" escape="true" name="pbts:LoansToThirdPartiesTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 5 &#8212; Loans to third parties </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="pbts_LoansToThirdPartiesTextBlock-c0_cont_2" id="pbts_LoansToThirdPartiesTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Loans to third parties consisted
of the following:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="pbts_LoansToThirdPartiesTextBlock-c0_cont_3" id="pbts_LoansToThirdPartiesTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfDebtTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfDebtTableTextBlock"><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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    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#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)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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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"><b>&#160;</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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>

</div><ix:continuation id="_InvestmentTextBlock-c0_cont_2"><ix:continuation id="_ScheduleOfOtherNonoperatingIncomeByComponentTextBlock-c0_cont_1"><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; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</span></td> <td> <ix:footnote id="ix_5_footnote" xml:lang="en-US"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2022, the Company invested $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedBalancePrincipalAmount" scale="0" unitRef="usd">434,960</ix:nonFraction> (RMB<ix:nonFraction contextRef="c2" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedBalancePrincipalAmount" scale="6" unitRef="cny">3.0</ix:nonFraction> million) cash and issued <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquityOtherShares" scale="0" unitRef="shares">5,756,481</ix:nonFraction> shares (equivalent to $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherCashEquivalentsAtCarryingValue" scale="0" unitRef="usd">1,844,377</ix:nonFraction>) for <ix:nonFraction contextRef="c2" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">5.0</ix:nonFraction>% equity interest in Shenzhen Chenbao Information service Co., Ltd. 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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

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consist of the following:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 7pt">&#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="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="text-align: justify">&#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>
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</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; text-indent: 0.5in">Depreciation and amortization
expense for the years ended December 31, 2022, 2021 and 2020 amounted to $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherDepreciationAndAmortization" scale="0" unitRef="usd">359,344</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherDepreciationAndAmortization" scale="0" unitRef="usd">324,367</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherDepreciationAndAmortization" scale="0" unitRef="usd">310,845</ix:nonFraction>, respectively.&#160;The Company
capitalized development costs related to its core supporting modules of the global trade applications and solutions incurred during the
application development stage. The amortization expense for the years ended December 31, 2022, 2021 and 2020 totaled $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdjustmentForAmortization" scale="0" unitRef="usd">1,803,853</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdjustmentForAmortization" scale="0" unitRef="usd">1,692,352</ix:nonFraction>
and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdjustmentForAmortization" scale="0" unitRef="usd">1,140,727</ix:nonFraction>, respectively. As of December 31, 2022, buildings with net book value amounted to $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="pbts:BookValueAmount" scale="0" unitRef="usd">4,184,190</ix:nonFraction> were pledged for obtaining
various of loans (See Note 9).&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 7pt">&#160;</span></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; text-indent: 0.5in">The estimated amortization
of capitalized development cost is as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock"><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: justify">2024</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">2026</td><td>&#160;</td>
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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"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO 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><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 0; text-align: justify"><b>Note 8 &#8212; Related party balances and transactions</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</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 0; text-align: justify"><span style="text-decoration:underline">Related party transactions and balances</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="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="pbts:ScheduleOfPrepaidExpenseRelatedPartiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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  <tr style="vertical-align: top; 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: 10pt">Guangzhou Jiatu Culture Media Co., Ltd. (formerly as Guangzhou Powerbridge Blockchain Co., Ltd.)</span></td>
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    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ban Lor</span></td>
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  <tr style="vertical-align: top; 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: 10pt">Stewart Lor</span></td>
    <td style="text-align: justify">&#160;</td>
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    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hong Yu</span></td>
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    <td style="padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ling Lor</span></td>
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</div><div>

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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due from related parties:</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" continuedAt="pbts_ScheduleOfDueFromRelatedPartiesTableTextBlock-c0_cont_1" escape="true" name="pbts:ScheduleOfDueFromRelatedPartiesTableTextBlock"><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">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_7" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_6"><ix:continuation id="pbts_ScheduleOfDueFromRelatedPartiesTableTextBlock-c0_cont_2"><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: 0px"></td> <td style="width: 27px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td> <td style="text-align: justify"><ix:footnote id="ix_8_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From time to time, the Company advances funds to senior management for business purpose.</span></ix:footnote></td></tr> </table><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 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>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 8 &#8212; Related party balances and transactions</b>
(continued)</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="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_8" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_7"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">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="text-align: justify">&#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>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_10" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_9"><ix:continuation id="pbts_ScheduleOfDueToRelatedPartyTableTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1) <ix:footnote id="ix_9_footnote" xml:lang="en-US">The above balances represent unpaid loan and
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_12" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_11"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfRelatedPartyTransactionsTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfRelatedPartyTransactionsTableTextBlock"><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: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#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>
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    <td style="width: 76%; text-align: justify; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Guangzhou Guangrui <sup>(1)</sup></span></td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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</table><p style="margin: 0">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>


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</div><div>

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</div><div>

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    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
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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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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-152">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">Interest income</td><td>&#160;</td>
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    <td style="text-align: left">$</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">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-154">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">Interest income</td><td>&#160;</td>
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    <td style="text-align: left">$</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">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-156">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Shanghai Stamp Technology Co., Ltd.</td><td>&#160;</td>
    <td style="text-align: left">Interest income</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-158">-</div></td><td style="text-align: left">&#160;</td></tr>
  </table><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="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_16" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_15"><ix:continuation continuedAt="pbts_ScheduleOfPurchaseFromRelatedPartiesTableTextBlock-c0_cont_2" id="pbts_ScheduleOfPurchaseFromRelatedPartiesTableTextBlock-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="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left">(1)</td><td style="text-align: justify"><ix:footnote id="ix_11_footnote" xml:lang="en-US">As the disposal of Shantou Hongrui in Febuary 2022, Guangzhou
Guangrui was no longer considered as a related party.</ix:footnote></td>
</tr></table><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="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_16"><ix:continuation id="pbts_ScheduleOfPurchaseFromRelatedPartiesTableTextBlock-c0_cont_2"><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">(2)</td><td style="text-align: justify"><ix:footnote id="ix_12_footnote" xml:lang="en-US">On June 2, 2022, the Company&#8217;s CFO sold the equity
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</tr></table></ix:continuation></ix:continuation><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: 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">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- 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: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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="_ShortTermDebtTextBlock-c0_cont_1" escape="true" name="us-gaap:ShortTermDebtTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 9 &#8212; Bank loans </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="_ShortTermDebtTextBlock-c0_cont_2" id="_ShortTermDebtTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Outstanding balance of short-term
bank loans consisted of the following:</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="_ShortTermDebtTextBlock-c0_cont_3" id="_ShortTermDebtTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfShortTermDebtTextBlock"><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: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <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="c193" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LoansPayableToBankCurrent" scale="0" unitRef="usd">2,174,796</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; ">
    <td style="text-align: justify">Loan from Bank of China</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c195" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LoansPayableToBankCurrent" scale="0" unitRef="usd">434,959</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="c196" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LoansPayableToBankCurrent" scale="0" unitRef="usd">470,765</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: justify; padding-bottom: 1.5pt">Loan from Guangfa Bank</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-159">-</div></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="text-align: justify; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_ShortTermDebtTextBlock-c0_cont_4" id="_ShortTermDebtTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 4, 2021, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $<ix:nonFraction contextRef="c173" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LoansPayable" scale="0" unitRef="usd">880,239</ix:nonFraction> for a term of <ix:nonNumeric contextRef="c174" format="ixt-sec:durwordsen" name="us-gaap:DebtInstrumentTerm">one year</ix:nonNumeric> and at a fixed annual
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</div><div>

</div><ix:continuation continuedAt="_ShortTermDebtTextBlock-c0_cont_5" id="_ShortTermDebtTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 11, 2021, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $<ix:nonFraction contextRef="c175" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LoansPayable" scale="0" unitRef="usd">688,979</ix:nonFraction> for a term of <ix:nonNumeric contextRef="c176" format="ixt-sec:durwordsen" name="us-gaap:DebtInstrumentTerm">one year</ix:nonNumeric> and at a fixed annual
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</div><div>

</div><ix:continuation continuedAt="_ShortTermDebtTextBlock-c0_cont_6" id="_ShortTermDebtTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 28, 2022, Powerbridge
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fixed assets as the collateral to secure the loan. The loan was fully repaid upon maturity subsequently.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_ShortTermDebtTextBlock-c0_cont_7" id="_ShortTermDebtTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 16, 2022, Powerbridge
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</div><div>

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rate of <ix:nonFraction contextRef="c182" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateStatedPercentage" scale="-2" unitRef="pure">4.50</ix:nonFraction>%. The bank loan was guaranteed by Mr. Ban Lor. The loan was fully repaid upon maturity.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_ShortTermDebtTextBlock-c0_cont_10" id="_ShortTermDebtTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 15, 2022, Powerbridge
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</div><div>

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</div><div>

</div><ix:continuation id="_ShortTermDebtTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the years ended December
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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; 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-top: 0pt; margin-bottom: 0pt; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_1" escape="true" name="us-gaap:LesseeOperatingLeasesTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 10 &#8212; Lease</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_2" id="_LesseeOperatingLeasesTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>The Company
has several operating leases for offices. The Company&#8217;s lease agreements do not contain any material residual value guarantees or
material restrictive covenants.</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="_LesseeOperatingLeasesTextBlock-c0_cont_3" id="_LesseeOperatingLeasesTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Effective
January 1, 2022, the Company adopted the new lease accounting standard using a modified retrospective transition method which allowed
the Company not to recast comparative periods presented in its consolidated financial statements. In addition, the Company elected the
package of practical expedients, which allowed the Company to not reassess whether any existing contracts contain a lease, to not reassess
historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected
the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company combines the lease and
non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of
operating lease ROU assets and corresponding operating lease liabilities as disclosed below and had no impact on accumulated deficit as
of January 1, 2022. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining
lease payments over the lease term.</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="_LesseeOperatingLeasesTextBlock-c0_cont_4" id="_LesseeOperatingLeasesTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Total lease
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</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_5" id="_LesseeOperatingLeasesTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Supplemental balance sheet information
related to operating leases was as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_6" id="_LesseeOperatingLeasesTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:OperatingLeaseLeaseIncomeTableTextBlock"><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="font-weight: bold; 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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  <tr style="vertical-align: bottom; ">
    <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></tr>
  <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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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_7" id="_LesseeOperatingLeasesTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>The weighted average remaining
lease terms and discount rates for all of operating leases were as follows as of December 31, 2022:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_8" id="_LesseeOperatingLeasesTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" escape="true" name="pbts:ScheduleOfWeightedAverageLeaseTermAndDiscountRatesTableTextBlock"><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: 89%">
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
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    <td style="width: 1%">&#160;</td>
    <td style="width: 10%">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
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  <tr style="vertical-align: bottom">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_LesseeOperatingLeasesTextBlock-c0_cont_9" id="_LesseeOperatingLeasesTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>The following is a schedule of
maturities of lease liabilities as of December 31, 2022:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_LesseeOperatingLeasesTextBlock-c0_cont_9"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:LesseeOperatingLeaseLiabilityMaturityTableTextBlock"><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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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">2024</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; ">
    <td style="text-align: left; padding-bottom: 4pt">Present value of lease liabilities</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"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiability" scale="0" unitRef="cny">193,579</ix:nonFraction></td><td style="padding-bottom: 4pt; 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; 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><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 -->26<!-- 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: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED 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><ix:nonNumeric contextRef="c0" continuedAt="_DebtDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:DebtDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 11 &#8212; Convertible Notes</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DebtDisclosureTextBlock-c0_cont_2" id="_DebtDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">On April 9, 2021, the Company
entered into certain securities purchase agreement with YA II PN, LTD. (&#8220;YA&#8221;), pursuant to which the Investor purchases convertible
notes (the &#8220;Notes&#8221;) in the principal amount of US$<ix:nonFraction contextRef="c199" decimals="0" format="ixt:num-dot-decimal" name="pbts:PrincipalAmount" scale="0" unitRef="usd">7,000,000</ix:nonFraction>, which shall be convertible into the Company&#8217;s ordinary
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90% of the lowest daily VWAP (Volume-Weighted Average Price) during the 10 consecutive trading days immediately preceding the conversion
date or other date of determination, but not lower than the floor price of US$1.50 per ordinary share. The principal will become due and
payable 12 months from the date of closing (the &#8220;Maturity Date&#8221;) and bears an annual interest rate of 6% unless earlier converted
or redeemed by the Company. At any time before the Maturity Date, YA may convert the Notes at its option into ordinary shares at the conversion
price.</ix:nonNumeric></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="_DebtDisclosureTextBlock-c0_cont_3" id="_DebtDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><ix:continuation id="pbts_ConvertibleNoteDescription-c0_cont_1">On August 7, 2021, the Company
entered into an amendment (the &#8220;Closing Statement&#8221;) to the securities purchase agreement initially entered into with YA on
April 9, 2021 (the &#8220;Purchase Agreement&#8221;). Pursuant to the Purchase Agreement, YA agreed to purchase convertible notes (the
&#8220;Notes&#8221;) in the aggregate principal amount of US$7,000,000 (the &#8220;Principal&#8221;), which shall be convertible into
the Company&#8217;s ordinary shares par value $0.00166667 per share, and a warrant (the &#8220;Warrant&#8221;) to purchase 571,429 Ordinary
Shares (the &#8220;Offering&#8221;), for gross proceeds of approximately US$6,790,000.</ix:continuation> The first closing of the offer and sale of the
first Note (the &#8220;First Note&#8221;) in the principal amount of $<ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="pbts:PrincipalAmount" scale="0" unitRef="usd">4,000,000</ix:nonFraction> was completed on April 9, 2021. Pursuant to the Closing
Statement, the Company and YA agreed that, among other thing, (i) the Principal shall be increased to US$<ix:nonFraction contextRef="c201" decimals="0" format="ixt:num-dot-decimal" name="pbts:PrincipalAmount" scale="0" unitRef="usd">8,000,000</ix:nonFraction>; (ii) the principal
amount of the second Note (the &#8220;Second Note&#8221;) is reduced from $<ix:nonFraction contextRef="c202" decimals="0" format="ixt:num-dot-decimal" name="pbts:PrincipalAmount" scale="0" unitRef="usd">3,000,000</ix:nonFraction> to $<ix:nonFraction contextRef="c203" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInRollingYearFourAndFive" scale="0" unitRef="usd">2,000,000</ix:nonFraction>; the closing of the second Note in
the principal amount of $<ix:nonFraction contextRef="c204" decimals="0" format="ixt:num-dot-decimal" name="pbts:PrincipalAmount" scale="0" unitRef="usd">2,000,000</ix:nonFraction> was completed on August 9, 2021. <ix:nonNumeric contextRef="c200" name="pbts:ConvertibleNoteDescription">(iii) the number of ordinary shares to be issued pursuant to the Warrant
shall be increased from 571,429 to 653,061; and (iv) promptly after the Securities and Exchange Commission (the &#8220;SEC&#8221;) declares
effective a registration statement to be filed by the Company pursuant to a registration rights agreement (the &#8220;Registration Rights
Agreement&#8221;), YA agrees to purchase the third Note (the &#8220;Third Note&#8221;) in the principal amount of $2,000,000, which shall
have identical terms as those of the Second Note.</ix:nonNumeric> Except as expressly amended by the Closing Statement, the Second Note has essentially
identical terms to the First Note.</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="_DebtDisclosureTextBlock-c0_cont_4" id="_DebtDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">On September 1, 2022, the Company
entered into a securities purchase agreement with Streeterville Capital, LLC (&#8220;Streeterville&#8221;), pursuant to which the Company
issued the Investor an unsecured promissory note on September 1, 2022 in the original principal amount of $<ix:nonFraction contextRef="c205" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregatePrincipalAmount" scale="0" unitRef="usd">8,640,000</ix:nonFraction> (the &#8220;Note&#8221;),
convertible into ordinary shares, par value $<ix:nonFraction contextRef="c206" decimals="8" format="ixt:num-dot-decimal" name="pbts:OrdinarySharesParValue" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, of the Company, for $<ix:nonFraction contextRef="c206" decimals="0" format="ixt:num-dot-decimal" name="pbts:GrossProceeds" scale="0" unitRef="usd">8,000,000</ix:nonFraction> in gross proceeds. The transaction contemplated
by the Purchase Agreement closed on September 1, 2022. The Note bears interest at a rate of <ix:nonFraction contextRef="c205" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:InvestmentInterestRate" scale="-2" unitRef="pure">6</ix:nonFraction>% per annum compounding daily. All outstanding
principal and accrued interest on the Note will become due and payable twelve months after the purchase price of the Note is delivered
by Purchaser to the Company (the &#8220;Purchase Price Date&#8221;). The Note includes an original issue discount of $<ix:nonFraction contextRef="c206" decimals="0" format="ixt:num-dot-decimal" name="pbts:OriginalIssueDiscount" scale="0" unitRef="usd">640,000</ix:nonFraction> along with
$<ix:nonFraction contextRef="c206" decimals="0" format="ixt:num-dot-decimal" name="pbts:UptownsFees" scale="0" unitRef="usd">20,000</ix:nonFraction> for Streeterville&#8217;s fees, costs and other transaction expenses incurred in connection with the purchase and sale of the
Note. The Company may prepay all or a portion of the Note at any time by paying <ix:nonFraction contextRef="c206" decimals="2" format="ixt:num-dot-decimal" name="pbts:OutstandingBalanceElectedForPrepayment" scale="-2" unitRef="pure">120</ix:nonFraction>% of the outstanding balance elected for pre-payment.
&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p></ix:continuation><div>

</div><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: 157; 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 -->27<!-- 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="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED 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"><b>Note 11 &#8212; Convertible Notes</b> (continued)</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="_DebtDisclosureTextBlock-c0_cont_5" id="_DebtDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Conversion of convertible notes </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DebtDisclosureTextBlock-c0_cont_6" id="_DebtDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December
31, 2022, YA delivered conversion notice for convertible notes in an aggregate of principle of $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregatePrincipalAmount" scale="0" unitRef="usd">2,000,000</ix:nonFraction> to the Company and the Company
issued an aggregate of <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOfRestrictedOrdinaryShares" scale="0" unitRef="shares">5,929,838</ix:nonFraction> ordinary shares, par value $<ix:nonFraction contextRef="c2" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, of the Company, to YA. The fair value of the conversion
note was assessed at $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtConversionConvertedInstrumentAmount1" scale="0" unitRef="usd">2,261,270</ix:nonFraction> upon conversion based on the binomial model assessed by the independent valuation firm.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DebtDisclosureTextBlock-c0_cont_7" id="_DebtDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has elected
to recognize the convertible note at fair value and therefore there was no further evaluation of embedded features for bifurcation.
The Company engaged third party valuation firm to perform the valuation of convertible note. The fair value of the convertible note is calculated using the binomial tree model based on probability of remaining as straight debt using discounted cash flow with
the following assumptions</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DebtDisclosureTextBlock-c0_cont_8" id="_DebtDisclosureTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" continuedAt="pbts_ScheduleOfConversionOfConvertibleNoteTableTextBlock-c0_cont_1" escape="true" name="pbts:ScheduleOfConversionOfConvertibleNoteTableTextBlock"><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>
    <td>&#160;</td>
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 2022-May 25,<br/>
 2022</b></span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk-free interest rate</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="width: 88%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected volatility</span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%">&#160;</td>
    <td style="white-space: nowrap; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c210" decimals="4" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionExpectedVolatilityRate" scale="-2" unitRef="pure">80.48</ix:nonFraction>-<ix:nonFraction contextRef="c211" decimals="4" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionExpectedVolatilityRate" scale="-2" unitRef="pure">143.72</ix:nonFraction></span></td>
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  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c210" decimals="2" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionExpectedDividendRate" scale="-2" unitRef="pure"><ix:nonFraction contextRef="c211" decimals="2" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionExpectedDividendRate" scale="-2" unitRef="pure">0</ix:nonFraction></ix:nonFraction></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</span></td></tr>
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    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
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    <td>&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_DebtDisclosureTextBlock-c0_cont_9" id="_DebtDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December
31, 2022, Streeterville delivered conversion notice for convertible notes in an aggregate of principle of $<ix:nonFraction contextRef="c207" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOrdinarySharesIssuedAndOutstanding" scale="0" unitRef="shares">1,250,310</ix:nonFraction> to the Company and
the Company issued an aggregate of <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOrdinarySharesIssuedAndOutstanding" scale="0" unitRef="shares">13,981,758</ix:nonFraction> ordinary shares, par value $<ix:nonFraction contextRef="c208" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, of the Company, to Streeterville. The
fair value of the conversion note was assessed at $<ix:nonFraction contextRef="c209" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtConversionConvertedInstrumentAmount1" scale="0" unitRef="usd">1,534,654</ix:nonFraction> upon conversion based on the binomial model assessed by the independent valuation
firm.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DebtDisclosureTextBlock-c0_cont_10" id="_DebtDisclosureTextBlock-c0_cont_9"><ix:continuation id="pbts_ScheduleOfConversionOfConvertibleNoteTableTextBlock-c0_cont_1"><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>
    <td>&#160;</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: 10pt"><b>November 8,<br/>
2022-December<br/>
 24, 2022</b></span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk-free interest rate</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c212" decimals="4" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionRiskFreeInterestRate" scale="-2" unitRef="pure">4.66</ix:nonFraction>-<ix:nonFraction contextRef="c213" decimals="4" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionRiskFreeInterestRate" scale="-2" unitRef="pure">4.72</ix:nonFraction></span></td>
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td style="text-indent: 5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Discount rate</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c212" decimals="2" name="pbts:DiscountRate" scale="-2" unitRef="pure">1137</ix:nonFraction>-<ix:nonFraction contextRef="c213" decimals="4" format="ixt:num-dot-decimal" name="pbts:DiscountRate" scale="-2" unitRef="pure">11.72</ix:nonFraction></span></td>
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    <td style="width: 88%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected volatility</span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%">&#160;</td>
    <td style="white-space: nowrap; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c212" decimals="4" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionExpectedVolatilityRate" scale="-2" unitRef="pure">99.91</ix:nonFraction>-<ix:nonFraction contextRef="c213" decimals="4" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionExpectedVolatilityRate" scale="-2" unitRef="pure">103.93</ix:nonFraction></span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expected dividend yield</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c212" decimals="2" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionExpectedDividendRate" scale="-2" unitRef="pure"><ix:nonFraction contextRef="c213" decimals="2" format="ixt:num-dot-decimal" name="pbts:FairValueAssumptionExpectedDividendRate" scale="-2" unitRef="pure">0</ix:nonFraction></ix:nonFraction></span></td>
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    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="white-space: nowrap; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquityFairValueAdjustment" scale="0" unitRef="usd"><ix:nonFraction contextRef="c213" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquityFairValueAdjustment" scale="0" unitRef="usd">1,534,654</ix:nonFraction></ix:nonFraction></span></td>
    <td>&#160;</td></tr>
  </table><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="_DebtDisclosureTextBlock-c0_cont_11" id="_DebtDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The convertible notes are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by
little or no market activity and reflect the Group&#8217;s own assumptions in measuring fair value. Significant inputs used in
developing the fair value of the convertible notes include time to maturity, risk-free interest rate, straight debt discount rate,
probability to convert and expected timing of conversion.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DebtDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the years ended December 31, 2022, 2021 and 2020, the Company recognized
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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"></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: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 12 &#8212; Taxes</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_2" id="_IncomeTaxDisclosureTextBlock-c0_cont_1"><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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  </table><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="_IncomeTaxDisclosureTextBlock-c0_cont_3" id="_IncomeTaxDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Cayman Islands</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</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 0; text-align: justify; text-indent: 0.5in">Powerbridge was incorporated
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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 0; text-align: justify"><i>Hong Kong</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</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 0; text-align: justify; text-indent: 0.5in">Powerbridge HK is established
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withholding taxes in Hong Kong on remittance of dividends.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></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 0; text-align: justify"><i>PRC</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</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 0; text-align: justify; text-indent: 0.5in">Powerbridge Zhuhai is governed
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</div><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 0; text-align: justify; text-indent: 0.5in">The impact of the preferred
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31, 2022, 2021 and 2020, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</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 0; text-align: justify; text-indent: 0.5in">Significant components of
the provision for income taxes are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_11" id="_IncomeTaxDisclosureTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <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 style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</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="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <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>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CurrentIncomeTaxExpenseBenefit" scale="0" sign="-" unitRef="usd">563,650</ix:nonFraction></td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 4pt">Total income tax benefit</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="pbts:TotalIncomeTaxbenefitsExpense" scale="0" unitRef="usd">999,391</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><div>

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

</div><!-- Field: Page; Sequence: 159; 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 -->29<!-- 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; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED 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"><b>Note 12 &#8212; Taxes </b>(continued)</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><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: 48px">&#160;</td>
    <td style="width: 24px"><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"><span style="text-decoration:underline">Income tax - continued</span></span></td></tr>
  </table><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><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_12" id="_IncomeTaxDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table reconciles
China statutory rates to the Company&#8217;s effective tax rate:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</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="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <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 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>
    <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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</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 0; text-align: justify; text-indent: 0.5in">Deferred income taxes reflect
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_15" id="_IncomeTaxDisclosureTextBlock-c0_cont_14"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>

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of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences
become deductible. Management considers the cumulative earnings and projected future taxable income in making this assessment. Recovery
of substantially all of the group&#8217;s deferred tax assets is dependent upon the generation of future income, exclusive of reversing
taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_17" id="_IncomeTaxDisclosureTextBlock-c0_cont_16"><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: 48px">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Value added tax</span></span></td></tr>
  </table><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="_IncomeTaxDisclosureTextBlock-c0_cont_18" id="_IncomeTaxDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Enterprises who sell goods
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credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company&#8217;s
finished products can be used to offset the VAT due on sales of the finished products and services. Powerbridge Zhuhai obtained a VAT
preferential status for its technology development business, accordingly, the certain Company&#8217;s technology development business
is exempted from VAT.</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: 160; Value: 1 --><div>
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    </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"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 12 &#8212; Taxes </b>(continued)</p><div>

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

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_19" id="_IncomeTaxDisclosureTextBlock-c0_cont_18"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 48px">&#160;</td>
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</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 0; text-align: justify; text-indent: 0.5in">Taxes payable consists of
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_21" id="_IncomeTaxDisclosureTextBlock-c0_cont_20"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDividendsPayableTextBlock"><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">
    <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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</div><div>

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</div><div>

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to challenges from various PRC taxing authorities regarding the amounts of taxes due, although the Company&#8217;s management believes
the Company has paid or accrued for all taxes owed by the Company. As of December 31, 2022 and 2021, the Company had accrued (before adjustment)
total income tax liabilities of $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxLiabilitiesTaxDeferredIncome" scale="0" unitRef="usd">550,602</ix:nonFraction> and $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxLiabilitiesTaxDeferredIncome" scale="0" unitRef="cny">594,026</ix:nonFraction>, respectively. According to PRC taxation regulation and administrative practice
and procedures, the statute of limitation on tax authority&#8217;s audit or examination of previously filed tax returns expires three
years from the date they were filed. The Company also obtained a written statement from the local tax authority that no additional taxes
are due as of December 31, 2022. Based on these facts, the Company reversed the accrued tax liabilities in the total amount of $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccruedLiabilitiesAndOtherLiabilities" scale="0" unitRef="usd">550,602</ix:nonFraction>
(or RMB<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccruedLiabilitiesAndOtherLiabilities" scale="0" unitRef="cny">3,798,484</ix:nonFraction>) relating to the tax liabilities accrued for the period from fiscal 2016 to fiscal 2018, resulting in the decrease of
accrued income tax liabilities from $<ix:nonFraction contextRef="c214" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxExaminationInterestAccrued" scale="0" unitRef="usd">550,602</ix:nonFraction> to $<span style="-sec-ix-hidden: hidden-fact-165">nil</span> as of 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 id="_IncomeTaxDisclosureTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company evaluates each
uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the
unrecognized benefits associated with the tax positions. As of December 31, 2022 and 2021, the Company did not have any significant unrecognized
uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the
years ended December 31, 2022,2021 and 2020. The Company also does not anticipate any significant increases or decreases in unrecognized
tax benefits in the next 12 months from December 31, 2022.</p></ix:continuation><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><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 0; text-align: justify"><b>Note 13 &#8212; Equity</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</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 0; text-align: justify"><span style="text-decoration:underline">Ordinary Shares</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Powerbridge was established
under the laws of Cayman Islands on July 27, 2018. The original authorized number of Ordinary Shares was <ix:nonFraction contextRef="c38" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">500,000,000</ix:nonFraction> shares with a par
value of $<ix:nonFraction contextRef="c38" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.0001</ix:nonFraction> per share. <ix:nonNumeric contextRef="c216" name="us-gaap:StockholdersEquityReverseStockSplit">On August 18, 2018, in order to optimize the Company&#8217;s share capital structure, the board of directors
approved a reverse stock split of the Company&#8217;s authorized number of Ordinary Shares at a ratio of 10-1.</ix:nonNumeric> After the reverse stock
split, the Company&#8217;s authorized number of Ordinary Shares became <ix:nonFraction contextRef="c217" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">50,000,000</ix:nonFraction> shares with par value of $<ix:nonFraction contextRef="c217" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction> per share and <ix:nonFraction contextRef="c217" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">11,508,747</ix:nonFraction>
shares were issued on August 27, 2018 at par value to the original shareholders of Powerbridge Zhuhai, the equivalent to share capital
of $<ix:nonFraction contextRef="c218" decimals="0" format="ixt:num-dot-decimal" name="pbts:ShareCapital" scale="0" unitRef="usd">11,509</ix:nonFraction>. On February 10, 2019, the board of directors further approved a reverse stock split of the Company&#8217;s authorized number
of Ordinary Shares at a ratio of 1-0.6. After the reverse stock split, the Company&#8217;s authorized number of Ordinary Shares was <ix:nonFraction contextRef="c219" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">30,000,000</ix:nonFraction>
shares with par value of $<ix:nonFraction contextRef="c219" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share and <ix:nonFraction contextRef="c219" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c219" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares">6,905,248</ix:nonFraction></ix:nonFraction> shares were issued and outstanding immediately after the reserve stock split.
The Company believes it is appropriate to reflect these share issuances as nominal share issuance on a retroactive basis similar to stock
split pursuant to ASC 260. The Company has retroactively adjusted all shares and per share data for all the periods presented.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</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 0; text-align: justify; text-indent: 0.5in">On September 30, 2020, the
Company held its 2020 special general meeting of shareholders (the &#8220;Meeting&#8221;). At the Meeting, the Company&#8217;s shareholders
approved the Company&#8217;s amended and restated Memorandum and Articles of Association (&#8220;A&amp;R M&amp;A&#8221;) to increase the
authorized share capital. <ix:nonNumeric contextRef="c220" name="us-gaap:EquityMethodInvestmentDescriptionOfPrincipalActivities">As a result, the Company&#8217;s authorized share capital was $500,000 divided into 300,000,000 shares of a par
value of US$0.00166667 each, with an increase of an additional 270,000,000 shares of a par value of US$0.00166667 each.</ix:nonNumeric></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</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 0; text-align: justify; text-indent: 0.5in">On December 5, 2022, the
Company held its 2022 special general meeting of shareholders. At the Meeting, the Company&#8217;s shareholders approved an
amendment to the Company&#8217;s amended and restated Memorandum and Articles of Association (&#8220;A&amp;R M&amp;A&#8221;) to
increase the authorized share capital. As a result, the Company&#8217;s authorized share capital is $<ix:nonFraction contextRef="c221" decimals="0" format="ixt:num-dot-decimal" name="pbts:ShareCapital" scale="0" unitRef="usd">16,666,700</ix:nonFraction> divided into
<ix:nonFraction contextRef="c221" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquityNoteChangesInCapitalStructureSubsequentChangesToNumberOfCommonShares" scale="0" unitRef="shares">10,000,000,000</ix:nonFraction> shares of a par value of US$<ix:nonFraction contextRef="c222" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> each, with an increase of an additional <ix:nonFraction contextRef="c223" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquityOtherShares" scale="0" unitRef="shares">9,700,000,000</ix:nonFraction> shares of a par value of
US$<ix:nonFraction contextRef="c222" decimals="8" format="ixt:num-dot-decimal" name="pbts:AdditionalParValue" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> each.</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company had <ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">285,005,647</ix:nonFraction>
and <ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares">56,794,773</ix:nonFraction> ordinary shares issued and outstanding as of December 31, 2022 and 2021, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><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"></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">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- 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"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 13 &#8212; Equity (</b>continued)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">Ordinary Shares - continued</span></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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6"><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: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IPO</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#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; text-indent: 0.5in">On April 4, 2019, <ix:nonNumeric contextRef="c224" name="pbts:InitialPublicOfferingDescription">the Company
consummated its initial public offering (&#8220;IPO&#8221;) of 2,012,500 Ordinary Shares at a price of $5.00 per shares including the
exercise in full of the underwriters&#8217; over-allotment option of 262,500 ordinary shares at IPO price of $5.00 per share. The gross proceeds
from the IPO were $10,062,500 and the net proceeds was $8,021,987. As a result of the IPO, the Ordinary Shares now trade on the Nasdaq
Capital Market under the symbol &#8220;PBTS.&#8221;</ix:nonNumeric></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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8"><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: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Public Offering Warrants</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</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 0; text-align: justify; text-indent: 0.5in">In connection with the IPO
on April 4, 2019, <ix:nonNumeric contextRef="c225" name="pbts:PublicOfferingWarrantsDescription">the Company issued warrants totaling 122,500 units to the placement agents (the &#8220;Public Offering Warrants&#8221;).
The warrants carry a term of five years and shall be exercisable at $5.50 per share. Management determined that these warrants are equity
instruments because the warrants are both a) indexed to its own stock; and b) classified in shareholders&#8217; equity. The warrants were
recorded at their fair value on the date of grant as a component of shareholders&#8217; equity. No warrants were exercised for the year
ended December 31, 2020 and 2019. As of December 31, 2022 and 2021, the total number of warrants outstanding was 122,500 with weighted
average remaining life of 1.24 years and 2.25 years, respectively. No warrants were exercised as of December 31, 2022 and 2021. The fair
value of this Public Offering Warrants was $356,200, which was considered a direct cost of IPO and included in additional paid-in capital.
The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value
of underlying share of $5.00, risk free rate of 2.2%; expected term of 5 years; exercise price of the warrants of $5.5, volatility of
71.9%; and expected future dividends of nil.</ix:nonNumeric></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10"><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: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ordinary shares issued for consulting services</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</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 0; text-align: justify; text-indent: 0.5in">On September 30, 2019, the
Company entered into a marketing development service agreement with an external consultant for service term of three years and agreed
to <ix:nonFraction contextRef="c226" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualSharesAuthorizedForIssuance" scale="0" unitRef="shares">50,000</ix:nonFraction> restricted shares as compensation. On November 28, 2019, the Company entered into a marketing development service agreement
with another external consultants for service term of three years and agreed to <ix:nonFraction contextRef="c227" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualSharesAuthorizedForIssuance" scale="0" unitRef="shares">57,540</ix:nonFraction> restricted shares as compensation. The aggregated
fair value of those restricted shares was assessed at $<ix:nonFraction contextRef="c227" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OptionContractIndexedToEquitySettlementShareFairValue" scale="0" unitRef="usd">335,469</ix:nonFraction> based on the stock price of contract dates. For the year ended December
31, 2019, the Company recorded a consulting fee expense of $<ix:nonFraction contextRef="c228" decimals="0" format="ixt:num-dot-decimal" name="pbts:ConsultingFeeExpense" scale="0" unitRef="usd">18,430</ix:nonFraction> included in the share-based compensation expense. As of December 31,
2019, there were unrecognized share-based compensation expense related to the restricted shares issued for consulting services amounted
to $<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="pbts:UnrecognizedShareBasedCompensationExpense" scale="0" unitRef="usd">317,039</ix:nonFraction>. As of December 31, 2019, the Company issued <ix:nonFraction contextRef="c228" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WeightedAverageNumberOfSharesRestrictedStock" scale="0" unitRef="shares">50,000</ix:nonFraction> restricted shares and issued the remaining <ix:nonFraction contextRef="c229" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WeightedAverageNumberOfSharesRestrictedStock" scale="0" unitRef="shares">57,450</ix:nonFraction> restricted shares in
January 2020. For the year ended December 31, 2019, the aggregated of <ix:nonFraction contextRef="c230" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WeightedAverageNumberOfSharesRestrictedStock" scale="0" unitRef="shares">107,540</ix:nonFraction> restricted shares was included in the calculation of basic
earning per shares in accordance with ASC 260-10-45-13.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 15, 2020, the Company
signed a consulting agreement with an independent marketing professional with term of one year. Pursuant to the agreement, the Company
agreed to pay total of <ix:nonFraction contextRef="c231" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualSharesIssued" scale="0" unitRef="shares">150,000</ix:nonFraction> ordinary shares as compensation for the services after signing of the agreement. The Company issued <ix:nonFraction contextRef="c232" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WeightedAverageNumberOfSharesRestrictedStock" scale="0" unitRef="shares">150,000</ix:nonFraction>
restricted ordinary shares on April 14, 2020. The fair value of those shares was assessed at approximately $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OptionContractIndexedToEquitySettlementShareFairValue" scale="0" unitRef="usd">332,100</ix:nonFraction> based on the stock
price of contract date. On July 30, 2020, the Company issued <ix:nonFraction contextRef="c233" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualSharesIssued" scale="0" unitRef="shares">24,254</ix:nonFraction> ordinary shares as compensation to an advisory firm for the related
investor relations advisory service during the period ended from January 2020 to July 2020. The fair value of those shares was assessed
at approximately $<ix:nonFraction contextRef="c234" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OptionContractIndexedToEquitySettlementShareFairValue" scale="0" unitRef="usd">65,001</ix:nonFraction> based on the stock price of contract date. On September 26, 2020, the Company signed a consulting agreement with
a third-party consultant. Pursuant to the agreement, the Company agreed to pay a total of <ix:nonFraction contextRef="c235" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualSharesIssued" scale="0" unitRef="shares">100,000</ix:nonFraction> ordinary shares as compensation for
new business segment strategic positioning and planning services. The Company has issued the above <ix:nonFraction contextRef="c236" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">100,000</ix:nonFraction> shares as of December 31, 2021.
On August 17, 2020, the Company signed a consulting agreement with a third-party consultant. Pursuant to the agreement, the Company agreed
to pay a total of <ix:nonFraction contextRef="c237" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualSharesIssued" scale="0" unitRef="shares">10,000</ix:nonFraction> ordinary shares as compensation for services. The Company has issued the above <ix:nonFraction contextRef="c234" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">10,000</ix:nonFraction> shares as of December 31,
2022. On October 19, 2021, the Company issued <ix:nonFraction contextRef="c238" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">21,182</ix:nonFraction> ordinary shares as compensation to an advisory firm for the related investor relations
advisory service. On May 18, 2022, the Company issued <ix:nonFraction contextRef="c239" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">37,255</ix:nonFraction> ordinary shares as compensation to an advisory firm for the related investor
relations advisory service.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p></ix:continuation><div>

</div><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>
    </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"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</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: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 13 &#8212; Equity (</b>continued)</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: 7pt">&#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 0; text-align: justify; text-indent: 0.5in">For the year ended December
31, 2022, 2021 and 2020, the Company recorded a consulting fee expense of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="pbts:ConsultingFeeExpense" scale="0" unitRef="usd">649,122</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="pbts:ConsultingFeeExpense" scale="0" unitRef="usd">461,680</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="pbts:ConsultingFeeExpense" scale="0" unitRef="usd">487,347</ix:nonFraction> included in the share-based
compensation expense. As of December 31, 2022 and 2021, there were unrecognized share-based compensation expense related to the restricted
shares issued for consulting services amounted to $<ix:nonFraction contextRef="c22" decimals="0" format="ixt:num-dot-decimal" name="pbts:UnrecognizedShareBasedCompensationExpense" scale="0" unitRef="usd">52,249</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="pbts:UnrecognizedShareBasedCompensationExpense" scale="0" unitRef="usd">689,807</ix:nonFraction>.</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: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14"><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: 48px">&#160;</td>
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  </table><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: 7pt">&#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 0; text-align: justify; text-indent: 0.5in">On June 16, 2022, the board
of directors proposed to modify the Company&#8217;s Amended 2018 Stock Option Plan), by supplementing various clauses in relation to the
grant of Restricted Shares and Restricted Share Units to the employees, Directors and consultants of the Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#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 0; text-align: justify; text-indent: 0.5in">On July 15, 2022 the Company
signed six consulting agreements with six third-party consultants with term of three years. Pursuant to the agreements, the Company agreed
to pay total of <ix:nonFraction contextRef="c240" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesRestrictedStockAwardGross" scale="0" unitRef="shares">12,000,000</ix:nonFraction> RSUs (representing <ix:nonFraction contextRef="c241" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">1</ix:nonFraction> ordinary shares of the Company, with par value US$<ix:nonFraction contextRef="c241" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share) as compensation
for the services after signing of the agreements. The Company issued <ix:nonFraction contextRef="c242" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtConversionConvertedInstrumentWarrantsOrOptionsIssued1" scale="0" unitRef="shares">12,000,000</ix:nonFraction> RSUs on July 22, 2022. The fair value of those shares
was assessed at $<ix:nonFraction contextRef="c243" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OptionContractIndexedToEquitySettlementShareFairValue" scale="0" unitRef="usd">13,080,000</ix:nonFraction> based on the stock price of contract date. For the year ended December 31, 2022, the Company recorded a consulting
fee expense of $<ix:nonFraction contextRef="c244" decimals="0" format="ixt:num-dot-decimal" name="pbts:ConsultingFeeExpense" scale="0" unitRef="usd">1,998,333</ix:nonFraction> included in the share-based compensation expense. As of December 31, 2022, there were unrecognized share-based
compensation expense related to RSUs issued for consulting services amounted to $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="pbts:UnrecognizedShareBasedCompensationExpense" scale="0" unitRef="usd">11,081,667</ix:nonFraction>.</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">2018 Stock option plan</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#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 0; text-align: justify; text-indent: 0.5in">On August 18, 2018 and further
amended on February 10, 2019, the Board of Directors (&#8220;Board&#8221;) approved an amended the 2018 Stock Option Plan (the &#8220;2018
Plan&#8221;).&#160; The Plan provides for discretionary grants of stock options to key employees, directors and consultants of the Company.
The purpose of the Plan is to attract and retain the best available personnel and to promote the success of the Company&#8217;s business.
<ix:nonNumeric contextRef="c245" name="pbts:OrdinarySharesReservedDescription">The Board authorized that the maximum aggregate number of ordinary shares reserved and available pursuant to this Plan shall be the aggregate
of (i) 1,035,787 shares, and (ii) on each January 1, starting with January 1, 2019, an additional number of shares equal to the lesser
of (A) 2% of the outstanding number of ordinary shares (on a fully-diluted basis) on the immediately preceding December 31, and (B) such
lower number of ordinary shares as may be determined by the Committee.</ix:nonNumeric> The Plan shall become effective on the effective date of the Company&#8217;s
contemplated initial public offering is completed, which was on April 4, 2019. The grants under the Plan generally have a maximum contractual
term of <ix:nonNumeric contextRef="c0" format="ixt-sec:durwordsen" name="us-gaap:DeferredCompensationArrangementWithIndividualMaximumContractualTerm1">ten years</ix:nonNumeric> from the date of grant. Stock option awards granted under the plan at the determination of the Board shall be effective
and exercisable after the Company&#8217; completion of IPO of its securities. The terms of individual agreements for various grants under
the Plan will be determined by the Board (or its Compensation Committee) and might contain both service and performance conditions.&#160;The
Company believes the options contain an explicit service condition and a performance condition. On July 2, 2020, the Board approved to
amend the 2018 Plan to adjust that the maximum aggregate number of ordinary shares reserved and available pursuant to the 2018 Plan shall
not at any time exceed <ix:nonFraction contextRef="c246" decimals="2" format="ixt:num-dot-decimal" name="pbts:NumberOfOutstandingPercentage" scale="-2" unitRef="pure">20</ix:nonFraction>% of the total number of outstanding Ordinary Shares at the time of issuance, from time to time. Such amendment
was approved during shareholders&#8217; annual meeting on July 27, 2020.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 4, 2019, the Board
approved to issue <ix:nonFraction contextRef="c247" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtConversionConvertedInstrumentWarrantsOrOptionsIssued1" scale="0" unitRef="shares">1,050,500</ix:nonFraction> stock options to its employees under 2018 stock option plan with exercise price of $<ix:nonFraction contextRef="c247" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">5.0</ix:nonFraction> per share. These options
generally have vesting periods of <ix:nonNumeric contextRef="c248" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1">1</ix:nonNumeric>-<ix:nonNumeric contextRef="c249" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1">3</ix:nonNumeric> years and will expire no later than April 3, 2024. On January 29, 2022, the Board cancelled this
plan.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><ix:nonNumeric contextRef="c247" name="pbts:StockOptionDescription">On April 4, 2019, the Board
approved to issue <ix:nonFraction contextRef="c250" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtConversionConvertedInstrumentWarrantsOrOptionsIssued1" scale="0" unitRef="shares">300,000</ix:nonFraction> stock options to an external consultant under 2018 stock option plan with exercise price of $<ix:nonFraction contextRef="c250" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">3.75</ix:nonFraction> per share.
These options were fully vested upon grant and will expire no later than April 3, 2029.</ix:nonNumeric> On February 18, 2021, the consultant excised <ix:nonFraction contextRef="c251" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesStockOptionsExercised" scale="0" unitRef="shares">58,110</ix:nonFraction>
shares options on a cashless basis. On February 6, 2021, the Company issued <ix:nonFraction contextRef="c252" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">23,954</ix:nonFraction> ordinary shares to the consultant.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_22" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 26, 2021, the Board
approved to issue <ix:nonFraction contextRef="c253" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtConversionConvertedInstrumentWarrantsOrOptionsIssued1" scale="0" unitRef="shares">7,604,964</ix:nonFraction> stock options to its employees under 2018 stock option plan with exercise price of $<ix:nonFraction contextRef="c253" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">1.22</ix:nonFraction> per share. <ix:nonFraction contextRef="c254" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber" scale="0" unitRef="shares">4,014,964</ix:nonFraction>
of these stock options were fully vested upon grant; <ix:nonNumeric contextRef="c255" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1"><span style="-sec-ix-hidden: hidden-fact-188">3</span></ix:nonNumeric>,590,000 of these stock options generally have vesting periods of <ix:nonNumeric contextRef="c257" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1">1</ix:nonNumeric>-3 years. The
options will expire no later than May 26, 2026. On January 26, 2022 the Board approved to amend the exercise price from $<ix:nonFraction contextRef="c258" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">1.22</ix:nonFraction> to $<ix:nonFraction contextRef="c259" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">0.34</ix:nonFraction>
per share, <ix:nonFraction contextRef="c260" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber" scale="0" unitRef="shares">5,809,964</ix:nonFraction> of these stock options were fully vested upon grant; <ix:nonFraction contextRef="c261" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber" scale="0" unitRef="shares">1,795,000</ix:nonFraction> of these stock options was vested in <ix:nonNumeric contextRef="c262" format="ixt-sec:durwordsen" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1">one year</ix:nonNumeric> after
grant. The Company recorded modification expense of $<ix:nonFraction contextRef="c263" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquityClassifiedWrittenCallOptionModificationEquityIssuanceIncreaseDecreaseInEquityAmount" scale="0" unitRef="usd">2,139,555</ix:nonFraction>. On May 16, 2022, the Board further approved to amend the exercise price
from $<ix:nonFraction contextRef="c264" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">0.34</ix:nonFraction> to $<ix:nonFraction contextRef="c265" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">0.265</ix:nonFraction> per share. The Company recorded modification expense of $<ix:nonFraction contextRef="c266" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquityClassifiedWrittenCallOptionModificationEquityIssuanceIncreaseDecreaseInEquityAmount" scale="0" unitRef="usd">137,641</ix:nonFraction>. On December 20, 2022, the Board further approved
to amend the exercise price from $<ix:nonFraction contextRef="c267" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">0.265</ix:nonFraction> to $<ix:nonFraction contextRef="c268" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares">0.084</ix:nonFraction> per share. The Company recorded modification expense of $<ix:nonFraction contextRef="c269" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquityClassifiedWrittenCallOptionModificationEquityIssuanceIncreaseDecreaseInEquityAmount" scale="0" unitRef="usd">206,461</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_23" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of stock options
was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to
make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected
term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based
on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based
on the historical volatility of the Company&#8217;s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to
the contractual life of stock-based compensation instruments. The dividend yield assumption is based on historical patterns and future
expectations for the Company dividends. For the year ended December 31, 2022, assumptions used to estimate the fair value of stock options
on the grant dates are as follows:</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: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_24" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_23"><ix:nonNumeric contextRef="c0" escape="true" name="pbts:ScheduleOfEstimateFairValueOfStockOptionsTableTextBlock"><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)">
    <td style="width: 52%; text-align: left">Risk-free interest rate</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Expected life of the options</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Expected volatility</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c323" decimals="3" format="ixt:num-dot-decimal" name="pbts:ExpectedVolatility" scale="-2" unitRef="pure">96.0</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="c324" decimals="3" format="ixt:num-dot-decimal" name="pbts:ExpectedVolatility" scale="-2" unitRef="pure">96.0</ix:nonFraction></td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Expected dividend yield</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-166">-</div></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">-</td><td style="text-align: left">%</td><td>&#160;</td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></ix:nonNumeric></ix:continuation><div>

</div><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"></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">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->33<!-- 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>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 13 &#8212; Equity (</b>continued)</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_25" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">2018 Stock option plan</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_26" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A summary of activities of
the stock options for the years ended December 31, 2022, 2021 and 2020 is presented as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_27" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_26"><ix:nonNumeric contextRef="c0" escape="true" name="pbts:ScheduleOfStockOptionsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <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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  <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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    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><div style="-sec-ix-hidden: hidden-fact-174">-</div></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="padding-bottom: 1.5pt; text-align: right"><div style="-sec-ix-hidden: hidden-fact-175">-</div></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="padding-bottom: 1.5pt; text-align: right"><div style="-sec-ix-hidden: hidden-fact-176">-</div></td><td style="padding-bottom: 1.5pt; 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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    <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><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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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-183">-</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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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_28" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December&#160;31,
2022, 2021 and 2020, total share-based compensation expenses recognized for the share options granted were $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="0" unitRef="usd">3,336,452</ix:nonFraction>, $<ix:nonFraction contextRef="c270" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="0" unitRef="usd">5,873,566</ix:nonFraction> and
$<ix:nonFraction contextRef="c271" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="0" unitRef="usd">986,629</ix:nonFraction>, respectively. As of December&#160;31, 2022 and 2021, there were $<span style="-sec-ix-hidden: hidden-fact-190">nil</span> and $<ix:nonFraction contextRef="c273" decimals="0" format="ixt:num-dot-decimal" name="pbts:UnrecognizedShareBasedCompensationExpense" scale="0" unitRef="usd">2,415,370</ix:nonFraction> unrecognized share-based compensation expenses
related to the share options granted, respectively.</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_29" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Private placement </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_30" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 24, 2020, Company
closed certain non-broker securities purchase agreements (the &#8220;SPAs&#8221;) with certain &#8220;non-U.S. Persons&#8221; (the &#8220;Purchasers&#8221;)
as defined in Regulation S of the Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;) pursuant to which the Company
agreed to sell an aggregate of <ix:nonFraction contextRef="c274" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOrdinaryShares" scale="0" unitRef="shares">8,800,000</ix:nonFraction> ordinary shares, $<ix:nonFraction contextRef="c275" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> par value per share of the Company (&#8220;Share&#8221;), at a per
share purchase price of $<ix:nonFraction contextRef="c274" decimals="2" format="ixt:num-dot-decimal" name="pbts:PurchasePricePerShare" scale="0" unitRef="usdPershares">2.00</ix:nonFraction> (the &#8220;Offering&#8221;). The net proceeds to the Company from such Offering were $<ix:nonFraction contextRef="c274" decimals="-5" format="ixt:num-dot-decimal" name="pbts:NetProceedsOfferingAmount" scale="6" unitRef="usd">17.6</ix:nonFraction> million.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_31" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 1, 2022, the
Company entered into a securities purchase agreement with White Lion Capital LLC (&#8220;White Lion&#8221;). Pursuant to the agreement,
White Lion shall purchase up to $<ix:nonFraction contextRef="c276" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValuePurchaseOfAssets" scale="6" unitRef="usd">15</ix:nonFraction> million of the Company&#8217;s ordinary shares at the lowest daily VWAP of the Ordinary Shares during
the Valuation Period by <ix:nonFraction contextRef="c276" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOrdinaryShares" scale="0" unitRef="shares">97</ix:nonFraction>%. As of December 31, 2022, the Company issued <ix:nonFraction contextRef="c277" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">22,875,000</ix:nonFraction> ordinary shares and net proceeds was $<ix:nonFraction contextRef="c278" decimals="0" format="ixt:num-dot-decimal" name="pbts:NetProceeds" scale="0" unitRef="usd">3,519,202</ix:nonFraction>. In
2023, the Company issued <ix:nonFraction contextRef="c279" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">5,000,000</ix:nonFraction> ordinary shares and net proceeds was $<ix:nonFraction contextRef="c280" decimals="0" format="ixt:num-dot-decimal" name="pbts:NetProceeds" scale="0" unitRef="usd">491,180</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_32" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 9, 2022, the
Company entered into a securities purchase agreement with YA II PN, LTD.. Pursuant to the agreement, YA II PN, LTD. shall purchase up
to $<ix:nonFraction contextRef="c281" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValuePurchaseOfAssets" scale="6" unitRef="usd">30</ix:nonFraction> million of the Company&#8217;s ordinary shares at the market price by <ix:nonFraction contextRef="c281" decimals="2" format="ixt:num-dot-decimal" name="pbts:OrdinarySharesMarketPricePercentage" scale="-2" unitRef="pure">96</ix:nonFraction>%, and the company shall issue to YA II PN, LTD. <ix:nonFraction contextRef="c282" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">223,880</ix:nonFraction>
ordinary shares as a commitment fee. As of December 31, 2022, the Company issued <ix:nonFraction contextRef="c283" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">17,035,074</ix:nonFraction> ordinary shares and net proceeds was $<ix:nonFraction contextRef="c284" decimals="0" format="ixt:num-dot-decimal" name="pbts:NetProceeds" scale="0" unitRef="usd">3,511,317</ix:nonFraction>.
The Company subsequently issued <ix:nonFraction contextRef="c285" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">223,880</ix:nonFraction> ordinary shares for commitment fee on January 1, 2023. In 2023, the Company issued <ix:nonFraction contextRef="c286" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">26,235,245</ix:nonFraction>
ordinary shares and net proceeds was $<ix:nonFraction contextRef="c287" decimals="0" format="ixt:num-dot-decimal" name="pbts:NetProceeds" scale="0" unitRef="usd">2,758,873</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_33" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 29, 2022, the
Company entered into a securities purchase agreement with TBS Capital LP, (&#8220;TBS&#8221;). Pursuant to the agreement, TBS shall purchase
up to $<ix:nonFraction contextRef="c288" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValuePurchaseOfAssets" scale="6" unitRef="usd">15</ix:nonFraction> million of the Company&#8217;s ordinary shares at the market price by <ix:nonFraction contextRef="c288" decimals="2" format="ixt:num-dot-decimal" name="pbts:OrdinarySharesMarketPricePercentage" scale="-2" unitRef="pure">96</ix:nonFraction>%, and the company shall issue to Yorkville <ix:nonFraction contextRef="c289" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">223,880</ix:nonFraction>
ordinary shares as a commitment fee. The Company issued <ix:nonFraction contextRef="c290" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">223,880</ix:nonFraction> ordinary shares for commitment fee on December 15, 2022. In 2023, the
Company issued <ix:nonFraction contextRef="c291" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">6,250,000</ix:nonFraction> ordinary shares and net proceeds was $<ix:nonFraction contextRef="c292" decimals="0" format="ixt:num-dot-decimal" name="pbts:NetProceeds" scale="0" unitRef="usd">530,000</ix:nonFraction>.</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>

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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 -->34<!-- 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-top: 0pt; margin-bottom: 0pt; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 13 &#8212; Equity (</b>continued)</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_34" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Conversion of convertible notes</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_35" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_34"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 16, 2020, the
Company issued an aggregate of <ix:nonFraction contextRef="c293" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOfRestrictedOrdinaryShares" scale="0" unitRef="shares">27,777,776</ix:nonFraction> restricted ordinary shares, par value $<ix:nonFraction contextRef="c294" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, of the Company, to the conversion
note holders. The fair value of the conversion note was assessed at $<ix:nonFraction contextRef="c293" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueConversionOfConvertibleSecurities" scale="0" unitRef="usd">65,258,333</ix:nonFraction> upon conversion based on the binomial model assessed by
the independent valuation firm.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_36" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_35"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 13, 2021, The Company
issued an aggregate of <ix:nonFraction contextRef="c295" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOrdinaryShares" scale="0" unitRef="shares">3,054,591</ix:nonFraction> ordinary shares, par value $<ix:nonFraction contextRef="c296" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, of the Company, to YA. The fair value of the conversion
note was assessed at $<ix:nonFraction contextRef="c295" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueConversionOfConvertibleSecurities" scale="0" unitRef="usd">4,445,433</ix:nonFraction> upon conversion based on the binomial model assessed by the independent valuation firm.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_37" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_36"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 8 2021, Uptown delivered conversion notice for all convertible
notes in an aggregate of principle of $<ix:nonFraction contextRef="c297" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOfPrinciple" scale="0" unitRef="usd">1,650,000</ix:nonFraction>. The Company issued an aggregate of <ix:nonFraction contextRef="c297" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOrdinaryShares" scale="0" unitRef="shares">1,676,437</ix:nonFraction> ordinary shares, par value $<ix:nonFraction contextRef="c298" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction>
per share, of the Company, to Uptown. The fair value of the conversion note was assessed at $<ix:nonFraction contextRef="c297" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueConversionOfConvertibleSecurities" scale="0" unitRef="usd">1,897,739</ix:nonFraction> upon conversion based on the binomial
model assessed by the independent valuation firm.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_38" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_37"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 25, 2022, The Company
issued an aggregate of <ix:nonFraction contextRef="c299" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOrdinaryShares" scale="0" unitRef="shares">5,929,838</ix:nonFraction> ordinary shares, par value $<ix:nonFraction contextRef="c300" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, of the Company, to YA (Note 11). The fair value of
the conversion note was assessed at $<ix:nonFraction contextRef="c299" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueConversionOfConvertibleSecurities" scale="0" unitRef="usd">2,261,270</ix:nonFraction> upon conversion based on the binomial model assessed by the independent valuation firm.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_39" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_38"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 12, 2022,
The Company issued an aggregate of <ix:nonFraction contextRef="c301" decimals="0" format="ixt:num-dot-decimal" name="pbts:AggregateOrdinaryShares" scale="0" unitRef="shares">13,981,758</ix:nonFraction> ordinary shares, par value $<ix:nonFraction contextRef="c302" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, of the Company, to Streeterville (Note
11). The fair value of the conversion note was assessed at $<ix:nonFraction contextRef="c301" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueConversionOfConvertibleSecurities" scale="0" unitRef="usd">1,534,654</ix:nonFraction> upon conversion based on the binomial model assessed by the independent
valuation firm.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_40" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_39"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Shares issued for reserve</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_41" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_40"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 5, 2021, the Company
issued <ix:nonFraction contextRef="c303" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">4,014,964</ix:nonFraction> ordinary shares held in an escrow account as reserve solely for potential stock options. On September 20, 2022, the Company
issued <ix:nonFraction contextRef="c304" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">2,416,650</ix:nonFraction> ordinary shares held in an escrow account as reserve solely for potential stock options. As of December 31, 2022, no
shares were transferred to the holders.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_42" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_41"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">At the market(&#8220;ATM&#8221;) offering </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_43" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_42"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 23, 2021, the
Company entered into a Sales Agreement (the &#8220;Sales Agreement&#8221;) with A.G.P./Alliance Global Partners, as sales agent (the &#8220;Agent&#8221;),
pursuant to which the Company may offer and sell, from time to time, through or to the Agent, as sales agent and/or principal (the &#8220;Offering&#8221;)
up to $<ix:nonFraction contextRef="c305" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockNumberOfSharesIssuedInTransaction" scale="0" unitRef="shares">30,000,000</ix:nonFraction> of its ordinary shares, par value $<ix:nonFraction contextRef="c306" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share (the &#8220;Shares&#8221;). Any Shares offered and sold in the
Offering will be issued pursuant to the Company&#8217;s Registration Statement on Form F-3 (the &#8220;Registration Statement&#8221;)
filed with the Securities and Exchange Commission (the &#8220;SEC&#8221;) on February 23, 2021, and the sales agreement prospectus that
forms a part of such Registration Statement, following such time as the Registration Statement is declared effective by the SEC, for an
aggregate offering price of up to $<ix:nonFraction contextRef="c305" decimals="-6" format="ixt:num-dot-decimal" name="pbts:AggregateOfferingPrice" scale="6" unitRef="usd">200</ix:nonFraction> million. For the year ended December 31, 2021, the Company sold <ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockNumberOfSharesIssuedInTransaction" scale="0" unitRef="shares">1,626,327</ix:nonFraction> ordinary shares, par
value $<ix:nonFraction contextRef="c3" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, through the ATM offering with net proceeds of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="pbts:NetProceeds" scale="0" unitRef="usd">5,128,477</ix:nonFraction>. For the year ended December 31, 2022, the Company
sold <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockNumberOfSharesIssuedInTransaction" scale="0" unitRef="shares">56,800</ix:nonFraction> ordinary shares, par value $<ix:nonFraction contextRef="c2" decimals="8" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">0.00166667</ix:nonFraction> per share, through the ATM offering with net proceeds of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="pbts:NetProceeds" scale="0" unitRef="usd">56,449</ix:nonFraction>, the amount was received
on January 28, 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_44" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_43"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Shares issued for long-term investments</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_45" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_44"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection of the long-term
investment of Smartconn, on January 20, 2022, the Company issued <ix:nonFraction contextRef="c307" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">17,138,305</ix:nonFraction> ordinary shares to the original shareholders of Smartconn
as consideration of <ix:nonFraction contextRef="c308" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:NoncashOrPartNoncashAcquisitionNoncashFinancialOrEquityInstrumentConsiderationRate" scale="-2" unitRef="pure">19.99</ix:nonFraction>% equity interest. The fair value of the shares issued amounted to $<ix:nonFraction contextRef="c308" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualFairValueOfSharesIssued" scale="0" unitRef="usd">8,305,222</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_46" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_45"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection of the long-term
investment of Boxinrui on June 28, 2022, the Company issued <ix:nonFraction contextRef="c309" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">19,942,553</ix:nonFraction> ordinary shares to the original shareholders of Boxinrui as consideration
of <ix:nonFraction contextRef="c310" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:NoncashOrPartNoncashAcquisitionNoncashFinancialOrEquityInstrumentConsiderationRate" scale="-2" unitRef="pure">15</ix:nonFraction>% equity interest. The fair value of the shares issued amounted to $<ix:nonFraction contextRef="c310" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualFairValueOfSharesIssued" scale="0" unitRef="usd">6,674,772</ix:nonFraction>. On December 28, 2022, the Company further issued <ix:nonFraction contextRef="c311" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">55,300,530</ix:nonFraction>
ordinary shares to the original shareholders of Boxinrui as consideration of <ix:nonFraction contextRef="c312" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:NoncashOrPartNoncashAcquisitionNoncashFinancialOrEquityInstrumentConsiderationRate" scale="-2" unitRef="pure">20</ix:nonFraction>% equity interest. The fair value of the shares issued
amounted to $<ix:nonFraction contextRef="c312" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualFairValueOfSharesIssued" scale="0" unitRef="usd">4,446,163</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_47" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_46"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection of the long-term
investment of Chenbao, on August 24, 2022, the Company issued <ix:nonFraction contextRef="c313" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">5,756,481</ix:nonFraction> ordinary shares to the original shareholders of Chenbao as partial
consideration of <ix:nonFraction contextRef="c314" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:NoncashOrPartNoncashAcquisitionNoncashFinancialOrEquityInstrumentConsiderationRate" scale="-2" unitRef="pure">5</ix:nonFraction>% equity interest. The fair value of the shares issued amounted to $<ix:nonFraction contextRef="c314" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCompensationArrangementWithIndividualFairValueOfSharesIssued" scale="0" unitRef="usd">1,844,377</ix:nonFraction>.</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_48" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_47"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection of the long-term
investment of DTI, on November 1, 2022, the Company issued <ix:nonFraction contextRef="c315" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">55,506,750</ix:nonFraction> ordinary shares to the original shareholders of DTI as consideration
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</div><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"></p><div>

</div><!-- Field: Page; Sequence: 165; 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>
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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; text-align: center"><b>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED 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"><b>Note 13 &#8212; Equity</b> (continued)</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_49" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_48"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Additional paid-in capital</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_50" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_49"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2022 and
2021, additional paid-in capital in the consolidated balance sheet represented the combined contributed capital of the Company&#8217;s
subsidiaries.</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_51" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_50"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Statutory reserve </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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_52" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_51"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under PRC law, the Company&#8217;s
subsidiary located in the PRC (collectively referred as the (&#8220;PRC entities&#8221;) are required to provide for certain statutory
reserves. The PRC entities are required to allocate at least <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="pbts:AllocationOfStatutoryReservePercentage" scale="-2" unitRef="pure">10</ix:nonFraction>% of their after-tax profits on an individual company basis as determined
under PRC accounting standards to the statutory reserve and has the right to discontinue allocations to the statutory reserve if such
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</div><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_52"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s subsidiaries
in PRC had accumulated deficits for the years ended December 31, 2022 and 2021, as a result, the statutory reserve balances were <span style="-sec-ix-hidden: hidden-fact-189">$<span style="-sec-ix-hidden: hidden-fact-191">nil</span></span>
as of December 31, 2022 and 2021.</p></ix:continuation><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><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 0; text-align: justify"><b>Note 14 &#8212; Commitments and contingencies</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</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 0; text-align: justify"><span style="text-decoration:underline">Contingencies</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the ordinary course of the
business, the Company subject to periodic legal or administrative proceedings. The Company accrues liability when the loss is probable
and reasonably estimable. On April 28, 2022, Shengfeng Zeng (a former employee) filed a lawsuit against the Company for a debt dispute
of $<ix:nonFraction contextRef="c332" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShorttermDebtMaximumAmountOutstandingDuringPeriod" scale="0" unitRef="usd">71,282</ix:nonFraction> (RMB<ix:nonFraction contextRef="c332" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShorttermDebtMaximumAmountOutstandingDuringPeriod" scale="0" unitRef="cny">491,647</ix:nonFraction>). On January 10, 2023, the Court ordered the Company to pay Shengfeng Zeng $<ix:nonFraction contextRef="c333" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RepaymentsOfShortTermDebt" scale="0" unitRef="usd">71,282</ix:nonFraction> (RMB<ix:nonFraction contextRef="c333" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RepaymentsOfShortTermDebt" scale="0" unitRef="cny">491,647</ix:nonFraction>). The Company filed
an appeal on March 6, 2023. The Company recorded the disputed amount $<ix:nonFraction contextRef="c334" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShorttermDebtMaximumAmountOutstandingDuringPeriod" scale="0" unitRef="usd">69,159</ix:nonFraction> (RMB<ix:nonFraction contextRef="c334" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShorttermDebtMaximumAmountOutstandingDuringPeriod" scale="0" unitRef="cny">477,001</ix:nonFraction>) in the accrued liabilities based on the best
estimate of the management as of December 31, 2022.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_SegmentReportingDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:SegmentReportingDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 15 &#8212; Segment reporting</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_SegmentReportingDisclosureTextBlock-c0_cont_2" id="_SegmentReportingDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the years ended December
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</div><div>

</div><ix:continuation continuedAt="_SegmentReportingDisclosureTextBlock-c0_cont_3" id="_SegmentReportingDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table presents
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</div><div>

</div><ix:continuation continuedAt="_SegmentReportingDisclosureTextBlock-c0_cont_4" id="_SegmentReportingDisclosureTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfRevenueByMajorCustomersByReportingSegmentsTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfRevenueByMajorCustomersByReportingSegmentsTableTextBlock"><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>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">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="text-align: justify">REVENUES:</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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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Subscription services</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation id="_SegmentReportingDisclosureTextBlock-c0_cont_4"><ix:continuation id="_ScheduleOfRevenueByMajorCustomersByReportingSegmentsTableTextBlock-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="vertical-align: top; text-align: justify">
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</tr></table></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#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"></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">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- 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>POWERBRIDGE TECHNOLOGIES CO., LTD.<br/>
NOTES TO CONSOLIDATED 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>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_5" id="_SubsequentEventsTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 28, 2023, the Company
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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_6" id="_SubsequentEventsTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Bank loans</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_7" id="_SubsequentEventsTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 16, 2023, Powerbridge
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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_8" id="_SubsequentEventsTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 19, 2023, Powerbridge
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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_9" id="_SubsequentEventsTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 14, 2023, Powerbridge
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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_10" id="_SubsequentEventsTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Convertible notes</span></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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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_12" id="_SubsequentEventsTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Equity financing</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_16" id="_SubsequentEventsTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">New subsidiary</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&#160;</p></ix:continuation><div>

</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 20pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 20pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 20pt">F-37</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 20pt"></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 1.5pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 20pt">&#160;</p><div>

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

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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
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 for the transition period from ____________to ____________
Commission
file number:
001-38851
POWERBRIDGE
TECHNOLOGIES CO., LTD.
(Exact
Name of Registrant as Specified in its Charter)
N/A
(Translation
of Registrant's Name into English)
Cayman
Islands
(Jurisdiction
of Incorporation or Organization)
Advanced
Business Park
,
9th Fl, Bldg C2
,
29 Lanwan Lane
Hightech
District,
Zhuhai
, Guangdong
519080
,
ChinaTel
: +86-756-339-5666
(Address
of principal executive offices)
Stewart
Lor
, Chief Executive Officer
Advanced
Business Park
,
9th Fl, Bldg C2
,
29 Lanwan Lane
Hightech
District,
Zhuhai
, Guangdong
519080
,
ChinaTel
:
+
86-756-339-5666
(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
Name of Each Exchange on Which Registered
Ordinary shares, par value $0.00166667
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 shares as of the close of the period covered
by the annual report:
As
of December 31, 2022, the issuer had
285,005,647
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 and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post 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
☒
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. Yes ☐ No
☒
TABLE
OF CONTENTS
INTRODUCTION
ii
PART I
1
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
39
ITEM 4A.
UNRESOLVED STAFF COMMENTS
69
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
70
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
88
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
98
ITEM 8.
FINANCIAL INFORMATION
102
ITEM 9.
THE OFFER AND LISTING
102
ITEM 10.
ADDITIONAL INFORMATION
103
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
116
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
116
PART II
117
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
117
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
117
ITEM 15.
CONTROLS AND PROCEDURES
117
ITEM 16
RESERVED
119
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
119
ITEM 16B.
CODE OF ETHICS
119
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
119
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
120
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
120
ITEM 16F.
CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
120
ITEM 16G.
CORPORATE GOVERNANCE
120
ITEM 16H.
MINE SAFETY DISCLOSURE
120
ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
120
PART III
121
ITEM 17.
FINANCIAL STATEMENTS
121
ITEM 18.
FINANCIAL STATEMENTS
121
ITEM 19.
EXHIBITS
121
i
INTRODUCTION
Unless
otherwise indicated, numerical figures included in this Annual Report on Form 20-F (the "
Annual Report
") have been
subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations
of the figures that precede them.
For
the sake of clarity, this Annual Report follows the English naming convention of first name followed by last name, regardless of whether
an individual's name is Chinese or English. Numerical figures included in this Annual Report have been subject to rounding adjustments.
Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.
Certain market data and other statistical information contained in this Annual Report are based on information from independent industry
organizations, publications, surveys and forecasts. Some market data and statistical information contained in this Annual Report are
also based on management's estimates and calculations, which are derived from our review and interpretation of the independent
sources listed above, our internal research and our knowledge of the PRC information technology industry. While we believe such information
is reliable, we have not independently verified any third-party information and our internal data has not been verified by any independent
source.
●
All references to "RMB,"
    "yuan" and "Renminbi" are to the legal currency of China, all references to "HKD" is to the legal
    currency of Hong Kong, and all references to "USD" and "U.S. dollars" are to the legal currency of the United
    States.
●
"AIC" refers
    to Administration for Industry and Commerce in China.
●
Depending on the context,
    the terms "we", "us", "our company", "our", "Powerbridge" and "Powerbridge
    Cayman" refer to Powerbridge Technologies Co., Ltd., a Cayman Islands company, its subsidiaries and affiliated companies.
●
"Controlling Shareholders"
    refers to Stewart Lor.
●
Depending on the context,
    the terms "we", "us", "our company", "our", "Powerbridge" and "Powerbridge
    Cayman" refer to Powerbridge Technologies Co., Ltd., a Cayman Islands company, its subsidiaries and affiliated companies.
●
"Exchange Act"
    refers to the U.S. Securities Exchange Act of 1934, as amended.
●
"Fiscal Year"
    refers to the period from January 31 of each calendar year to December 31 of the following calendar year.
●
"Hongding Hong Kong"
    refers to Hongding Technology Co., Ltd., a Hong Kong company.
●
"Hongding Shenzhen"
    refers to Shenzhen Hongding Interconnect Technology Co., Ltd., a PRC company.
●
"IPO" means
    the initial public offering by the Company of 2,012,500 Ordinary Shares consummated on April 4, 2019 (including the full exercise
    of the over-allotment option by the underwriters to purchase an additional 262,500 Ordinary Shares on May 10, 2019).
●
"IP" refers
    to intellectual property.
●
"Powerbridge HK"
    refers to Powerbridge Holdings Limited, a Hong Kong company.
●
"Powerbridge Zhuhai"
    refers to Powerbridge Technology Group Co., Ltd., a PRC company.
●
"PRC" and "China"
    refer to the People's Republic of China, excluding, for the purposes of this Annual Report only, Macau, Taiwan and Hong Kong.
●
"Registration Statement"
    refers to the Company's Registration Statement on Form F-1 (File No. 333-229128) for the sale of up to 1,750,000 Ordinary Shares
    initially filed on January 4, 2019, and subsequently amended thereafter, which became effective on March 28, 2019.
ii
●
"R&D" refers
    to research and development.
●
"Securities Exchange
    Commission", "SEC", "Commission" or similar terms refer to the Securities Exchange Commission
●
"Sarbanes-Oxley Act"
    refers to the Sarbanes-Oxley Act of 2002.
●
"Securities Act"
    refers to the Securities Act of 1933.
●
"Shares" or
    "Ordinary Share" refers to our Ordinary Shares, par value $0.00166667 per share.
●
"United States",
    "U.S." and "US" refer to the United States of America.
Discrepancies
in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.
This
annual report on Form 20-F includes our audited consolidated financial statements for the years ended December 31, 2022, 2021 and 2020.
Unless
otherwise noted, all currency figures in this filing are in U.S. dollars. Any discrepancies in any table between the amounts identified
as total amounts and the sum of the amounts listed therein are due to rounding. Our reporting currency is U.S. dollar and our functional
currency is Renminbi. This Annual Report contains translations of certain foreign currency amounts into U.S. dollars for the convenience
of the reader. Other than in accordance with relevant accounting rules and as otherwise stated, all translations of Renminbi into U.S.
dollars in this Annual Report were made at the rate of RMB6.8972 to USD1.00, the noon buying rate on December 31, 2022, as set forth
in the H.10 statistical release of the U.S. Federal Reserve Board. Where we make period-on-period comparisons of operational metrics,
such calculations are based on the Renminbi amount and not the translated U.S. dollar equivalent. We make no representation that the
Renminbi or U.S. dollar amounts referred to in this Annual Report could have been or could be converted into U.S. dollars or Renminbi,
as the case may be, at any particular rate or at all.
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
A.
[Reserved]
B.
Capitalization and Indebtedness
Not
applicable.
C.
Reasons for the Offer and Use of Proceeds
Not
applicable.
D.
Risk Factors
Summary
of the Risk Factors
You
should carefully consider the following risk factors, together with all of the other information included in this Annual Report. Investment
in our securities involves a high degree of risk. You should carefully consider the risks described below together with all of the other
information included in this Annual Report before making an investment decision. The risks and uncertainties described below represent
our known material risks to our business. If any of the following risks actually occurs, our business, financial condition or results
of operations could suffer. In that case, you may lose all or part of your investment.
Risks
Related to Our Business and Industry
Risks
and uncertainties related to our business and industry include, but are not limited to, the following:
●
The Company's business
    operations could be adversely affected by the continued outbreak of COVID-19.
●
Economic uncertainties
    or downturns could materially adversely affect our business.
●
The growth and success
    of our business depends on our ability to develop new services and enhance existing services in order to keep pace with rapid changes
    in technology.
●
If we do not succeed in
    attracting new customers for our services and growing revenues from existing customers, we may not achieve our revenue growth goals.
●
We may be unable to effectively
    manage our expansion for the anticipated growth, which could place significant strain on our management personnel, systems and resources.
    We may not be able to achieve anticipated growth, which could materially and adversely affect our business and prospects.
●
We face risks associated
    with having an extended selling and implementation cycle for our services that require us to make significant resource commitments
    prior to realizing revenues for those services.
●
Adverse changes in the
    economic environment, either in China or globally, could reduce our customers' purchases from us and increase pricing pressure,
    which could materially and adversely affect our revenues and results of operations.
●
We generate a significant
    portion of our revenues from a relatively small number of major customers and loss of business from these customers could reduce
    our revenues and significantly harm our business.
●
We may be forced to reduce
    the prices of our services due to increased competition and reduced bargaining power with our customers, which could lead to reduced
    revenues and profitability.
●
A portion of our income
    is generated, and will in the future continue to be generated, on a project basis with a fixed price; we may not be able to accurately
    estimate costs and determine resource requirements in relation to our projects, which would reduce our margins and profitability.
1
Risks
Related to Our Corporate Structure
Risks
and uncertainties related to our corporate structure include, but are not limited to, the following:
●
We are a Cayman Islands
    company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under
    U.S. law, shareholders may have less protection for their shareholder rights than they would under U.S. law.
●
Judgments obtained against us by our shareholders may
    not be enforceable.
●
We may lose our foreign
    private issuer status in the future, which could result in significant additional costs and expenses.
●
Our disclosure controls and procedures may not prevent
    or detect all errors or acts of fraud.
●
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.
Risks
Related to Our Ordinary Shares
Risks
and uncertainties related to our Shares include, but are not limited to, the following:
●
Our Shares may be delisted
    from the Nasdaq Capital Market as a result of our failure of meeting the Nasdaq Capital Market continued listing requirements.
●
Our issuance of new shares
    and convertible note had a dilutive effect on our existing shareholders and may adversely impact the market price of our Ordinary
    Shares.
Risks
Related to Doing Business in China
Risks
and uncertainties related to conducting business in China include, but are not limited to, the following:
●
The Chinese government
    exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required
    to obtain approval from Chinese authorities to issue securities to foreign investors, however, if our subsidiaries or the holding
    company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges,
    we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors.
●
Adverse changes in political,
    economic and other policies of the Chinese government could have a material adverse effect on the overall economic growth of China,
    which could materially and adversely affect the growth of our business and our competitive position.
●
Uncertainties with respect
    to the PRC legal system could have a material adverse effect on us.
●
We may be adversely affected
    by the complexity and uncertainties of and changes in PRC regulation of Internet business and related companies.
●
U.S. regulators'
    ability to conduct investigations or enforce rules in China is limited.
●
We face uncertainty regarding
    the PRC tax reporting obligations and consequences for certain indirect transfers of the stock of our operating company.
2
Risks
Related to Our Business and Industry
The
Company's business operations could be adversely affected by the continued outbreak of COVID-19.
The
Company's business operations could continue to be adversely affected by the recent outbreak of respiratory illness caused by a
novel coronavirus known as COVID-19 which was first reported in the City of Wuhan, Hubei, China. The Company's corporate
headquarter is located in Zhuhai, China with operation offices located in Wuhan, Changsha, Nanning and Hangzhou, where any outbreak of
contagious diseases and other adverse public health developments could be materially adverse on the Company's business operations.
In response to the highly contagious and sometimes fatal coronavirus inflicting thousands of people in China, the local government
imposed travel restrictions and quarantines order to help control the spread of COVID-19 in February 2020. During 2021, the situation
in China appeared to be on a path of slow recovery from the impact and compared with 2020, the adverse impact of COVID-19 on our operations
was alleviated. During the first quarter of 2020, our operations were closed in February due to China government mandates and we moved
quickly to transition our colleague base to a fully remote working environment in all our locations. The ongoing COVID-19 pandemic not
only adversely impacted our operations but business of our customers. We experienced delayed customer payments and rescheduled customer
orders, which adversely impacts the Company's results of operations, cash flows and financial position. During 2022, our business
continued to be adversely impacted by the COVID-19 pandemic. Specifically, a new COVID-19 subvariant (Omicron) outbreak hit China in
March 2022, spreading more quickly and easily than previous strains. As a result, a new round of lockdowns, quarantines, or travel restrictions
were imposed upon different provinces or cities in China by the relevant local government authorities.
The
Company primarily engages in providing software application and technology solutions and services to corporate and government customers
primarily located in China. Our customers are corporate and government organizations engaged in global trade, including import and export
companies, manufacturers and logistics providers engaged in international trade, as well as customs, ports, terminals, and other government
agencies that oversee the flow of goods and services across borders. The global outbreak of COVID-19 has significantly and adversely
impacted our business operations. During 2021 and 2022, restrictions on movement within China still took place as there were still intermittent
regional outbreaks of COVID-19. Given that the COVID-19 had been developed into a higher level of infectivity and lower level of lethality,
the intermittent outbreaks of COVID-19 in the surrounding areas still posed negative effect on our business activities and forced us
to postpone intercity in-person business meetings. We might fail to stick with the original timelines of certain on-premise projects.
We also experienced a slowdown in our regular business activities, as a result of remote working requirements and travel restrictions.
Our business in 2023 will be dependent on future developments such as new information on the effectiveness of the mitigation strategies,
the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the related travel advisories and restrictions,
the overall impact of the COVID-19 pandemic on the global economy and capital markets, and the efficacy of COVID-19 vaccines, which may
also take extended time to be widely and adequately distributed, all of which remain highly uncertain and unpredictable. Any potential
impact to the Company's results will depend on, to a large extent, future developments and new information that may emerge regarding
the duration and severity of the COVID-19 and the actions taken by governmental authorities and other entities to contain the COVID-19
or treat its impact, almost all of which are beyond the Company's control. Given this uncertainty, we are currently neither able
to affirm whether there will be positive or negative effect on our business under the changes in policies nor quantify the expected impact
of the COVID-19 pandemic on our future operations, financial condition, liquidity, and results of operations.
Economic
uncertainties or downturns could materially adversely affect our business.
Current
or future economic uncertainties or downturns, including those caused by the ongoing COVID-19 outbreak (as discussed above),
could adversely affect our business and operating results. Negative conditions in the general economy both in the China and abroad, including
conditions resulting from changes in gross domestic product growth, the continued sovereign debt crisis, financial and credit market
fluctuations, political deadlock, natural catastrophes, pandemics, warfare and terrorist attacks on the United States, Europe, the Asia
Pacific region or elsewhere, could cause a decrease in business investments, including corporate spending on business intelligence software
in general and negatively affect the rate of growth of our business.
General
worldwide economic conditions may experience significant downturns and may be unstable. These conditions make it extremely difficult
for our customers and us to forecast and plan future business activities accurately, and they could cause customers to re-evaluate their
decisions to subscribe to our platform, which could delay and lengthen our sales cycles or result in cancellations of planned purchases.
Furthermore, during challenging economic times customers may tighten their budgets and face issues in gaining timely access to sufficient
credit, which could result in an impairment of their ability to make timely payments to us. In turn, we may be required to increase our
allowance for doubtful accounts, which would adversely affect our financial results.
3
For
example, the rapid spread of coronavirus globally in 2020 and 2021 has resulted in travel restrictions and in some cases, prohibitions
of non-essential travel, disruption and shutdown of businesses and greater uncertainty in global financial markets. Health concerns or
political or governmental developments in countries in which we or our customers, partners and service providers operate could result
in economic, social or labor instability, slow our sales process, result in customers not purchasing or renewing our products or failing
to make payments, and could otherwise have a material adverse effect on our business and our results of operations and financial condition.
The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain and
will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private
businesses to attempt to contain the coronavirus. Any prolonged contractions in the industries in which our customers or partners
operate could materially and adversely impact our business, results of operations and financial condition.
To
the extent subscriptions to our system solutions are perceived by customers and potential customers to be discretionary, our revenue
may be disproportionately affected by delays or reductions in general information technology spending. Moreover, competitors may respond
to market conditions by lowering prices and attempting to lure away our customers. In addition, the increased pace of consolidation in
certain industries may result in reduced overall spending on our system solutions.
We
cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within any particular
industry. If the economic conditions of the general economy or industries in which we operate do not improve, or worsen from present
levels, our business, operating results, financial condition and cash flows could be adversely affected.
The
growth and success of our business depends on our ability to develop new services and enhance existing services in order to keep pace
with rapid changes in technology.
The
market for our services is characterized by rapid technological changes, evolving industry standards, changing customer preferences and
new product and service introductions. Our future growth and success depend significantly on our ability to anticipate developments in
technologies, and develop and offer new services to meet our customers' evolving needs. We may not be successful in anticipating
or responding to these developments in a timely manner, or if we do respond, the services or technologies we develop may not be successful
in the marketplace. The development of some of the services and technologies may involve significant upfront investments and the failure
of these services and technologies may result in our being unable to recover these investments, in part or in full. Further, services
or technologies that are developed by our competitors may render our services uncompetitive or obsolete. In addition, new technologies
may be developed that allow our customers to more cost-effectively perform the services that we provide, thereby reducing demand for
our services. Should we fail to adapt to the rapidly changing technologies or if we fail to develop suitable services to meet the evolving
and increasingly sophisticated requirements of our customers in a timely manner, our business and results of operations could be materially
and adversely affected.
Furthermore,
our future growth and success could be adversely affected by conditions of potential business partners, which may cause delay or failure
in development of the services or technologies.
If
we do not succeed in attracting new customers for our services and growing revenues from existing customers, we may not achieve our revenue
growth goals.
We
plan to significantly expand the number of customers we serve to diversify our customer base and grow our revenues. Obtaining new customers
is important for us to achieve rapid revenue growth. We also plan to grow revenues from our existing customers by identifying and selling
additional services to them. Our ability to attract new customers, as well as our ability to grow revenues from existing customers, depends
on a number of factors, including our ability to offer high quality services at competitive prices, the strength of our competitors and
the capabilities of our sales and marketing teams. If we are not able to continue to attract new customers or to grow revenues from our
existing customers, we may not be able to grow our revenues as quickly as we anticipate or at all.
4
We
may be unable to effectively manage our expansion for the anticipated growth, which could place significant strain on our management
personnel, systems and resources. We may not be able to achieve anticipated growth, which could materially and adversely affect our business
and prospects.
The
number of our total employees decreased from 210 in December 2021 to 187 in December 2022. As of the date of this Annual Report, we have
177 full-time employees. We have four branches, of which are located in China (Changsha, Wuhan, Nanning, Hangzhou) and maintain offices
in Changsha, Wuhan, Nanning and Hangzhou to serve different customers in various geographic locations. In order to pursue existing and
potential market opportunities, we plan to expand our business including (i) establishing new offices and expanding our current offices
in China; (ii) exploring and expanding into international markets; and (iii) upgrading our existing services and introducing new services.
We are facing the following challenges with respect to our planned expansion:
●
recruiting, training, developing
    and retaining sufficient industry and technology talents and management personnel;
●
creating and capitalizing
    upon economies of scale;
●
managing a larger number
    of customers in a greater number of locations;
●
maintaining effective oversight
    of personnel and offices;
●
coordinating work among
    offices and project teams and maintaining high resource utilization rates;
●
integrating new personnel
    and expanded operations while preserving our culture and core values;
●
developing and improving
    our internal administrative infrastructure, particularly our financial, operational, human resources, communications and other internal
    systems, procedures and controls; and
●
adhering to and further
    improving our service quality and process execution standards and maintaining high levels of customer satisfaction.
Moreover,
as we introduce new services or enter into new markets, we may face new market, technological and operational risks and challenges with
which we are unfamiliar, and it may require substantial management efforts and skills to mitigate these risks and challenges. As a result
of any of these problems associated with expansion, our business, results of operations and financial condition could be materially and
adversely affected. Furthermore, we may not be able to achieve anticipated growth, which could materially and adversely affect our business
and prospects.
We
face risks associated with having an extended selling and implementation cycle for our services that require us to make significant resource
commitments prior to realizing revenues for those services.
We
have an extended selling cycle for certain of our software applications and technology services, which requires significant investment
of capital, human resources and time by both our customers and us. Before committing to use our services, potential customers require
us to expend substantial time and resources educating them on the value of our services and our ability to meet their requirements. Therefore,
our selling cycle is subject to many risks and delays over which we have little or no control, including our customers' decisions
to choose alternatives to our services (such as other providers or in-house resources) and the timing of our customers' budget
cycles and approval processes. Implementing our services, particularly for our application development services also involves a significant
commitment of resources over an extended period of time ranging from three months to three years from both our customers and us. The
ongoing COVID-19 pandemic has resulted in a reduction in economic activity by adversely affecting the Company's selling cycle.
As a result, we may have a longer selling cycle and delay in business meetings, which could materially and adversely affect our business
and our financials. Our customers may experience delays in obtaining internal approvals or delays associated with our services, thereby
further delaying the implementation process. Our current and future customers may not be willing or able to invest the time and resources
necessary to implement our services, and we may fail to close sales with potential customers to which we have devoted significant time
and resources, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
5
Adverse
changes in the economic environment, either in China or globally, could reduce our customers' purchases from us and increase pricing
pressure, which could materially and adversely affect our revenues and results of operations.
The
software application and technology service industry are particularly sensitive to the economic environment, both in China and globally,
and tend to decline during general economic downturns. Accordingly, our results of operations, financial condition and prospects are
subject to a significant degree to the economic environment, especially for regions in which we and our customers operate. During an
economic downturn, our customers may cancel, reduce or defer their technology spending or change their technology strategy, and reduce
their purchases from us. The recent global economic slowdown, any future economic slowdown, and the resulting diminution in technology
spending, could also lead to increased pricing pressure from our customers. The trade war between the U.S. and China which may lead to
higher percentage of tariff to be placed on Chinese and American goods and services could also lead to a reduction of import and export
volume for some of our customers resulting in reduced purchases of our services from these customers. The occurrence of any of these
events could materially and adversely affect our revenues and results of operations.
We
generate a significant portion of our revenues from a relatively small number of major customers and loss of business from these customers
could reduce our revenues and significantly harm our business.
We
believe that in the foreseeable future we will continue to derive a significant portion of our revenues from a small number of major
customers. For the year ended December 31, 2022, one customer accounted for 31.8% of the Company's total revenues. For the year
ended December 31, 2021, one customer accounted for 12.8% of the Company's total revenues. For the year ended December 31, 2020,
one customer accounted for 25.7% of the Company's total revenues.
Our
ability to maintain close relationships with major customers is essential to the growth and profitability of our business. However, the
volume of work performed for a specific customer is likely to vary from year to year, especially since we are generally not our customers'
exclusive technology services provider and we do not have long-term commitments with any of our customer to purchase our services. A
major customer in one year may not provide the same level of revenues for us in any subsequent year. The services that we provide to
our customers, and the revenues and income from those services, may decline or vary as the type and quantity of services we provide changes
over time. In addition, our reliance on any individual customer for a significant portion of our revenues may give that customer a certain
degree of pricing leverage against us when negotiating contracts and terms of service. In addition, a number of factors other than our
performance could cause the loss of or reduction in business or revenues from a customer, and these factors are not predictable. These
factors may include organization restructuring, pricing pressure, changes to its technology strategy, switching to another services provider
or returning work in-house. The loss of any of our major customers could adversely affect our financial condition and results of operations.
We
may be forced to reduce the prices of our services due to increased competition and reduced bargaining power with our customers, which
could lead to reduced revenues and profitability.
The
software application and technology service industry in China is developing rapidly and related technology trends are constantly evolving.
This results in the frequent introduction of new services and significant price competition from our competitors. We may be unable to
offset the effect of declining average sales prices through increased sales volumes and/or reductions in our costs. Furthermore, we may
be forced to reduce the prices of our services in response to offerings made by our competitors. Finally, we may not have the same level
of bargaining power we have enjoyed in the past when it comes to negotiating for the prices of our services, all of which could lead
to reduced revenues and profitability.
6
A
portion of our income is generated, and will in the future continue to be generated, on a project basis with a fixed price; we may not
be able to accurately estimate costs and determine resource requirements in relation to our projects, which would reduce our margins
and profitability.
A
portion of our income is generated, and will continue to be generated, from fees we receive for our projects at a fixed price. Our projects
often involve complex technologies, utilizing workforces with different skill sets and competencies, and must be completed within compressed
timeframes and meet customer requirements that are subject to changes and increasingly stringent. In addition, some of our fixed-price
projects are multi-year projects that require us to undertake significant projections and planning related to resource utilization and
costs. If we fail to accurately assess the time and resources required for completing projects and to price our projects profitably,
our business, results of operations and financial condition could be adversely affected.
Our
revenues and results of operations are affected by seasonal trends.
Our
business is affected by seasonal trends. In particular, our revenues are typically progressively higher in the second, third and fourth
quarters of each year compared to the first quarter of each year due to seasonal trends, such as: (i) a general slowdown in business
activities and a reduced number of working days during the first quarter of each year as a result of the Chinese New Year holiday period;
and (ii) our customers in general tend to spend their technology and software budgets in the second half of the year and in particular
the fourth quarter. Other factors that may cause our quarterly operating results to fluctuate include, among others, changes in general
economic conditions in China and the impact of unforeseen events. We believe that our revenues will continue to be affected in the future
by seasonal trends. As a result, you may not be able to rely on period-to-period comparisons of our operating results as an indication
of our future performance, and we believe it is more meaningful to evaluate our business on an annual basis.
If
we are unable to collect our receivables from our existing customers, our results of operations and cash flows could be adversely affected.
Our
business depends on our ability to successfully obtain payment from our customers of the amounts they owe us for our services. As of
December 31, 2022 and 2021, our accounts receivable balance, net of allowance, amounted to approximately $14.8 million and $24.2 million,
respectively. As of December 31, 2022 and 2021, no customer accounted for more than 10% of our accounts receivable. The significant outstanding
accounts receivable balance was mainly related to certain projects for our government customers such as government agencies, authorities
and state-owned enterprises. Due to multiple levels of the government approval process for payments, it could take extra time for us
to collect the full proceeds from our government customers. The COVID-19 pandemic created significant economic uncertainties and volatility
in the credit and capital markets since December 2019. Many customers have delayed their payments to our Company, which caused the significant
increase in the Company's aged accounts receivable balance over one year and slow collection progress in 2022 and 2021. In addition,
since we generally do not require collateral or other security from our customers, we establish an allowance for doubtful accounts based
upon estimates, historical experiences and other factors surrounding the credit risk of specific customers. However, actual losses on
customer receivables balance could differ from those that we anticipate and as a result we might need to adjust our allowance. There
is no guarantee that we will accurately assess the creditworthiness of our customers. Macroeconomic conditions, including related turmoil
in the global financial system, could also result in financial difficulties for our customers, including limited access to the credit
markets, insolvency or bankruptcy, and as a result could cause customers to delay payments to us, request modifications to their payment
arrangements that could increase our receivables balance, or default on their payment obligations to us. As a result, an extended delay
or default in payment relating to a significant account will have a material and adverse effect on the aging schedule and turnover days
of our accounts receivable. If we are unable to collect our receivables from our customers in accordance with the contracts with our
customers, our results of operations and cash flows could be adversely affected.
7
We
face a number of risks in our strategy to target larger organizations for sales of our services, and if we do not manage these efforts
effectively, our business and results of operations could be adversely affected.
A
portion of our sales and marketing efforts is focusing on larger corporate and government organizations. As a result, we face a number
of risks with respect to this strategy. For example, we expect to incur higher costs and longer sales cycles for larger organizations,
and we may be less effective at predicting when will we complete these sales. In our industry, the decision to invest in our services
may require a great number of product evaluations and multiple approvals within a potential customer's organization, which may
require us to invest more time educating these potential customers. In addition, larger organizations may demand more features and professional
services. As a result, these sales opportunities would likely lengthen our typical sales cycle and may require us to devote greater research
and development, sales, support, and professional services resources to individual customers. This could strain our resources and result
in increased costs. Moreover, larger customers may demand discounts in pricing, which could lower the amount of revenue we generate from
any particular services that we offer. If an expected transaction is delayed until a subsequent period, or if we are unable to close
one or more expected significant transactions with larger customers or potential new customers in a particular period, our results of
operations for that period, and for any future periods in which revenue from such transaction would otherwise have been recognized, may
be adversely affected. Our investments in marketing and selling to large organizations may not be successful, which could harm our results
of operations and our overall ability to grow our customer base.
Our
business depends, in part, on services to the public sector, and significant changes in the contracting or fiscal policies of the public
sector could have an adverse effect on our business.
We
derive a large portion of our revenue from our services to government organizations, and we believe that the success and growth of our
business will continue to depend in part on our successful procurement of government contracts. Factors that could impede our ability
to maintain or increase the amount of revenue derived from government contracts, include:
●
changes in fiscal or contracting
    policies;
●
decreases in available
    government funding;
●
changes in government programs
    or applicable requirements;
●
the adoption of new laws
    or regulations or changes to existing laws or regulations; and
●
potential delays or changes
    in the government appropriations or other funding authorization processes.
The
occurrence of any of the foregoing could cause governmental organizations to delay or refrain from purchasing our services in the future
or otherwise have an adverse effect on our business, results of operations and financial condition.
Any
failure to offer high-quality customer support may adversely affect our relationships with our customers.
Our
ability to retain existing customers and attract new customers depends on our ability to maintain a consistently high level of customer
service and technical support. Our customers depend on our service support team to assist them in utilizing our services effectively
and to help them to resolve issues quickly and to provide ongoing support. If we are unable to hire and train sufficient support resources or
are otherwise unsuccessful in assisting our customers effectively, it could adversely affect our ability to retain existing customers
and could prevent prospective customers from adopting to our services. We may be unable to respond quickly enough to accommodate short-term
increases in demand for customer support. We also may be unable to modify the nature, scope and delivery of our customer support to compete
with changes in the support services provided by our competitors. Increased demand for customer support, without corresponding revenue,
could increase our costs and adversely affect our business, results of operations and financial condition. Our sales are highly dependent
on our business reputation and on positive recommendations from customers. Any failure to maintain high-quality customer support, or
a market perception that we do not maintain high-quality customer support, could adversely affect our reputation, business, results of
operations and financial condition.
8
Incorrect
or improper implementation or use of our services could result in customer dissatisfaction and negatively affect our business, results
of operations, financial condition, and growth prospects.
Our
services are deployed in a wide variety of increasingly complex technology environments, including on premises, in the cloud or in hybrid
environments. We believe our future success will depend on our ability to increase sales of our services for use in such deployments.
We must often assist our customers in achieving successful implementations of our services, which we do through our professional consulting
and technical support services. If our customers are unable to implement our services successfully, or unable to do so in a timely manner,
customer perceptions of our services may be harmed, our reputation and brand may suffer, and customers may choose to cease usage of our
services or not to expand their use of our services. Our customers may need trainings in the proper use of and the variety of benefits
that can be derived from our services to maximize their benefits. If our services are not effectively implemented or used correctly or
as intended, or if we fail to adequately train customers on how to efficiently and effectively use our services, our customers may not
be able to achieve satisfactory outcomes. This could result in negative publicity and legal claims against us, which may cause us to
generate fewer sales to new customers and reductions in renewals or expansions of the use of our services with existing customers, any
of which would harm our business and results of operations.
Failure
to adhere to regulations that govern our customers' businesses could result in breaches of contracts with our customers. Failure
to adhere to the regulations that govern our business could result in we being unable to effectively perform our services.
Our
customers' business operations are subject to certain rules and regulations in China or elsewhere. Our customers may contractually
require that we perform our services in a manner that would enable them to comply with such rules and regulations. Failure to perform
our services in such manner could result in breaches of contract with our customers and, in some limited circumstances, civil fines and
criminal penalties for us. In addition, we are required under various Chinese laws to obtain and maintain permits and licenses to conduct
our business. If we do not maintain our licenses or other qualifications to provide our services, we may not be able to provide services
to existing customers or be able to attract new customers and could lose revenues, which could have a material adverse effect on our
business and results of operations.
If
our new enhancements to our services do not achieve sufficient market acceptance, our financial results and competitive position will
suffer.
We
spend substantial amounts of time and money to research and develop new enhancements of our services to incorporate additional features,
improve functionality or other enhancements in order to meet our customers' rapidly evolving demands. When we develop an enhancement
to our services, we typically incur expenses and expend resources upfront to develop, market and promote the new enhancements. Therefore,
when we develop and introduce new enhancements to our services, they must achieve high levels of market acceptance in order to justify
the amount of our investment in developing and bringing them to market. If our new enhancements to our services do not garner widespread
market adoption and implementation, our growth prospects, future financial results and competitive position could suffer.
If
we cause disruptions to our customers' businesses or provide inadequate service, our customers may have claims for substantial
damages against us, and as a result our profits may be substantially reduced.
If
we make errors in the course of delivering services to our customers or fail to consistently meet service requirements of a customer,
these errors or failures could disrupt the customer's business, which could result in a reduction in our net revenues or a claim
for substantial damages against us. In addition, a failure or inability to meet a contractual requirement could seriously damage our
reputation and affect our ability to attract new business.
The
services we provide are often critical to our customers' businesses. We generally provide customer support after our customized
application is delivered. Certain of our customer contracts require us to comply with security obligations including maintaining system
security, ensuring our system is virus-free, maintaining business continuity procedures, and verifying the integrity of employees that
work with our customers by conducting background checks. Any failure in a customer's system or breach of security relating to the
services we provide to the customer could damage our reputation or result in a claim for substantial damages against us. Any significant
failure of our systems could impede our ability to provide services to our customers, have a negative impact on our reputation, cause
us to lose customers, reduce our revenues and harm our business.
9
Unauthorized
disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services
could expose us to liability, protracted and costly litigation and damage our reputation.
Our
business involves the collection, storage, processing and transmission of customers' business data. An increasing number of organizations,
including large merchants and businesses, other large technology companies, financial institutions and governmental institutions, have
disclosed breaches of their information technology systems, some of which have involved sophisticated and highly targeted attacks, including
on portions of their websites or infrastructure. We could also be subject to breaches of security by hackers. Threats may derive from
human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Concerns
about security are increased when we transmit information. Electronic transmissions can be subject to attacks, interceptions or losses.
Also, computer viruses and malware can be distributed and spread rapidly over the internet and could infiltrate our systems or those
of our associated participants, which can impact the confidentiality, integrity and availability of information, and the integrity and
availability of our products, services and systems, among other effects. Denial of services or other attacks could be launched against
us for a variety of purposes, including interfering with our services or creating a diversion for other malicious activities. These types
of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation,
force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liabilities, subject us to lawsuits,
fines or sanctions, distract our management or increase our costs of business operations.
Our
encryption of data and other protective measures may not prevent unauthorized access or use of sensitive data. A breach of our system
or that of one of our associated participants may subject us to material losses or liabilities. A misuse of such data or a cybersecurity
breach could harm our reputation and deter customers from using our products and services, thus reducing our revenue. In addition, any
such misuse or breach could cause us to incur costs to correct the breaches or failures, expose us to uninsured liability, increase our
risk of regulatory scrutiny, subject us to lawsuits, result in the imposition of material penalties and fines under applying laws or
regulations.
We
cannot assure that there are written agreements in place with every associated participant or that such written agreements will prevent
the unauthorized use, modification, destruction or disclosure of data or enable us or our customers to obtain reimbursement in the event
we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data. Any unauthorized use, modification,
destruction or disclosure of data could result in protracted and costly litigation, which could have a material adverse effect on our
business, financial condition and results of operations.
Cybersecurity
incidents are increasing in frequency and evolving in nature and include, but are not limited to, installation of malicious software,
unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of
confidential or otherwise protected information and the corruption of data. Given the unpredictability of the timing, nature and scope
of information technology disruptions, there can be no assurance that the procedures and controls that we employ will be sufficient to
prevent security breaches from occurring and we could be subject to manipulation or improper use of our systems and networks or financial
losses from remedial actions, any of which could have a material adverse effect on our business, financial condition and results of operations.
Interruptions
or performance problems associated with our technology and infrastructure may adversely affect our business, results of operations, and
financial condition.
Our
continued growth depends in part on the ability of our existing customers and new customers to access our SaaS services, at any time
and within an acceptable amount of time. We may in the future experience service disruptions, outages and other performance problems
due to a variety of factors, including infrastructure changes, human or software errors or capacity constraints. In some instances, we
may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It may become increasingly
difficult to maintain and improve our performance as our SaaS services become more complex. If our services are unavailable or if our
customers are unable to access features of our services within a reasonable amount of time or at all, our business would be negatively
affected.
10
We
currently provide our
SaaS
services via designated data centers and we intend to outsource our cloud infrastructure to commercially
available cloud infrastructure as a service providers ("
IaaS
"), which can host our services. Our customers need to
be able to access our services at any time, without interruption or degradation of performance. IaaS providers run their own platforms
that we access, and we are, therefore, vulnerable to service interruptions. We expect that in the future we may experience interruptions,
delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human
or software errors, website hosting disruptions and capacity constraints. Capacity constraints could be due to a number of potential
causes including technical failures, natural disasters, fraud or security attacks. In addition, if our security, or that of IaaS providers,
is compromised, our services are unavailable or our customers are unable to use our services within a reasonable amount of time or at
all, then our business, results of operations and financial condition could be adversely affected. In some instances, we expect that
we may not be able to identify the cause or causes of these performance problems within a period of time acceptable to our customers.
It may become increasingly difficult to maintain and improve our service performance, especially during peak usage times, as the features
of our services become more complex and the usage of our services increases. Any of the above circumstances or events may harm our reputation,
cause customers to stop using our services, impair our ability to increase revenue from existing customers, impair our ability to grow
our customer base and otherwise harm our business, results of operations, and financial condition.
The
market for our BaaS (blockchain-as-a-service) services is new and unproven, which could result in limited customer adoption of our services,
limited customer retention, or weaker customer expansion.
We
currently provide our BaaS services as pilot projects on a limited basis to selected customers. While we believe that, over time, the
concept of a BaaS services will become fundamental to an organization's core operations involving global trade, the market for
BaaS services is largely unproven and is subject to a number of risks and uncertainties.
The
market for BaaS services is new and less mature than traditional on-premises software applications, and the adoption rate for BaaS services
may be slower among customers with business practices requiring highly customizable application software. Our success with BaaS services
will depend to a substantial extent on the widespread adoption of BaaS services in general, but we cannot be certain that the trend of
adoption of BaaS services will continue in the future. In particular, many organizations have invested substantial personnel and financial
resources in integrating traditional software into their businesses over time, and some may be reluctant or unwilling to migrate to BaaS.
It is difficult to predict customer adoption rates and demand for our BaaS services, the future growth rate and size of the BaaS services
market or the entry of competitive applications. The expansion of the BaaS services market depends on a number of factors, including
the cost, performance and perceived value associated with BaaS. If BaaS services do not continue to achieve market acceptance, or there
is a reduction in demand for BaaS services caused by a lack of customer acceptance, technological challenges, weakening economic conditions,
data security or privacy concerns, governmental regulations, competing technologies and services or decreases in information technology
spending, it would result in decreased revenues and our business would be adversely affected.
It
is difficult to predict our future operating results.
Our
ability to accurately forecast our future operating results is limited and subject to a number of uncertainties, including planning for
and modeling future growth. We have encountered, and will continue to encounter, risks, and uncertainties frequently experienced by growing
companies in rapidly changing industries. If our assumptions regarding these risks and uncertainties, which we use to plan our business,
are incorrect or change due to industry or market developments, or if we do not address these risks successfully, our operating results
could differ materially from our expectations and our business could suffer.
If
we have overestimated the size of our total addressable market, our future growth rate may be limited.
We
have estimated the size of our total addressable market based on data published by third parties and internally generated data and assumptions.
We have not independently verified any third-party information and cannot be assure of its accuracy or completeness. While we believe
our market size estimates are reasonable, such information is inherently imprecise. In addition, our projections, assumptions and estimates
of opportunities within our market are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including
but not limited to those described in this Annual Report. If this third-party or internally generated data prove to be inaccurate or
we make errors in our assumptions based on that data, our actual market may be more limited than our estimates. In addition, these inaccuracies
or errors may cause us to misallocate capital and other critical business resources, which could harm our business.
11
Even
if our total addressable market meets our size estimates and experiences growth, we may not continue to grow our share of the market.
Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to various risks
and uncertainties. Accordingly, the estimates of our total addressable market included in this Annual Report should not be taken as indicative
of our ability to grow our business. For more information regarding the estimates of market opportunity and the forecasts of market growth
included in this Annual Report, see "Industry Background" and "Business—Our Opportunity".
We
face intense competition from onshore and offshore software application and technology service providers, and if we are unable to compete
effectively, we may lose customers and our revenues may decline.
The
market for software application and technology services is highly competitive and we expect competition to persist and intensify. We
believe that the principal competitive factors in our markets are domain knowledge and industry expertise, breadth and depth of service
offerings, quality of the services offered, reputation and track record, marketing and selling skills, scalability of technology infrastructure
and price. In the software application and technology services market, customers tend to engage multiple service providers instead of
using an exclusive service provider, which could reduce our revenues to the extent that customers obtain services from other competing
providers. Our ability to compete also depends in part on a number of factors beyond our control, including the ability of our competitors
to recruit, train, develop and retain highly skilled professionals, the price at which our competitors offer comparable services and
our competitors' responsiveness to customer needs. Therefore, we cannot assure you that we will be able to retain our customers
while competing against such competitors. Increased competition, our inability to compete successfully against competitors, pricing pressures
or loss of market share could harm our business, financial condition and results of operations.
Our
corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity
and teamwork fostered by our culture, which could harm our business.
We
believe that our culture has been and will continue to be a key contributor to our success. We have optimized our operations in 2022
fiscal year for the anticipated growth and the number of our total employees decreased from 219 in December 2021 to 187 in December
2022. We expect to continue to adjust our workforce according to operational needs. If we do not continue to maintain our corporate culture
as we grow, we may be unable to foster the innovation, creativity, and teamwork we believe we need to support our growth. Our substantial
anticipated headcount growth and our transition from a private company to a public company may result in a change to our corporate culture,
which could harm our business.
Our
success depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely
disrupted if we lose their services.
Our
future success heavily depends upon the continued services of our senior executives and other key employees. If one or more of our senior
executives or key employees are unable or unwilling to continue in their present positions, it could disrupt our business operations,
and we may not be able to replace them easily or at all. In addition, competition for senior executives and key personnel in our industry
is intense, and we may be unable to retain our senior executives and key personnel or attract and retain new senior executive and key
personnel in the future, in which case our business may be severely disrupted, and our financial condition and results of operations
may be materially and adversely affected. If any of our senior executives or key personnel joins a competitor or forms a competing company,
we may lose customers, suppliers, know-how and key professionals and staff members to them. Also, if any of our business development
managers, who generally keep a close relationship with our customers, joins a competitor or forms a competing company, we may lose customers,
and our revenues may be materially and adversely affected. Additionally, there could be unauthorized disclosure or use of our technical
knowledge, practices or procedures by such personnel. All of our executives and key personnel have entered into employment agreements
with us that contain non-competition provisions, non-solicitation and nondisclosure covenants. However, if any dispute arises among our
executive officers, key personnel and us, such non-competition, non-solicitation and nondisclosure provisions might not provide effective
protection to us, especially in China, where most of these executive officers and key employees reside, in light of the uncertainties
with China's legal system.
12
Due
to intense competition for highly skilled personnel, we may fail to attract and retain enough sufficiently trained personnel to support
our operations; as a result, our ability to generate new business may be negatively affected and our revenues could decline.
The
software application and technology service industry rely on skilled personnel, and our success depends to a significant extent on our
ability to recruit, train, develop and retain qualified personnel, especially experienced middle and senior level management. There is
significant competition for skilled personnel, especially experienced middle and senior level management, with the skills necessary to
perform the services we offer to our customers. Increased competition for these personnel, in the software application and technology
service industry or otherwise, could have an adverse effect on us. We have established certain programs to enhance our human capital
and employee loyalty, however, a significant increase in our attrition rate could decrease our operating efficiency and productivity
and could lead to a decline in demand for our services. Additionally, failure to recruit, train, develop and retain personnel with the
qualifications necessary to fulfill the needs of our existing and future customers or to assimilate new personnel successfully could
have a material adverse effect on our business, financial condition and results of operations. Failure to retain our key personnel on
customer projects or find suitable replacements for key personnel upon their departure may lead to termination of some of our customer
contracts or cancellation of some of our projects, which could materially and adversely affect our business.
Our
profitability will suffer if we are not able to maintain our resource utilization levels and continue to improve our productivity levels.
Our
gross margin and profitability are significantly impacted by our utilization levels of human resources as well as our ability to increase
our productivity levels. We have expanded our operations in recent years through organic growth, which has resulted in a significant
increase in our headcount and fixed overhead costs. We may face difficulties maintaining high levels of utilization. Although we try
to use all commercially reasonable efforts to accurately estimate service and resource requirements from our customers, we may overestimate
or underestimate, which may result in unexpected cost and strain or redundancy of our human capital and adversely impact our utilization
levels. In addition, some of our professionals are trained to work for specific customers or on specific projects and some of our sales
are dedicated to specific customers or specific projects. Our ability to continually increase our productivity levels depends significantly
on our ability to recruit, train, develop and retain high-performing professionals and project staffs appropriately and optimize our
mix of services and delivery methods. If we experience a slowdown or stoppage of service for any customer or on any project for which
we have dedicated professionals or project staffs, we may not be able to efficiently reallocate these professionals and project staffs
to other customers and projects to keep their utilization and productivity levels high. If we are not able to maintain high resource
utilization levels without corresponding cost reductions or price increases, our profitability will suffer.
If
we are not able to maintain a strong brand for our services and increase market awareness of our Company and our services, then our business,
results of operations and financial condition may be adversely affected.
We
believe that we have a strong brand name in our industry and the continuing success of our services will depend in part on our ability
to develop and sustain a strong brand identity for our services and to increase the market awareness of our services and their capabilities.
The successful promotion of our brand will depend largely on our continuous marketing efforts and our ability to offer high quality services
to our customers. Our brand promotion activities may not be successful or produce increased revenue. In addition, independent industry
analysts may provide reviews of our services and of competing products and services, which may significantly influence the perception
of our services in the marketplace. If these reviews are negative or not as positive as reviews of our competitors' products and
services, then our brand may be harmed.
The
promotion of our brand also requires us to make substantial expenditures, and we anticipate that these expenditures will increase as
our industry becomes more competitive and as we seek to expand into new markets. These higher expenditures may not result in any increased
revenue or incremental revenue that is sufficient to offset the higher expense levels. If we do not successfully maintain and enhance
our brand, then our business may not grow, we may see our pricing power reduced relative to competitors and we may lose customers, all
of which would adversely affect our business, results of operations and financial condition.
13
We
may be unsuccessful in entering into strategic alliances or identifying and acquiring suitable acquisition candidates, which could impede
our growth and negatively affect our revenues and net income.
We
have pursued strategic alliances and intend to pursue strategic acquisition opportunities to increase our scale and geographical presence,
expand our service offerings and capabilities and enhance our industry and technical expertise. While we believe the strategic plans
that we implemented would enable us to better leverage synergies between our existing businesses and the newly expanded business, thus
improved our overall business operations, those strategic plans may not be ultimately successful. For instance, we intend to expand our
blockchain business by acquiring Smartconn Co., Limited, contribute expansion of Powerbridge's operations in digital trade ecosystem
by acquiring DTI Group Limited and develop our metaverse operation by acquiring AIedu. See "Item 4. Information on the Company—C.
History and Development of the Company" and "Item 5. Operating and Financial Review and Prospects — Recent developments."
for further information on the acquisition transactions entered into by us.
In
addition, it is possible that in the future we may not succeed in identifying suitable alliances or acquisition candidates. Even if we
identify suitable candidates, we may not be able to consummate these arrangements on terms commercially acceptable to us or to obtain
necessary regulatory approvals in the case of acquisitions. Challenges we face in the potential acquisition and integration process include:
●
integrating operations,
    services and personnel in a timely and efficient manner;
●
unforeseen or undisclosed
    liabilities;
●
generating sufficient revenue
    and net income to offset acquisition costs;
●
potential loss of, or harm
    to, employee or customer relationships;
●
properly structuring our
    acquisition consideration and any related post-acquisition earn-outs and successfully monitoring any earn-out calculations and payments;
●
retaining key senior management
    and key sales and marketing and research and development personnel;
●
potential incompatibility
    of solutions, services and technology or corporate cultures;
●
consolidating and rationalizing
    corporate, information technology and administrative infrastructures;
●
integrating and documenting
    processes and controls;
●
entry into unfamiliar markets;
    and
●
increased complexity from
    potentially operating in geographically dispersed sites, particularly if we acquire a company or business with facilities or operations
    outside of China.
Furthermore,
many of our competitors are likely to enter into similar arrangements or acquire the same targets that we are looking to enter into or
acquire. Such competitors may have substantially greater financial resources than we do and may be more attractive to our strategic partners
or be able to outbid us for the acquisition targets. In addition, we may also be unable to timely deploy our existing cash balances to
effect a potential acquisition, as use of cash balances located onshore in China may require specific governmental approvals or result
in withholding and other tax payments. To the extent cash is located in the PRC, Hong Kong or Macau or within a PRC, Hong Kong or Macau
domiciled entity and may need to be used outside of the PRC, Hong Kong or Macau, the funds may not be available due to limitations placed
on us by the PRC government. If we are unable to enter into suitable strategic alliances or complete suitable acquisitions, our growth
strategy may be impeded and our revenues and net income could be negatively affected.
Some
of our technology incorporates "open source" software, which could negatively affect our ability to sell our services and
subject us to possible litigation.
Some
aspects of our technology platforms from which we develop our services, are built using open-source software, and we intend to continue
to use open-source software in the future. The terms of certain open-source licenses to which we are subject have not been interpreted
by U.S., China or foreign courts, and there is a risk that open-source software licenses could be construed in a manner that imposes
unanticipated conditions or restrictions on our ability to monetize our services. Additionally, we may from time to time face claims
from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that we developed using
such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open-source
license. These claims could result in litigations and could require us to make our software source code freely available, purchase a
costly license or cease offering the implicated services unless and until we can re-engineer them to avoid infringement. This re-engineering
process could require significant additional research and development resources, and we may not be able to complete it successfully.
In addition to the risks related to license requirements, use of certain open-source software can lead to greater risks than use of third-party
commercial software, as open source licensors generally do not provide warranties or controls on the origin of software. Any of these
risks could be difficult to eliminate or manage, and if not addressed, could have a negative effect on our business, results of operations
and financial condition.
14
We
may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through
our employees or otherwise.
We
are typically required to manage, utilize and store sensitive or confidential customer data in connection with the services that we provide.
Under the terms of our customer contracts, we are required to keep such information strictly confidential. We use system and network
security technologies and other methods to protect sensitive and confidential customer data. We also require our employees and subcontractors
to enter into confidentiality agreements to limit access to and distribution of our customers' sensitive and confidential information
as well as our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequate to protect our
customers' confidential information. If our customers' proprietary rights are misappropriated by our employees or our subcontractors
or their employees, in violation of any applicable confidentiality agreements or otherwise, our customers may consider us liable for
those acts and seek damages and compensation from us. Any such acts could cause us to lose existing and future business and damage our
reputation in the market. In addition, we currently do not have any insurance coverage for mismanagement or misappropriation of such
information by our subcontractors or employees. Any litigations with respect to unauthorized disclosure of sensitive and confidential
information might result in substantial costs and diversion of resources and management attention.
We
may not be able to prevent others from unauthorized use of our intellectual property, which could cause a loss of customers, reduce our
revenues and harm our competitive position.
We
rely on a combination of patent, copyright, trademark, software registration, anti-unfair competition and trade secret laws, as well
as confidentiality agreements and other methods to protect our intellectual property rights. To protect our trade secrets and other proprietary
information, employees, customers, subcontractors, consultants, advisors and collaborators are required to enter into confidential agreements.
These agreements might not provide effective protection for the trade secrets, know-how or other proprietary information in the event
of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. Implementation
of intellectual property related laws in China has historically been lacking, primarily because of ambiguities in the PRC laws and difficulties
in enforcement. Accordingly, intellectual property rights and confidentiality protections in China may not be as effective as those in
the United States or other developed countries, and infringement of intellectual property rights continues to pose a serious risk of
doing business in China. Our patent applications may not issue as patents or may not issue as patents that provide meaningful protection
against third parties. Policing unauthorized use of proprietary technology is difficult and expensive. The steps we have taken may be
inadequate to prevent the misappropriation of our proprietary technology. Reverse engineering, unauthorized copying, other misappropriation,
or negligent or accidental leakage of our proprietary technologies could enable third parties to benefit from our technologies without
obtaining our consent or paying us for doing so, which could harm our business and competitive position. Though we are not currently
involved in any litigation with respect to intellectual property, we may need to enforce our intellectual property rights through litigations.
Litigations relating to our intellectual property may not prove successful and might result in substantial costs and diversion of resources
and management attention.
We
may face intellectual property infringement claims that could be time-consuming and costly to defend. If we fail to defend ourselves
against such claims, we may lose significant intellectual property rights and may be unable to continue providing our existing services.
Our
success largely depends on our ability to use and develop our technology and services without infringing the intellectual property rights
of third parties, including copyrights, trade secrets and trademarks. We may be subject to litigations involving claims of violation
of other intellectual property rights of third parties. The holders of other intellectual property rights potentially relevant to our
service offerings may make it difficult for us to acquire a license on commercially acceptable terms. Also, we may be unaware of intellectual
property registrations or applications relating to our services that may give rise to potential infringement claims against us. There
may also be technologies licensed to and relied on by us that are subject to infringement or other corresponding allegations or claims
by third parties which may damage our ability to rely on such technologies. We are subject to additional risks as a result of our recent
and proposed acquisitions and the hiring of new employees who may misappropriate intellectual property from their former employers. Parties
making infringement claims may be able to obtain an injunction to prevent us from delivering our services or using technology involving
the allegedly infringing intellectual property. Intellectual property litigation is expensive and time-consuming and could divert management's
attention from our business. A successful infringement claim against us, whether with or without merit, could, among others things, require
us to pay substantial damages, develop non-infringing technology, or re-brand our name or enter into royalty or license agreements that
may not be available on acceptable terms, if at all, and cease making, licensing or using products that have infringed a third party's
intellectual property rights. Protracted litigation could also result in existing or potential customers deferring or limiting their
purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringement
claims in certain instances. Any intellectual property claims or litigation in this area, whether we ultimately win or lose, could damage
our reputation and have a material adverse effect on our business, results of operations or financial condition.
15
We
use third-party licensed software in or with our services, and the inability to maintain these licenses or errors in the software services
we provide could result in increased costs or reduced service levels, which would adversely affect our business.
Our
services incorporate certain third-party software obtained under licenses from other companies. We anticipate that we will continue to
rely on such third-party software and development tools in the future. Such third-party companies may discontinue their products, go
out of business or otherwise cease to make support available for such third-party software. Although we believe that there are commercially
reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or
costly to replace. In addition, integration of the software used in our services with new third-party software may require significant
work and substantial investment of our time and resources. Also, to the extent that our services depends upon the successful operation
of third-party software in conjunction with our software, any undetected errors or defects in such third-party software could prevent
the deployment or impair the functionality of our services, delay new feature introductions, result in a failure of our services and
injure our reputation. Our use of additional or alternative third-party software would require us to enter into license agreements with
third parties. In the event that we are not able to maintain our licenses to third-party software, or cannot obtain licenses to new software
as needed to enhance our services, our business and results of operations may be adversely affected.
We
may need additional capital and any failure by us to raise additional capital on terms favorable to us, or at all, could limit our ability
to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.
We
believe that our current cash and cash flow from operations would be sufficient to meet our anticipated cash needs for at least the next
12 months from the date of this Annual Report. However, in order to capitalize on the growing needs of the Company, we intend to expand
to capture additional market shares. Thus, we may however, require additional cash resources for our research and development, sales
and market and potential strategic alliances and acquisitions. If these cash resources are insufficient to satisfy our cash requirements,
we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could
result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require
us to agree to operating and financing covenants that would restrict our operations. Our ability to obtain additional capital on acceptable
terms is subject to a variety of uncertainties, including:
●
investors' perception
    of, and demand for, securities of technology services outsourcing companies;
●
conditions of the U.S.
    and other global markets in which we may seek to raise funds;
●
our future results of operations
    and financial condition;
●
PRC government regulation
    of foreign investment in China;
●
economic, political and
    other conditions in China; and
●
PRC government policies
    relating to the borrowing and remittance outside China of foreign currency.
In
the event that we are in need of additional financing, such financing may not be available in amounts or on terms acceptable to us, if
at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to grow our business
and develop or enhance our solution and service offerings to respond to market demand or competitive challenges.
Failure
to comply with anti-bribery, anti-corruption, and anti-money laundering laws could subject us to penalties and other adverse consequences.
We
are subject to anti-corruption, anti-bribery and anti-money laundering laws in China and various other jurisdictions. From time to time,
we leverage third party partners and intermediaries, including channel partners, to sell our services. We and our third-party intermediaries
may have direct or indirect interactions with officials and employees of governmental agencies or state-owned or affiliated organizations
and may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees,
representatives, contractors, channel partners, and agents, even if we do not explicitly authorize such activities. While we have policies
and procedure to address compliance with such laws, we cannot assure you that all of our employees and agents will not take actions in
violation of our policies and applicable law, for which we may be ultimately held responsible. Any violation of the applicable anti-bribery,
anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations,
severe criminal or civil sanctions, or suspension or debarment from government contracts, all of which may have an adverse effect on
our reputation, business, operating results and prospects.
16
Fluctuation
in the value of the Renminbi and other currencies may have a material adverse effect on the value of your investment.
Our
financial statements are expressed in U.S. dollars. However, a majority of our revenues and expenses are denominated in Renminbi. Our
exposure to foreign exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies
of each entity. We do not believe that we currently have any significant direct foreign exchange risk and have not hedged exposures denominated
in foreign currencies or any other derivative financial instruments. However, the value of your investment in our Ordinary Shares will
be affected by the foreign exchange rate between U.S. dollars and RMB because the primary value of our business is effectively denominated
in RMB, while the Ordinary Shares will be traded in U.S. dollars.
The
value of the 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. The People's Bank of China regularly intervenes in the foreign
exchange market to limit fluctuations in RMB exchange rate and achieve certain exchange rate targets, and through such intervention kept
the U.S. dollar-RMB exchange rate relatively stable.
As
we may rely on dividends paid to us by our PRC subsidiaries and branches, any significant revaluation of the RMB may have a material
adverse effect on our revenues and financial condition, and the value of any dividends payable on our Ordinary Shares in foreign currency
terms. For example, to the extent that we need to convert U.S. dollars we received from offerings into for our operations, appreciation
of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we received from the conversion. Conversely, 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. Furthermore,
appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S.
dollar terms without giving effect to any underlying change in our business or results of operations. We cannot predict the impact of
future exchange rate fluctuations on our results of operations and may incur net foreign exchange losses in the future. In addition,
our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert into foreign
currencies.
Adverse
developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance
by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our
financial condition and results of operations.
Adverse
developments that affect financial institutions, transactional counterparties or other third parties, or concerns or rumours about any
events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example,
on March 10, 2023, Silicon Valley Bank ("SVB") was closed by the California Department of Financial Protection and Innovation,
which appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. Similarly, on March 12, 2023, Signature Bank
and Silvergate Capital Corp. were each swept into receivership. The U.S. Department of the Treasury, the Federal Reserve and the FDIC
released a statement that indicated that all depositors of SVB would have access to all of their money after only one business day of
closure, including funds held in uninsured deposit accounts.
Inflation
and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest
rates below current market interest rates. Although the U.S. Department of Treasury, FDIC and Federal Reserve Board have announced a
program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial
institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or
other liquidity needs of financial institutions for immediately liquidity may exceed the capacity of such program. There is no guarantee
that the U.S. Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event
of the closure of other banks or financial institutions, or that they would do so in a timely fashion.
Although
we currently neither holds bank accounts in nor has banking relationship with the SVB, Signature Bank and Silvergate Capital Corp, there
are factors that could adversely affect us, including, among others, events such as liquidity constraints or failures, the ability to
perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the
financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial
services industry. These factors could involve financial institutions or financial services industry companies with which we have financial
or business relationships but could also include factors involving financial markets or the financial services industry generally.
In
addition, widespread investor concerns regarding the U.S. or international financial systems could result in less favourable commercial
financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access
to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline
in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our
operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations
or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors
described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our
current and/or projected business operations and financial condition and results of operations.
Moreover,
a partner or supplier could be adversely affected by any of the liquidity or other risks that are described above as factors that could
result in material adverse impacts on the Company, including but not limited to delayed access or loss of access to uninsured deposits
or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution. Any partner or supplier
bankruptcy or insolvency, or the failure of any partner to make payments when due, or any breach or default by a partner or supplier,
or the loss of any significant supplier relationships, may have a material adverse impact on our business.
17
As
we plan to expand internationally, our business will become more susceptible to risks associated with international operations.
Historically,
we have generated all of our revenue from customers in PRC. We plan to expand our market coverage internationally, with a focus on B&R
countries, including countries in Asia and Eastern Europe, Middle East, Africa and South America. Conducting international operations
subjects us to risks that we have not generally faced in the PRC. These risks include:
●
challenges caused by distance,
    language, cultural and ethical differences and the competitive environment;
●
heightened risks of unethical,
    unfair or corrupt business practices, actual or claimed, in certain geographies and of improper or fraudulent sales arrangements
    that may impact financial results and result in restatements of, and irregularities in, financial statements;
●
application of multiple
    and conflicting laws and regulations, including complications due to unexpected changes in foreign laws and regulatory requirements;
●
risks associated with trade
    restrictions and foreign import requirements, including the importation, certification and localization of our solutions required
    in foreign countries, as well as changes in trade, tariffs, restrictions or requirements;
●
new and different sources
    of competitions;
●
potentially different pricing
    environments, longer sales cycles and longer accounts receivable payment cycles and collections issues;
●
management communication
    and integration problems resulting from cultural differences and geographic dispersion;
●
greater difficulty in enforcing
    contracts, accounts receivable collection and longer collection periods;
●
the uncertainty and limitation
    of protection for intellectual property rights in some countries;
●
increased financial accounting
    and reporting burdens and complexities;
●
lack of familiarity with
    locals laws, customs and practices, and laws and business practices favoring local competitors or partners;
●
uncertainties in global
    economy and foreign markets caused by COVID-19; and
●
political, social and economic
    instability abroad, terrorist attacks and security concerns in general.
Any
of these risks could adversely affect our business. For example, compliance with laws and regulations applicable to our international
operations increases our cost of doing business in foreign jurisdictions. We may be unable to keep pace with changes in government requirements
as they change from time to time. Failure to comply with these regulations could have adverse effects on our business. In addition, in
many foreign countries it is common for others to engage in business practices that are prohibited by our internal policies and procedures
or applicable PRC laws and regulations. As we grow, we continue to implement compliance procedures designed to prevent violations of
these laws and regulations. There can be no assurance that all of our employees, contractors, resellers, and agents will comply with
the formal policies we will implement, or applicable laws and regulations. Violations of laws or key control policies by our employees,
contractors, resellers, or agents could result in delays in revenue recognition, financial reporting misstatements, fines, penalties,
or the prohibition of the import or export of our software and services, and could have a material adverse effect on our business and
results of operations.
Further,
our limited experiences in operating our business internationally increases the risk that any potential future expansion efforts that
we may undertake will not be successful. If we invest substantial time and resources to expand our international operations and are unable
to do so successfully, or in a timely manner, our business and results of operations will suffer.
18
Our
international operations may subject us to potential adverse tax consequences.
We
plan to expand our international operations and staff to better support our growth into international markets. Our corporate structure
and associated transfer pricing policies contemplate future growth into the international markets, and consider the functions, risks
and assets of the various entities involved in the intercompany transactions. The amount of taxes we pay in different countries
and jurisdictions may depend on the application of the tax laws of the various countries and jurisdictions, including the United States,
to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies
and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing
authorities of the countries and jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions
pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific
jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional
taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall
profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.
As
we plan to participate in retail and distribution of cryptocurrency mining machines, we've entered into certain customized servers
purchase agreement. The demand of our cryptocurrency mining machines is affected by the market of cryptocurrency. Substantial increases
in the supply of mining machines connected to the certain cryptocurrency network would lead to an increase in network capacity, which
in turn would increase mining difficulty. This development would negatively affect the economic returns of cryptocurrency mining activities,
which would decrease the demand for and/or pricing of our products.
The
difficulty of cryptocurrency mining, or the amount of computational resources required for a set amount of reward for recording a new
block, directly affects the expected economic returns for cryptocurrency miners, which in turn affects the demand for our cryptocurrency
mining machines. Cryptocurrency mining difficulty is a measure of how much computing power is required to record a new block and it is
affected by the total amount of computing power in the cryptocurrency network. For example, the Bitcoin algorithm is designed so that
one block is generated, on average, every ten minutes, no matter how much computing power is in the network. Thus, as more computing
power joins the network, and assuming the rate of block creation does not change (remaining at one block generated every ten minutes),
the amount of computing power required to generate each block and hence the mining difficulty increases. In other words, based on the
current design of the Bitcoin network, Bitcoin mining difficulty would increase together with the total computing power available in
the Bitcoin network, which is in turn affected by the number of Bitcoin mining machines in operation. Additionally, the amount of Bitcoin
awarded for solving each block is designed to decline approximately every four years, with the most recent halving event occurred in
May 2020. As a result, a strong growth in sales of our cryptocurrency mining machines can contribute to further growth in the total computing
power in the network, thereby driving up the difficulty of cryptocurrency mining and coupled with the decrease in cryptocurrency reward,
resulting in downward pressure on the expected economic return of cryptocurrency mining and the demand for, and pricing of, our products,
under the assumption that the price of cryptocurrency does not increase enough.
Cryptocurrency
exchanges and wallets, and to a lesser extent, the cryptocurrency network itself, may suffer from hacking and fraud risks, which may
adversely erode user confidence in cryptocurrency which would decrease the demand for our cryptocurrency mining machines.
Cryptocurrency
transactions are entirely digital and, as with any virtual system, are at risk from hackers, malware and operational glitches. Hackers
can target cryptocurrency exchanges and transactions, to gain access to thousands of accounts and digital wallets where cryptocurrency
are stored. Cryptocurrency transactions and accounts are not insured by any type of government program and all cryptocurrency transactions
are permanent because there is no third party or payment processor. Cryptocurrency has suffered from hacking and cyber-theft as such
incidents have been reported by several cryptocurrency exchanges and miners, highlighting concerns about the security of cryptocurrency
and therefore affecting its demand and price. Also, the price and exchange of cryptocurrency may be affected due to fraud risk. While
cryptocurrency uses private key encryption to verify owners and register transactions, fraudsters and scammers may attempt to sell false
cryptocurrency. All of the above may adversely affect the operation of the cryptocurrency network which would erode user confidence in
cryptocurrency, which would negatively affect demand for our products.
We
face intense competition and our competitors may employ aggressive pricing strategies, which can lead to a price reduction of our products
and material adverse effect on our results of operations.
We
may look to enter into markets with very competitive landscapes. Our competitors include many well-known domestic and international players,
and we face competitors that are larger than us and have advantages over us in terms of economies of scale and financial and other resources.
We expect that competition in our markets will continue to be intense, as we compete not only with existing players that have been focusing
on cryptocurrency mining or AI, but also new entrants that include well-established players in the semiconductor industry, or players
who have not been predisposed to this industry in the past. Some of these competitors may also have stronger brand names, greater access
to capital, longer histories, longer relationships with their suppliers or customers and more resources than we do. Furthermore, these
competitors may be able to adapt to changes in the industry more promptly and efficiently. Intense competition from existing and potential
competitors could result in material price reductions in the products we sell or a decrease in our market share. Aggressive pricing strategies
by our competitors and an abundant supply of cryptocurrency mining machines or AI products in the market may cause us to reduce the prices
of our products and also negatively affect the demand for our products or harm our profitability. If we fail to compete effectively and
efficiently or fail to adapt to changes in the competitive landscape, our business, financial condition and results of operations may
be materially and adversely affected.
19
Our
Cryptocurrency mining machine business depends on supplies from limited numbers of third-party foundry partners, and any failure to obtain
sufficient foundry capacity from these third-party foundry partners would significantly delay the shipment of our products.
As
we rely on limited numbers of third-party foundry partners, we cannot guarantee that they will be able to meet our manufacturing requirements.
The ability of our third-party foundry partners to provide us with foundry services is limited by their technology migration, available
capacity, existing obligations and global semiconductor supply. In particular, we have experienced a global shortage in semiconductors
beginning 2021, which may have adversely impacted the production activity and capacity of our third-party foundry partners. If these
third-party foundry partners fail to succeed in their technology migration or secure enough semiconductors, they will not be able to
deliver to us qualified products in a sufficient amount, which will significantly affect our technological advancement and shipment of
cryptocurrency mining machines. This could in turn result in lost sales and have a material adverse effect on our relationships with
our customers and on our business and financial condition.
In
addition, we do not have a guaranteed level of production capacity from our third-party foundry partners. We do not have long-term contracts
with them, and we source our supplies on a purchase order basis and prepay the purchase amount. As a result, we depend on our third-party
foundry partners to allocate to us a portion of their manufacturing capacity sufficient to meet our needs, to produce products of acceptable
quality and at acceptable final test yields and to deliver those products to us on a timely basis and at acceptable prices. If our third-party
foundry partners raise their prices or are unable to meet our required capacity for any reason, such as shortages or delays in the shipment
of semiconductor equipment, or if our business relationships with them deteriorate, we may not be able to obtain the required capacity
and would have to seek alternative foundries, which may not be available on commercially reasonable terms, or at all. Moreover, it is
possible that other customers of our third-party foundry partners that are larger and/or better financed than we are, or that have long-term
contracts with them, may receive preferential treatment in terms of capacity allocation or pricing. In addition, if we do not accurately
forecast our capacity needs, our third-party foundry partners may not have available capacity to meet our immediate needs or we may be
required to pay higher costs to fulfill those needs, either of which could materially and adversely affect our business, operating results
or financial condition.
Other
risks associated with our dependence on a few third-party foundry partners include limited control over delivery schedules and quality
assurance, lack of capacity in periods of excess demand, unauthorized use of our intellectual property and limited ability to manage
inventory and parts.
Moreover,
if any of our third-party foundry partners suffers any damage to its facilities, suspends manufacturing operations, loses benefits under
material agreements, experiences power outages or computer virus attacks, lacks sufficient capacity to manufacture our products, encounters
financial difficulties, is unable to secure necessary raw materials from its suppliers or suffers any other disruption or reduction in
efficiency, we may encounter supply delays or disruptions.
Failure
to maintain inventory levels of our cryptocurrency mining machines in line with the approximate level of demand for our products could
cause us to lose sales, expose us to increased inventory risks and subject us to increases in holding costs, risk of inventory obsolescence,
increases in markdown allowances and write-offs, any of which could have a material adverse effect on our business, financial condition
and results of operations.
To
operate our business successfully and meet our customers' demands and expectations, we must maintain a certain level of finished
goods inventory to ensure immediate delivery when required. Furthermore, we are required to maintain an appropriate level of inventory
of parts and components for our production. However, forecasts are inherently uncertain. If our forecasted demand is lower than actual
demand, we may not be able to maintain an adequate inventory level of our finished goods or produce our products in a timely manner,
and we may lose sales and market share to our competitors. On the other hand, we may also be exposed to increased inventory risks due
to accumulated excess inventory of our products or raw materials, parts and components for our products. Excess inventory levels may
lead to increases in inventory holding costs, risks of inventory obsolescence and write-down.
20
The
average selling prices of our cryptocurrency mining may decrease from time to time due to technological advancement and we may not be
able to pass onto our suppliers such decreases, which may in turn adversely affect our profitability.
The
cryptocurrency mining industry is characterized by quick launches of new products, continuous technological advancements and changing
market trends and customer preferences, all of which translate to a shorter life cycle and a gradual decrease in the average selling
prices of products over time. There are no assurances that we will be able to pass on any decrease in average selling prices of our products
to our suppliers. In the event that average selling prices of our products unusually or significantly decrease, and such decreases cannot
be offset by a corresponding decrease in the prices of the principal components of our products, our gross profit margins may be materially
and adversely affected, which in turn, may adversely affect our profitability.
Shortages
in, or increases in the prices of, the components of our cryptocurrency mining machines may adversely affect our business.
The
components used for cryptocurrency mining machines include printed circuit board, other electronic components, fans and aluminum casings.
The use of our Bitcoin mining machines also requires certain ancillary equipment and components such as controllers, power adaptors and
connectors. The production of our current cryptocurrency mining machines depends on obtaining adequate supplies of these components on
a timely basis and at competitive prices. We do not typically maintain large inventories of components, but rather we purchase them on
a just-in-time basis to satisfy our quality standards and meet our volume requirements. Given the long lead times that may be required
to manufacture, assemble and deliver certain components and products, problems could arise in planning production and managing inventory
levels that could seriously interrupt our operations, including the possibility of defective parts, an increase in component costs, delays
in delivery schedules, and shortages of components. Furthermore, we may have to turn to less reputable suppliers if we cannot source
adequate components from our regular supplier. Under such circumstances, the quality of the components may suffer and could cause performance
issues in our cryptocurrency mining machines.
Shortages
of components could result in reduced production or delays in production, as well as an increase in production costs, which may negatively
affect our abilities to fulfill orders or make timely shipments to customers, as well as our customer relationships and profitability.
Component shortages may also increase our costs of revenue because we may be required to pay higher prices for components in short supply,
not being able to pass such costs to customers, and redesign or reconfigure products to accommodate substitute components.
Risks
that may be encountered during the transportation of cryptocurrency mining machines
Physical
damage during shipping: cryptocurrency mining machines are delicate pieces of equipment that can be easily damaged during shipping. Factors
such as rough handling, temperature changes, and vibration can cause damage to the hardware.
Theft
or loss during shipping: cryptocurrency mining machines are valuable and can be a target for theft during shipping. In some cases, they
can also be misplaced or lost during the shipping process.
21
Improper
packaging: cryptocurrency mining machines require specialized packaging to ensure their safety during shipping. Failure to properly package
cryptocurrency mining machines can increase the risk of damage during transport.
Inadequate
storage conditions: cryptocurrency mining machines require specific storage conditions, including temperature and humidity control, to
maintain their performance and lifespan. Failure to store cryptocurrency mining machines under optimal conditions can lead to hardware
failure and increased downtime.
Fire
or water damage: Fire or water damage can be catastrophic to cryptocurrency mining machines and result in significant data loss. Proper
fire suppression systems and measures to prevent water damage should be in place to minimize these risks.
Risks
like cryptocurrency mining machines storage, overhaul, operation, and maintenance may occur:
Equipment
failure: Machines that are not properly stored, overhauled, operated, or maintained can lead to equipment failure, which can be dangerous
for operators and other individuals nearby.
Inadequate
training: Operators and maintenance personnel who are not properly trained may not know how to properly operate, maintain, or overhaul
machines, which can increase the risk of equipment failure or accidents.
Improper
storage: Machines that are not stored properly, such as in a location that is too hot, cold, humid, or dusty, can be damaged or degraded
over time, leading to equipment failure or decreased performance.
Poor
maintenance: Failure to properly maintain machines, such as by not performing regular inspections, cleaning, lubrication, or repairs,
can lead to equipment failure, decreased performance, or shortened machines lifespan.
Lack
of safety protocols: Inadequate safety protocols, such as not using appropriate personal protective equipment or not following proper
lockout/tagout procedures, can increase the risk of accidents and injuries during machine operation or maintenance.
Improper
overhaul: Overhauling machines improperly, such as by not replacing worn or damaged parts or not properly reassembling the machines,
can lead to equipment failure or decreased performance.
Aging
machines: Machines that are not regularly replaced or updated can become outdated or obsolete, increasing the risk of failure or decreased
performance.
Environmental
factors: Exposure to environmental factors, such as extreme heat or cold, moisture, or corrosive substances, can damage our machines
and lead to failure or decreased performance.
Inadequate
inspections: Failure to perform regular inspections, such as non-destructive testing or visual inspections, can lead to failure or decreased
performance.
Human
error: Human error during equipment storage, overhaul, operation, or maintenance, such as misreading instructions, using incorrect tools
or materials, or skipping steps in a procedure, can lead to failure or accidents.
22
We
may need additional capital and we may not be able to obtain it, which could adversely affect our liquidity and financial position.
We
believe that our current cash and cash equivalents and cash flow from operations will be sufficient to meet our anticipated cash needs
including for working capital and capital expenditures, for the foreseeable future. We may, however, require additional cash resources
due to changed business conditions or other future developments. If these sources are insufficient to satisfy our cash requirements,
we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of convertible debt securities or additional
equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt
service obligations and could result in operating and financing covenants that would restrict our operations and liquidity.
Our
ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:
●
investors' perception
    of, and demand for, securities of alternative advertising media companies;
●
conditions of the U.S.
    and other capital markets in which we may seek to raise funds;
●
our future results of operations,
    financial condition and cash flows;
●
PRC governmental regulation
    of foreign investment in advertising services companies in China;
●
economic, political and
    other conditions in China; and
●
PRC governmental policies
    relating to foreign currency borrowings.
We
cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional
funds on terms favorable to us could have a material adverse effect on our liquidity and financial condition.
23
We
do not maintain any business liability disruption or litigation insurance coverage for our operations, and any business liability, disruption
or litigation we experience might result in our incurring substantial costs and the diversion of resources.
While
business disruption insurance is available to a limited extent in China, we have determined that the risks of disruption, cost of such
insurance and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to
have such insurance. As a result, we do not have any business liability, disruption or litigation insurance coverage for our operations
of advertising and media business in China. Any business disruption or litigation may result in incurring substantial costs and the diversion
of our resources.
Any
negative publicity with respect to us in general or our partners may materially and adversely affect our reputation, business and results
of operations.
Complaints,
litigation, regulatory actions or other negative publicity that arise from the advertising industry in general or our company in particular,
including on the quality, effectiveness and reliability of privacy and security practices, and advertising content, even if inaccurate,
could adversely affect our reputation and client confidence in, and the use of, our solutions. Harm to our reputation and client confidence
can also arise for many other reasons, including employee misconduct, misconduct of our data and content distribution channel partners,
data center providers or other counterparties, failure by these persons or entities to meet minimum quality standards or otherwise fulfill
their contractual obligations or to comply with applicable laws and regulations. Additionally, negative publicity with respect to our
data or content distribution channel partners could also affect our business and results of operation to the extent that we rely on these
partners or if marketers or marketing agencies associate our company with such partners.
If
we fail to promote or maintain our brand in a cost-efficient manner, our business and results of operations may be harmed.
We
believe that developing and maintaining awareness of our brand in a cost-effective manner is critical to achieving widespread acceptance
of our platforms, and is an important element in attracting new clients and partners. Furthermore, we believe that the importance of
brand recognition will increase as competition in our market increases. Successful promotion of our brand will depend largely on our
ability to deliver value propositions to marketers and on the effectiveness of our marketing efforts. If we fail to successfully promote
and maintain our brand, or incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract
enough new clients or retain our existing clients, thus our business and results of operations can be materially and adversely affected.
We
may need additional capitals for our business and future sales of our ordinary shares could cause the market price of our ordinary shares
to decline.
Sales
of a substantial number of shares of our ordinary shares in the public market, or the perception that these sales could occur, may
depress the market price for our ordinary shares. These sales could also impair our ability to raise additional capital through the
sale of our equity securities in the future. We may issue additional ordinary shares in the future and our shareholders may elect to
sell large numbers of shares held by them from time to time. Our amended and restated memorandum and articles of association
authorize us to issue up to 300,000,000 ordinary shares.
In
March 2021, we filed with the SEC prospectus to issue and sell, in an at-the-market ("ATM") offering through
A.G.P./Alliance Global Partners, ordinary shares having an aggregate offering price of up to $30 million.  From March 22, 2021
through May 14, 2021, we issued and sold 1,626,327 ordinary shares through the ATM offering for net proceeds of approximately $5.1
million, and we issued and sold 56,800 ordinary shares through the ATM offering for net proceeds of approximately $0.1 million in
fiscal year 2022. The ATM offering was terminated by us on Feb 13, 2023. On February 22, 2022, an aggregate of 17,138,305 Ordinary
Shares was issued upon the closing of the First SmartConn Acquisition. On April 20, 2022, Powerbridge Zhuhai entered into an equity
purchase agreement with the Shenzhen Chenbao Information Service Co., Ltd. ("Chenbao"), pursuant to which the Company
agrees to acquire 5% equity interests (the "Acquired Interests") of the outstanding equity interests of Chenbao for an
aggregate purchase price of US$2.35 million, which shall be paid as follows: (i) US$0.47 million in cash; and (ii) 5,756,481 shares
of the Company. On September 1, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC,
pursuant to which the Company issued Streeterville Capital, LLC an unsecured convertible promissory note on September 1, 2022 in the
original principal amount of $8,640,000, convertible into ordinary shares, $0.00166667 par value per share, of the Company. On
September 1, 2022, the Company entered into a share purchase agreement (the "White Lion Agreement") with White Lion
Capital LLC, a Nevada limited liability company, which provides that, upon the terms and subject to the conditions and limitations
set forth therein, White Lion Capital is committed to purchase our ordinary shares, $0.00166667 par value per share, with an
aggregate offering price of up to $15,000,000. On September 9, 2022, the Company entered into a Standby Equity Purchase Agreement
(the "Standby Agreement") with YA II PN, Ltd. Pursuant to the Standby Agreement, the Company will be able to issue and
sell up to $30,000,000 of its ordinary shares, par value of US$ 0.00166667 per share, at the Company's sole option, any time
during the three-year period following the execution date of the Standby Agreement subject to certain limitations. On December 16,
2022, the Company entered into an equity transfer agreement (the "Second Boxinrui Acquisition") with 14 shareholders of
Boxinrui in which the Company agreed to purchase 20% of the equity interest of Boxinrui for the aggregated total consideration of
RMB48,206,973, which shall be settled by 55,300,530 newly issued ordinary shares of the Company. On January 5, 2023, the Company
entered into the Second SmartConn Acquisition share transfer agreement, the consideration of which will be paid in the form of
114,899,222 newly issued shares of the Company. We may issue more ordinary shares through the ATM offering in the future and,
therefore, it may cause the market price of our ordinary shares to decline. See "Item 3. Key Information—D. Risk
Factors— We may need additional capitals for our business and future sales of our ordinary shares could cause the market price
of our ordinary shares to decline.", "Item 4. Information on the Company—C. History and Development of the
Company." and "Item 5. Operating and Financial Review and Prospects — Recent developments."
24
Risks
Related to Our Corporate Structure
We
are a Cayman Islands company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands
law than under U.S. law, shareholders may have less protection for their shareholder rights than they would under U.S. law.
Our
corporate affairs are governed by our Fourth Amended and Restated Memorandum and Articles of Association, the Cayman Islands Companies Act (Revised) (the "Companies Act") and the common law of the Cayman Islands. The rights of shareholders to take action against
the directors, actions by minority shareholders and the fiduciary 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 that from English common law, which has persuasive, but not binding, authority
on a court in 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 precedent in some jurisdictions in the United States.
In particular, the Cayman Islands has a different body of securities laws than the United States. In addition, some U.S. states, such
as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. There is no statutory
recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain
circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken
by management or members of the board of directors ("
Board
") than they would as shareholders of a U.S. public company.
Judgments
obtained against us by our shareholders may not be enforceable.
We
are a Cayman Islands company and all of our assets are located outside of the United States. Our current operations are based in China.
In addition, the majority of our current directors and executive officers are nationals and residents of countries other than the United
States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible
for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights
have been infringed under the United States federal securities laws or otherwise. Even if you are successful in bringing an action of
this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of
our directors and officers.
We
may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
The
determination of our status as a foreign private issuer is made annually on the last business day of our most recently completed second
fiscal quarter and, accordingly, the next determination will be made with respect to us on or after June 30, 2023. We would lose our
foreign private issuer status if (1) a majority of our outstanding voting securities are directly or indirectly held of record by U.S.
residents; and (2) a majority of our shareholders or a majority of our Directors or management are U.S. citizens or residents, a majority
of our assets are located in the United States, or our business is administered principally in the United States. If we were to lose
our foreign private issuer status, the regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may
be significantly higher. We may also be required to modify certain of our policies to comply with corporate governance practices associated
with U.S. domestic issuers, which would involve additional costs.
Our
disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Our
disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file
or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC.
We
believe that any disclosure controls and procedures, or internal controls and procedures, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
25
These
inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of
simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more
people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements
due to error or fraud may occur and not be detected, which would likely cause investors to lose confidence in our reported financial
information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading
price of our Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of
fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations
and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.
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,
including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
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 and due to a transition period established by rules of
the SEC for newly public companies, we are not required to include a report of management's assessment regarding internal control
over financial reporting in this annual report. 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. The material weakness identified consisted of (i) a lack of accounting staff
and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements; (ii) a lack of sufficient documented
financial closing policies and procedures, specifically those related to period-end expenses cut-off and accruals; (iii) inadequate controls
with respect to the maintenance of sufficient documentation for, and the evaluation of the accounting implications of, significant and
non-routine payment transactions; and (iv) a lack of sufficient documented financial closing policies and procedures, specifically those
related to period-end expenses cut-off and accruals, as defined in the standards established by the Public Company Accounting Oversight
Board of the United States.
We
have already taken some steps and have continued to implement measures to remediate the material weakness identified, including but not
limited to providing trainings to staff, changing to a new and well-established accounting system, and continuing to monitor the internal
control over financial reporting. However, we cannot assure you that we will not identify additional material weaknesses or significant
deficiencies in the future.
Due
to the material weakness in our internal controls over financial reporting, we conclude that our internal controls over financial reporting
are ineffective and therefore 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, the Ordinary Shares may not be able to remain listed on the NASDAQ Capital Market.
We
will likely not pay dividends in the foreseeable future.
Dividend
policy is subject to the discretion of our Board and will depend on, among other things, our earnings, financial condition, capital requirements
and other factors. We have never declared a dividend. There is no assurance that our Board will declare dividends even if we are profitable.
The payment of dividends by entities organized in China is subject to limitations as described herein. Under Cayman Islands law, we may
only pay dividends from profits of the Company, or credits standing in the Company's share premium account, and we must be solvent
before and after the dividend payment in the sense that we will be able to satisfy our liabilities as they become due in the ordinary
course of business; and the realizable value of assets of our Company will not be less than the sum of our total liabilities, other than
deferred taxes as shown on our books of account, and our capital. Pursuant to the Chinese enterprise income tax law, dividends payable
by a foreign investment entity to its foreign investors are subject to a withholding tax of 10%. Similarly, dividends payable by a foreign
investment entity to its Hong Kong investor who owns 25% or more of the equity of the foreign investment entity is subject to a withholding
tax of 5%. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations
in China currently permit payment of dividends only out of accumulated profits as determined in accordance with the accounting standards
and regulations in China. The transfer to this reserve must be made before distribution of any dividends to shareholders.
26
Our
business may be materially and adversely affected if our Chinese subsidiary declare bankruptcy or become subject to a dissolution or
liquidation proceeding.
The
Enterprise Bankruptcy Law of China provides that an enterprise may be liquidated if the enterprise fails to settle its debts as and when
they fall due and if the enterprise's assets are, or are demonstrably, insufficient to clear such debts. Our Chinese subsidiaries
hold certain assets that are important to our business operations. If any of our Chinese subsidiary undergo a voluntary or involuntary
liquidation proceeding, unrelated 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.
As
an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate
governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protections to shareholders
than they would enjoy if we complied fully with such corporate governance listing standards.
As
a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq listing standards. However, the Nasdaq
Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Currently,
we rely on home country practice with respect to certain aspects of our corporate governance. See "Item 16G. Corporate Governance."
Our shareholders may be afforded less protections than they would otherwise enjoy under the Nasdaq listing standards applicable to U.S.
domestic issuers given our reliance on the home country practice exception.
Risks
Related to Our Ordinary Shares
Our
Ordinary Shares may be delisted from the Nasdaq Capital Market as a result of our failure of meeting the Nasdaq Capital Market continued
listing requirements.
Our
Ordinary Shares are currently listed on the Nasdaq Capital Market under the symbol "PBTS." We must continue to meet the requirements
set forth in Nasdaq Listing Rule 5550 to remain listing on the Nasdaq Capital Market. On November 7, 2022, the Company received a written
notification from Nasdaq's Listing Qualifications Staff of The NASDAQ Stock Market LLC ("Nasdaq") notifying the Company
that the minimum bid price per share for its common shares has been below $1.00 for a period of 30 consecutive business days and the
Company therefore no longer meets the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) (the "Deficiency").
Under
the Nasdaq Listing Rules, the Company had until May 8, 2023 to regain compliance, and may be eligible for an extension of an additional
180 calendar days, provided that the Company meets the continued listing requirement for market value of publicly held shares and all
other initial listing standards for Nasdaq except for Nasdaq Listing Rule 5550(a)(2), and provide a written notice of its intention to
cure this Deficiency during the second compliance period, by effecting a reverse stock split, if necessary.
If
the Company fails to regain compliance with the Price-based Requirements or any other listing rules when required in the future, we could
be subject to suspension and delisting proceedings. There can be no assurance that our Shares will be eligible for trading on any such
alternative exchanges or markets in the United States. If Nasdaq determines to delist our ordinary shares, or if we fail to list our
Shares on other stock exchanges or find alternative trading venue for our Shares, the market liquidity and the price of our Shares and
our ability to obtain financing for our operations could be materially and adversely affected.
Our
issuance of new shares and convertible note had a dilutive effect on our existing shareholders and may adversely impact the market price
of our Ordinary Shares.
We
may from time to time issue additional Ordinary Shares or securities convertible into our Ordinary Shares, including in future financings
that we may undertake. For example, on January 6, 2022, the Company entered into an equity transfer agreement with the shareholder of
SmartConn Co., Limited ("
SmartConn
"), pursuant to which the Company agreed to purchase 19.99% equity of SmartConn
at 90% of the appraisal price, which was settled by an aggregate of 17,138,305 newly issued Ordinary Shares. The transaction was closed
on February 22, 2022.
Further,
pursuant to an equity purchase agreement with the Shenzhen Chenbao Information Service Co., Ltd. ("Chenbao") dated April
20, 2022, the Company agrees to purchase 5% equity interests of Chenbao for a consideration of RMB15,000,000 million, which was settled
by the combination of cash of RMB3,000,000 and 5,756,481 newly issued Ordinary Shares. The transaction was closed on August 24, 2022.
In
addition, under the terms of an equity transfer agreement with eight individual shareholders of Boxinrui International Holdings Limited
("Boxinrui") dated June 24, 2022, the Company issued to them an aggregate of 19,942,553 Ordinary Shares as a consideration
for acquiring 15% equity of Boxinrui. The transaction was closed on June 28, 2022.
27
On
September 1, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, a Utah limited liability
company, pursuant to which the Company issued Streeterville Capital, LLC an unsecured convertible promissory note on September 1, 2022
in the original principal amount of $8,640,000, convertible into ordinary shares, $0.00166667 par value per share, of the Company. As
of December 31, 2022, an aggregate of 13,981,758 Ordinary Shares has been converted into Ordinary Shares at conversion price of eighty-five
percent (85%) multiplied by the average of the two (2) lowest daily VWAPs during the ten (10) Trading Day period immediately preceding
the applicable measurement date. If our Ordinary Shares are issued in connection with the conversion of the note, our shareholders may
experience dilution and, as a result, our stock price may decline.
On
September 9, 2022, the Company entered into a Standby Equity Purchase Agreement (the "Standby Agreement") with YA II PN,
Ltd. Pursuant to the Standby Agreement, the Company will be able to issue and sell up to $30,000,000 of its ordinary shares, at the Company's
sole option, any time during the three-year period following the execution date of the Standby Agreement subject to certain limitations.
On
October 27, 2022, the Company entered into an equity transfer agreement with DTI GROUP LIMITED ("DTI") to which the Company
agreed to purchase 19% of the equity interest of DTI for a consideration of RMB57,435,100, which was settled by 55,506,750 newly issued
Ordinary Shares. The acquisition was closed on November 1, 2022.
On
December 16, 2022, the Company entered into an equity transfer agreement (the "Second Boxinrui Acquisition") with 14 shareholders
of Boxinrui in which the Company agreed to purchase 20% of the equity interest of Boxinrui for the aggregated total consideration of
RMB48,206,973, which shall be settled by 55,300,530 newly issued ordinary shares of the Company.
Due
to these issuances and any future additional issuances of shares of our Ordinary shares or securities convertible into Ordinary Shares,
including pursuant to our shelf registration statement or our ATM facility, our shareholders may experience immediate dilution and, as
a result, our stock price may decline. See "Item 3. Key Information—D. Risk Factors— We may need additional capitals
for our business and future sales of our ordinary shares could cause the market price of our ordinary shares to decline.", "Item
4. Information on the Company—C. History and Development of the Company." and "Item 5. Operating and Financial Review
and Prospects — Recent developments."
Risks
Related to Doing Business in China
The
Chinese government exerts substantial influence over the manner in which we must conduct our business activities
.
We are
currently not required to obtain approval from Chinese authorities to issue securities to foreign investors, however, if our subsidiaries
or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on
U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors.
The
Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through
regulation and state ownership. Under the current government leadership, the government of the PRC has been pursuing reform policies
which have adversely affected China-based operating companies whose securities are listed in the United States, with significant policies
changes being made from time to time without notice. There are substantial uncertainties regarding the interpretation and application
of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement and performance
of our contractual arrangements with borrowers in the event of the imposition of statutory liens, death, bankruptcy or criminal proceedings.
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.
Given
recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted
overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability
to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.
28
Recently,
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, (the "Opinions"), which was 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. Effective measures, such as promoting the construction
of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas listed companies. As of
the date of this Annual Report, we have not received any inquiry, notice, warning, or sanctions from PRC government authorities in connection
with the Opinions.
On
June 10, 2021, the Standing Committee of the National People's Congress of China (the "SCNPC"), promulgated the PRC
Data Security Law, which took effect in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities
and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance
of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate
rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used.
The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security
and imposes export restrictions on certain data an information.
In
early July 2021, regulatory authorities in China launched cybersecurity investigations with regard to several China-based companies that
are listed in the United States. The Chinese cybersecurity regulator announced on July 2, 2021 that it had begun an investigation of
Didi Global Inc. (NYSE: DIDI) and two days later ordered that the company's app be removed from smartphone app stores. On July
5, 2021, the Chinese cybersecurity regulator launched the same investigation on two other Internet platforms, China's Full Truck
Alliance of Full Truck Alliance Co. Ltd. (NYSE: YMM) and KANZHUN LIMITED (Nasdaq: BZ). On July 24, 2021, the General Office of the Communist
Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden
of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education, pursuant to which foreign investment
in such firms via mergers and acquisitions, franchise development, and variable interest entities are banned from this sector.
On
August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure
(the "Regulations"), which took effect on September 1, 2021. The Regulations supplemented and specified the provisions on
the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others,
that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time
after the identification of certain critical information infrastructure.
On
August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC (the "Personal Information Protection
Law"), which took effect in November 2021. As the first systematic and comprehensive law specifically for the protection of personal
information in the PRC, the Personal Information Protection Law provides, among others, that (i) an individual's consent shall
be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking; (ii) personal
information operators using sensitive personal information shall notify individuals of the necessity of such use and impact on the individual's
rights; and (iii) where personal information operators reject an individual's request to exercise his or her rights, the individual
may file a lawsuit with a People's Court.
As
such, the Company's business segments may be subject to various government and regulatory interference in the provinces in which
they operate. The Company could be subject to regulations 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 the existing and newly adopted
laws and regulations or penalties for any failure to comply. Additionally, the governmental and regulatory interference could significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to
significantly decline or be worthless.
Furthermore,
it is uncertain when and whether the Company will be required to obtain permission from the PRC government to continue to be listed on
U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company
is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not
received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or
future laws and regulations relating to its business or industry.
29
On
December 24, 2021, the CSRC, together with other relevant government authorities in China issued the Provisions of the State Council
on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), and the Measures for the
Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) ("Draft Overseas Listing Regulations").
The Draft Overseas Listing Regulations requires that a PRC domestic enterprise seeking to issue and list its shares overseas ("Overseas
Issuance and Listing") shall complete the filing procedures of and submit the relevant information to CSRC. The Overseas Issuance
and Listing includes direct and indirect issuance and listing. Where an enterprise whose principal business activities are conducted
in PRC seeks to issue and list its shares in the name of an overseas enterprise ("Overseas Issuer") on the basis of the equity,
assets, income or other similar rights and interests of the relevant PRC domestic enterprise, such activities shall be deemed an indirect
overseas issuance and listing ("Indirect Overseas Issuance and Listing") under the Draft Overseas Listing Regulations. Therefore,
the proposed listing would be deemed an Indirect Overseas Issuance and Listing under the Draft Overseas Listing Regulations. As such,
the Company would be required to complete the filing procedures of and submit the relevant information to CSRC after the Draft Overseas
Listing Regulations become effective.
In
addition, on December 28, 2021, the CAC, the National Development and Reform Commission ("NDRC"), and several other administrations
jointly issued the revised Measures for Cybersecurity Review (the "Revised Review Measures"), which became effective and
replaced the Measures for Cybersecurity Review on February 15, 2022. According to the Revised Review Measures, if an "online platform
operator" that is in possession of personal data of more than one million users intends to list in a foreign country, it must apply
for a cybersecurity review. Based on a set of Q&A published on the official website of the State Cipher Code Administration in connection
with the issuance of the Revised Review Measures, an official of the said administration indicated that an online platform operator should
apply for a cybersecurity review prior to the submission of its listing application with non-PRC securities regulators. Given the recency
of the issuance of the Revised Review Measures and their pending effectiveness, there is a general lack of guidance and substantial uncertainties
exist with respect to their interpretation and implementation. For example, it is unclear whether the requirement of cybersecurity review
applies to follow-on offerings by an "online platform operator" that is in possession of personal data of more than one million
users where the offshore holding company of such operator is already listed overseas. Furthermore, the CAC released the draft of the
Regulations on Network Data Security Management in November 2021 for public consultation, which among other things, stipulates that a
data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider
and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the
following year. If the draft Regulations on Network Data Security Management are enacted in the current form, we, as an overseas
listed company, will be required to carry out an annual data security review and comply with the relevant reporting obligations.
We
have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals,
including on a retrospective basis, from the CSRC, the CAC or other PRC authorities, as well as regarding any annual data security review
or other procedures that may be imposed on us. If any approval, review or other procedure is in fact required, we are not able to guarantee
that we will obtain such approval or complete such review or other procedure timely or at all. For any approval that we may be able to
obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and offerings relating
to our securities.
Adverse
changes in political, economic and other policies of the Chinese government could have a material adverse effect on the overall economic
growth of China, which could materially and adversely affect the growth of our business and our competitive position.
Currently,
all of our business operations are conducted in China. Accordingly, our business, financial condition, results of operations and prospects
are affected significantly by economic, political and legal developments in China. Although the PRC economy has been transitioning from
a planned economy to a more market-oriented economy since the late 1970s, the PRC government continues to exercise significant control
over China's economic growth through direct allocation of resources, monetary and tax policies, and a host of other government
policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between
the Renminbi and foreign currencies, and regulate the growth of the general or specific market. While the Chinese economy has experienced
significant growth in the past 30 years, growth has been uneven, both geographically and among various sectors of the economy. Furthermore,
the current global economic crisis is adversely affecting economies throughout the world. As the PRC economy has become increasingly
linked with the global economy, China is affected in various respects by downturns and recessions of major economies around the world.
The various economic and policy measures enacted by the PRC government to forestall economic downturns or bolster China's economic
growth could materially affect our business. Any adverse changes in the economic conditions in China, in policies of the PRC government
or in laws and regulations in China could have a material adverse effect on the overall economic growth of China and market demand for
our outsourcing services. Such developments could adversely affect our businesses, lead to reduction in demand for our services and adversely
affect our competitive position.
30
Uncertainties
with respect to the PRC legal system could have a material adverse effect on us.
The
PRC legal system is based on written statutes. Unlike under common law systems, decided legal cases have little value as precedents in
subsequent legal proceedings. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing
economic matters in general and forms of foreign investment (including in respect of wholly foreign owned enterprises) in particular.
These laws, regulations and legal requirements are relatively new and are often changing, and their interpretation and enforcement depend
to a large extent on relevant government policy and involve significant uncertainties that could limit the reliability of the legal protections
available to us.
The
Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas
and foreign investment in China-based issuers. In addition, the enforcement of laws and regulations in China can change quickly with
little advance notice. In 2021, 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, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts
in anti-monopoly enforcement. We do not expect to be subject to cybersecurity review with the Cyberspace Administration of China ("CAC")
if the draft Measures for Cybersecurity Censorship become effective as they are published, since: (i) our products and services are offered
not directly to individual consumers; (ii) we do not possess a large amount of personal information in our business operations; and (iii)
data processed in our business does not have a bearing on national security and thus may not be classified as core or important data
by the authorities. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative
regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will
be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business
operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange.
We
cannot predict the effects of future developments in government policy or the PRC legal system in general. We may be required in the
future to procure additional permits, authorizations and approvals for our existing and future operations, which may not be obtainable
in a timely fashion or at all, or may involve substantial costs and unforeseen risks. An inability to obtain, or the incurrence of substantial
costs in obtaining, such permits, authorizations and approvals may have a material adverse effect on our business, financial condition
and results of operations.
We
may be adversely affected by the complexity and uncertainties of and changes in PRC regulation of Internet business and related companies.
The
PRC government extensively regulates the Internet industry, including with respect to foreign ownership of and licensing and permit requirements
pertaining to companies in the Internet industry. These Internet-related laws and regulations are relatively new and evolving and their
interpretation and enforcement involve significant uncertainties. As a result, in certain circumstances, it may be difficult to determine
what actions or omissions may be deemed to be in violation of the applicable laws and regulations. Issues, risks and uncertainties relating
to PRC regulation of Internet businesses include, but are not limited to:
●
there are uncertainties
    relating to the regulation of Internet businesses in China, including evolving licensing practices. This means that permits, licenses
    or operations at some of our companies may be subject to challenge, or we may fail to obtain permits or licenses that may be deemed
    necessary for our operations, or we may not be able to obtain or renew certain permits or licenses.
●
the evolving PRC regulatory
    system for the Internet industry may lead to the establishment of new regulatory agencies. For example, the Cyberspace Administration
    of China was established in 2014, as the central Internet censorship, oversight and control agency for the PRC. Further, new laws,
    regulations or policies may be promulgated or announced that will regulate Internet activities, including the online video and online
    advertising businesses. If these new laws, regulations or policies are promulgated, additional licenses may be required for our operations.
    If our operations do not comply with these new regulations after they become effective, or if we fail to obtain any licenses required
    under these new laws and regulations, we could be subject to penalties.
The
interpretation and application of the existing PRC laws, regulations, policies and possible new laws, regulations or policies relating
to the Internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in
and the businesses and activities of, Internet businesses in China, including our business. We cannot assure you that we have obtained
all the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain
any new licenses required under any new laws or regulations. There are also risks that we may be found to violate the existing or future
laws and regulations given the uncertainty and complexity of China's regulation of Internet business.
31
U.S.
regulators' ability to conduct investigations or enforce rules in China is limited.
Currently,
all of our operations conducted outside of the U.S. As a result, it may not be possible for the U.S. regulators to conduct investigations
or inspections, or to effect service of process within the U.S. or elsewhere outside China on us, our subsidiaries, officers, directors
and shareholders, and others, including with respect to matters arising under U.S. federal or state securities laws. China does not have
treaties providing for reciprocal recognition and enforcement of judgments of courts with the U.S. and many other countries. As a result,
recognition and enforcement in China of these judgments in relation to any matter, including U.S. securities laws and the laws of the
Cayman Islands, may be difficult or impossible.
We
face uncertainty regarding the PRC tax reporting obligations and consequences for certain indirect transfers of the stock of our operating
company.
Pursuant
to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises issued by
the PRC State Administration of Taxation on December 10, 2009, or Circular 698, where a foreign investor transfers the equity interests
of a PRC resident enterprise indirectly by way of the sale of equity interests of an overseas holding company, or an Indirect Transfer,
and such overseas holding company is located in a tax jurisdiction that: (i) has an effective tax rate less than 12.5%; or (ii) does
not tax foreign income of its residents, the foreign investor should report such Indirect Transfer to the competent tax authority of
the PRC resident enterprise. The PRC tax authority will examine the true nature of the Indirect Transfer, and if the tax authority considers
that the foreign investor has adopted an abusive arrangement in order to avoid PRC tax, they will disregard the existence of the overseas
holding company and re-characterize the Indirect Transfer and as a result, gains derived from such Indirect Transfer may be subject to
PRC withholding tax at the rate of up to 10%. In addition, the PRC resident enterprise is supposed to provide necessary assistance to
support the enforcement of Circular 698. At present, the PRC tax authorities will neither confirm nor deny that they would
enforce Circular 698, in conjunction with other tax collection and tax withholding rules, to make claims against our PRC subsidiary as
being indirectly liable for unpaid taxes, if any, arising from Indirect Transfers by shareholders who did not obtain
their shares in the IPO of our shares.
On
February 3, 2015, the PRC State Administration of Taxation issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect
Transfer of Properties by Non-Tax Resident Enterprises, or SAT Public Notice 7. SAT Public Notice 7 supersedes the rules with respect
to the Indirect Transfer under SAT Circular 698, but does not touch upon the other provisions of SAT Circular 698, which remain in force.
SAT Public Notice 7 has introduced a new tax regime that is significantly different from the previous one under SAT Circular 698. SAT
Public Notice 7 extends its tax jurisdiction to not only Indirect Transfers set forth under SAT Circular 698 but also transactions involving
transfer of other taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Public Notice
7 provides clearer criteria than SAT Circular 698 for assessment of reasonable commercial purposes and has introduced safe harbors for
internal group restructurings and the purchase and sale of equity through a public securities market. SAT Public Notice 7 also brings
challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets. Where
a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which
is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable
assets, may report such Indirect Transfer to the relevant tax authority. 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. Both the transferor and the transferee
may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.
We
face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved,
such as offshore restructuring, sale of the shares in our offshore subsidiaries or investments. Our Company may be subject to filing
obligations or taxations if our Company is transferor in such transactions, and may be subject to withholding obligations if our Company
is transferee in such transactions, under SAT Circular 698 and SAT Public Notice 7. For transfer of shares in our Company by investors
that are non-PRC resident enterprises, our PRC subsidiary may be requested to assist in the filing under SAT Circular 698 and SAT Public
Notice 7. As a result, we may be required to expend valuable resources to comply with SAT Circular 698 and SAT Public Notice 7 or to
request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our Company
should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.
PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders
to personal liability and limit our ability to acquire PRC companies or to inject capital into our PRC subsidiary, limit our PRC subsidiary
ability to distribute profits to us, or otherwise materially and adversely affect us.
In
July 2014, China's State Administration of Foreign Exchange ("SAFE") has promulgated the Circular on Relevant Issues
Concerning Foreign Exchange Control on Domestic Residents' Offshore Investment and Financing and Roundtrip Investment Through Special
Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic
Residents' Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be
effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate
entities) to register with local branches of SAFE in connection with their direct or indirect offshore investment activities. SAFE Circular
37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.
32
Under
SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments
in offshore special purpose vehicles, or SPVs, will be required to register such investments with the SAFE or its local branches. In
addition, any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its filed registration with the local
branch of SAFE with respect to that SPV, to reflect any material changes. Moreover, any subsidiaries of such SPV in China is required
to urge the PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder of such SPV
fails to make the required registration or to update the previously filed registration, the subsidiaries of such SPV in China may be
prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the
SPV may also be prohibited from making additional capital contribution into its subsidiary in China. On February 28, 2015, the SAFE promulgated
a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became
effective on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investment
and outbound overseas direct investment, including those required under the SAFE Circular 37, will be filed with qualified banks instead
of the SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of the SAFE.
Mr.
Ban Lor and Stewart Lor are not PRC resident, thus, they are not subject to SAFE Circular 37. We have informed our shareholders that
we know are PRC residents and hold direct or indirect interests in us to make the necessary applications, filings and amendments as required
under SAFE Circular 37 and other related rules. However, we may not at all times be fully aware or informed of the identities of all
our beneficial owners who are PRC residents, and we may not always be able to compel our beneficial owners to comply with the SAFE Circular
37 requirements. As a result, we cannot assure you that all of our shareholders or beneficial owners who are PRC residents will at all
times comply with, or in the future make or obtain any applicable registrations or approvals required by, SAFE Circular 37 or other related
regulations. Failure by any such shareholders or beneficial owners to comply with SAFE Circular 37 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 or affect our ownership structure, which could adversely affect our business and prospects.
Furthermore,
as these foreign exchange regulations are still relatively new and their interpretation and implementation has been constantly evolving,
it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted,
amended and implemented by the relevant governmental authorities. For example, we may be subject to a more stringent review and approval
process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings,
which may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company,
we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete
the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our
acquisition strategy and could adversely affect our business and prospects.
PRC
regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds
of the offerings to make loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect
our liquidity and our ability to fund and expand our business.
In
utilizing the proceeds from the offerings or any future offerings, as an offshore holding company of our PRC subsidiary, we may make
loans to our PRC subsidiary and controlled PRC affiliate, or we may make additional capital contributions to our PRC subsidiary. Any
loans to our PRC subsidiary or controlled PRC affiliate are subject to PRC regulations and approvals. For example, loans by us to our
PRC subsidiary in China, each of which is a foreign-invested enterprise, to finance their activities cannot exceed the statutory limits
and must be registered with SAFE or its local counterpart.
We
may also decide to finance our PRC subsidiary through capital contributions. These capital contributions must be approved by the Ministry
of Commerce in China or its local counterpart. We cannot assure you that we will be able to obtain these government registrations or
approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiary or controlled PRC affiliate or capital
contributions by us to our subsidiaries or any of their respective subsidiaries. If we fail to receive such registrations or approvals,
our ability to use the proceeds of the IPO and to capitalize our PRC operations may be negatively affected, which could adversely and
materially affect our liquidity and our ability to fund and expand our business.
In
2015, SAFE promulgated Circular 19, a notice regulating the conversion by a foreign-invested enterprise of foreign currency into Renminbi
by restricting how the converted Renminbi may be used. Circular 19 requires that Renminbi converted from the foreign currency-denominated
capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable governmental
authority and may not be used for equity investments within the PRC unless specifically provided for otherwise in its business scope.
In addition, SAFE strengthened its oversight of the flow and use of Renminbi funds converted from the foreign currency-denominated capital
of a foreign-invested enterprise. The use of such Renminbi may not be changed without approval from SAFE and may not be used to repay
Renminbi loans if the proceeds of such loans have not yet been used for purposes within the foreign-invested enterprise's approved
business scope.
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 by us to our PRC subsidiary or controlled PRC affiliate or with respect to
future capital contributions by us to our PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability
to use the proceeds we receive from the offerings and to capitalize or otherwise fund our PRC operations may be negatively affected,
which could adversely and materially affect our liquidity and our ability to fund and expand our business.
33
Governmental
control of currency conversion may limit our ability to use our revenues effectively and the ability of our PRC subsidiary to obtain
financing.
The
PRC government imposes control on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency
out of China. We receive a majority of our revenues in Renminbi, which currently is not a freely convertible currency. Restrictions on
currency conversion imposed by the PRC government may limit our ability to use revenues generated in Renminbi to fund our expenditures
denominated in foreign currencies or our business activities outside China. Under China's existing foreign exchange regulations,
Renminbi may be freely converted into foreign currency for payments relating to current account transactions, which include among other
things dividend payments and payments for the import of goods and services, by complying with certain procedural requirements. Our PRC
subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, by complying with certain procedural
requirements. Our PRC subsidiary may also retain foreign currency in their respective current account bank accounts for use in payment
of international current account transactions. However, we cannot assure you that the PRC government will not take measures in the future
to restrict access to foreign currencies for current account transactions.
Conversion
of Renminbi into foreign currencies, and of foreign currencies into Renminbi, for payments relating to capital account transactions,
which principally includes investments and loans, generally requires the approval of SAFE and other relevant PRC governmental authorities.
Restrictions on the convertibility of the Renminbi for capital account transactions could affect the ability of our PRC subsidiary to
make investments overseas or to obtain foreign currency through debt or equity financing, including by means of loans or capital contributions
from us.
We
may be classified as a "resident enterprise" for PRC enterprise income tax purposes; such classification could result in
unfavorable tax consequences to us and our non-PRC shareholders.
The
Enterprise Income Tax Law provides that enterprises established outside of China whose "de facto management bodies" are located
in China are considered PRC tax resident enterprises and will generally be subject to the uniform 25% PRC enterprise income tax rate
on their global income. In addition, a tax circular issued by the State Administration of Taxation on April 22, 2009 regarding the
standards used to classify certain Chinese-invested enterprises established outside of China as resident enterprises clarified that dividends
and other income paid by such resident enterprises will be considered to be PRC source income, subject to PRC withholding tax, currently
at a rate of 10%, when recognized by non-PRC enterprise shareholders. This recent circular also subjects such resident enterprises to
various reporting requirements with the PRC tax authorities. Under the implementation rules to the Enterprise Income Tax Law, 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 other assets of an enterprise. In addition, the tax circular mentioned above details that
certain Chinese-invested enterprises will be classified as resident enterprises if the following are located or resident in China: senior
management personnel and departments that are responsible for daily production, operation and management; financial and personnel decision
making bodies; key properties, accounting books, company seal, and minutes of board meetings and shareholders' meetings; and half
or more of the senior management or directors having voting rights.
Currently,
there are no detailed rules or precedents governing the procedures and specific criteria for determining de facto management bodies which
are applicable to our company or our overseas subsidiaries. We do not believe that Powerbridge meets all of the conditions required for
PRC resident enterprise. The Company is a company incorporated outside the PRC. As a holding company, its key assets are its ownership
interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its Board and the resolutions
of its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities outside of China are not PRC
resident enterprises either. 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". There can be no assurance
that the PRC government will ultimately take a view that is consistent with ours.
34
However,
if the PRC tax authorities determine that Powerbridge is a PRC resident enterprise for enterprise income tax purposes, we may be required
to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. Such 10% tax rate could
be reduced by applicable tax treaties or similar arrangements between China and the jurisdiction of our shareholders. For example, for
shareholders eligible for the benefits of the tax treaty between China and Hong Kong, the tax rate is reduced to 5% for dividends if
relevant conditions are met. In addition, non-resident enterprise shareholders may be subject to a 10% PRC tax on gains realized on the
sale or other disposition of ordinary shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC
individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the
event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends or gains, it would generally
apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC
shareholders of the 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 the Company is treated as a PRC resident enterprise.
Provided
that our Cayman Islands holding company, Powerbridge, is not deemed to be a PRC resident enterprise, our shareholders who are not PRC
residents will not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of
our shares. However, 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. As a result, gains derived from such indirect transfer may be
subject to PRC enterprise income tax, and the transferee would be obligated to withhold the applicable taxes, currently at a rate of
10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being
required to file a return and being taxed under Circular 7, and we may be required to expend valuable resources to comply with Bulletin
37, or to establish that we should not be taxed under Circular 7 and Bulletin 37.
In
addition to the uncertainty in how the new resident enterprise classification could apply, it is also possible that the rules may change
in the future, possibly with retroactive effect. If we are required under the Enterprise Income Tax law to withhold PRC income tax on
our dividends payable to our foreign shareholders, or if you are required to pay PRC income tax on the transfer of our shares under the
circumstances mentioned above, the value of your investment in our shares may be materially and adversely affected. These rates may be
reduced by an applicable tax treaty, but it is unclear whether, if we are considered a PRC resident enterprise, holders of our shares
would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. Any
such tax may reduce the returns on your investment in our shares.
The
M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors,
which could make it more difficult for us to pursue growth through acquisitions in China.
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. These M&A Rules and
some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make
merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances that
the China's Commerce Ministry ("MOC") be notified in advance of any change-of-control transaction in which a foreign
investor takes control of a PRC domestic enterprise. Moreover, the Anti-Monopoly Law requires that the MOC shall be notified in advance
of any concentration of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOC that
became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense
and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic
enterprises that raise "national security" concerns are subject to strict review by the MOC, and the rules prohibit any activities
attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.
In the future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned
regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including
obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions, which could
affect our ability to expand our business or maintain our market share.
35
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 Companies, 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 subsidiaries 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 and who are granted options or other awards under the equity incentive
plan are subject to these regulations as our company has become an overseas listed company. 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' ability to distribute dividends to us. We also face regulatory uncertainties that could restrict
our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.
Failure
to make adequate contributions to various mandatory social security plans as required by PRC regulations may subject us to penalties.
PRC
laws and regulations require us to pay several statutory social welfare benefits for our employees, including pensions, medical insurance,
work-related injury insurance, unemployment insurance, maternity insurance and housing provident fund contributions. Local governments
usually implement localized requirements as to mandatory social security plans considering differences in economic development in different
regions. Our failure in making contributions to various mandatory social security plans and in complying with applicable PRC labor-related
laws may subject us to late payment penalties. We may be required to make up the contributions for these plans as well as to pay late
fees and fines. If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results
of operations may be adversely affected.
Our
current employment practices may be restricted under the PRC Labor Contract Law and our labor costs may increase as a result.
The
PRC Labor Contract Law and its implementing rules impose requirements concerning contracts entered into between an employer and its employees
and establishes time limits for probationary periods and for how long an employee can be placed in a fixed-term labor contract. Because
there is lack of clarity with respect to the implementation and potential penalties and fines provided in the Labor Contract Law and
tis implementing rules, it is uncertain how it will impact our current employment policies and practices. We cannot assure you that our
employment policies and practices do not, or will not, violate the Labor Contract Law or its implementing rules and that we will not
be subject to related penalties, fines or legal fees. If we are subject to large penalties or fees related to the Labor Contract Law
or its implementing rules, our business, financial condition and results of operations may be materially and adversely affected. In addition,
according to the Labor Contract Law and its implementing rules, if we intend to enforce the non-compete provision with an employee in
a labor contract or non-competition agreement, we have to compensate the employee on a monthly basis during the term of the restriction
period after the termination or ending of the labor contract, which may cause extra expenses to us. Furthermore, the Labor Contract Law
and its implementation rules require certain terminations to be based upon seniority rather than merit, which significantly affects the
cost of reducing workforce for employers. In the event we decide to significantly change or decrease our workforce in the PRC, the Labor
Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our circumstances or in
a timely and cost-effective manner, thus our results of operations could be adversely affected.
36
If
the chops of our PRC company and branches are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes,
the corporate governance of these entities could be severely and adversely compromised.
In
China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature.
Each legally registered company in China is required to maintain a company chop, which must be registered with the local Public Security
Bureau. In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The
chops of our PRC subsidiary are generally held securely by personnel designated or approved by us in accordance with our internal control
procedures. To the extent those chops are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes,
the corporate governance of these entities could be severely and adversely compromised and those corporate entities may be bound to abide
by the terms of any documents so chopped, even if they were chopped by an individual who lacked the requisite power and authority to
do so. In addition, if the chops are misused by unauthorized persons, we could experience disruption to our normal business operations.
We may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management
from our operations.
You
may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against
us or our management named in the prospectus supplement based on foreign laws. It may also be difficult for you or overseas regulators
to conduct investigations or collect evidence within China.
We
are a company incorporated under the laws of the Cayman Islands, and we conduct our operations in China and our assets are located in
China. In addition, most of our senior executive officers reside within China for a significant portion of the time. As a result, it
may be difficult for you to effect service of process upon us or those persons inside mainland China. In addition, there is uncertainty
as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons
predicated upon the civil liability provisions of the securities laws of the U.S. or any state.
The
recognition and enforcement of foreign judgments are provided for under the
PRC Civil Procedures Law
. PRC courts may recognize
and enforce foreign judgments in accordance with the requirements of the
PRC Civil Procedures Law
based either on treaties
between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any
treaties or other forms of written arrangement with the U.S. that provide for the reciprocal recognition and enforcement of foreign judgments.
In addition, according to the
PRC Civil Procedures Law
, the PRC courts will not enforce a foreign judgment against us or
our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security,
or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in
the U.S. See "Enforceability of Civil Liabilities".
It
may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. For example, in China,
there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside
China or otherwise with respect to foreign entities. 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.
Furthermore, 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 PRC State
Council and the competent departments of the PRC 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.
Recent
joint statement by the SEC and the Public Company Accounting Oversight Board (United States) ("PCAOB"), proposed rule
changes submitted by Nasdaq, the Holding Foreign Companies Accountable Act and Accelerating Holding Foreign Companies Accountable
Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification
of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties
to our offering.
On
April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint
statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including
China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers
in China and higher risks of fraud in emerging markets.
On
May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply a minimum offering size requirement for companies primarily operating
in a "Restrictive Market"; (ii) adopt a new requirement relating to the qualification of management or the board of directors
for Restrictive Market companies; and (iii) apply additional and more stringent criteria to an applicant or listed company based on the
qualifications of the company's auditors.
37
On
May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned
or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not
subject to PCAOB inspection. If the PCAOB is unable to inspect the company's auditors for three consecutive years, the issuer's
securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding
Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.
On
June 4, 2020, the U.S. President issued a memorandum ordering the President's Working Group on Financial Markets, (the "PWG"),
to submit a report to the President within 60 days of the memorandum that includes recommendations for actions that can be taken by the
executive branch and by the SEC or PCAOB on Chinese companies listed on U.S. stock exchanges and their audit firms. On August 6,
2020, the PWG released the report and recommended the SEC implement five recommendations to address companies from jurisdictions that
do not provide the PCAOB with sufficient access to fulfill its statutory mandate (the "NCJs"). In particular, the PWG recommends
that enhanced listing standards be applied to companies from NCJs for seeking initial listing and remaining listed on U.S. stock exchanges.
Under the enhanced listing standards, if the PCAOB does not have access to work papers of the principal audit firm located in a NCJ for
the audit of a U.S.-listed company as a result of governmental restrictions, the U.S.-listed company may satisfy this standard by providing
a co-audit from an audit firm with comparable resources and experience where the PCAOB determines that it has sufficient access to the
firm's audit work papers and practices to inspect the co-audit. The report permits the new listing standards to provide for a transition
period until January 1, 2022 for listed companies, but would apply immediately to new listings once the necessary rulemakings and/or
standard-setting are effective. After this transition period, if currently listed companies were unable to meet the enhanced listing
standards, then they would become subject to securities exchange rules and processes that could lead to possible de-listing if not
cured, deregistration from the SEC and/or other risks, which may materially and adversely affect the market price and liquidity of such
companies' securities, or effectively terminate their trading in the United States.
On
March 24, 2021, the SEC adopted interim final rules to implement certain disclosure and documentation requirements of
the HFCAA, which became effective on May 5, 2021. The requirements of annual report for foreign issuers have been updated by
the SEC to reflect the disclosure requirements, which require disclosure in a foreign issuer's annual report regarding the
audit arrangements of, and governmental influence on, such foreign issuer. A foreign issuer would be required to comply with such
disclosure requirement if the SEC identified it as having a "non-inspection" year. On May 13, 2021, the PCAOB
proposed a new rule to implement the HFCAA, which was subsequently adopted by PCAOB on September 22, 2021 and approved by the
SEC on November 5, 2021. Among other things, the proposed rule provides a framework for the PCAOB to determine, under
the HFCAA, 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. The proposed rule also established the
approach, evaluation factors, required documents and information, form, public availability, effective date and duration of such
determinations and the process by which the board of the PCAOB can modify or vacate its determinations. On June 22, 2021, the U.S.
Senate passed a bill and if eventually signed into law, would reduce the number of consecutive non-inspection years
required for triggering the prohibitions under the HFCA Act from three years to two. The SEC may propose additional rules or
guidance that could impact us if our auditor is not subject to the PCAOB inspection. The SEC have implemented some of the concepts
recommended in the PWG report published in 2013, which were more stringent than the HFCAA. For example, if a company was not
subject to the PCAOB inspection, the report recommended that the transition period before a company would be delisted would end on
January 1, 2022. On December 2, 2021, the SEC issued amendments to finalize the interim final rules adopted in March 2021, and
established procedures to identify and prohibit the trading of the securities of certain registrants under the HFCAA. On
December 16, 2021, the PCAOB issued a report on its determination (the "2021 Determinations") that it is unable to inspect or
investigate completely PCAOB-registered public accounting firms headquartered in China and in Hong Kong because of positions taken
by PRC and Hong Kong authorities in those jurisdictions. The PCAOB has made such determination as mandated under the Holding Foreign
Companies Accountable Act. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers
that have used non-inspected audit firms and thus are at risk of such suspensions in the future.
In June 2021, the Senate passed the Accelerating Holding Foreign Companies Accountable Act (the "AHFCAA"), which was signed into law on December 29, 2022, amending the HFCAA and requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the "SOP") with the China Securities Regulatory Commission and the Ministry of Finance of China. The SOP, together with two protocol agreements governing inspections and investigations, establishes a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law.
On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 Determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor's, control, including positions taken by authorities of the PRC. The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond. The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to its ability to inspect and investigate completely accounting firms based in the mainland China and Hong Kong.
Our
auditor, Onestop Assurance PAC, the independent registered public accounting firm that issues the consolidated financial statements incorporated
by reference in this Annual Report, is a firm registered with the PCAOB and is subject to laws in the United States pursuant to which
the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. However, the recent developments
added uncertainties to our continued listing in the U.S. and 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
the audit of our financial statements.
Such uncertainty could cause the market price of the ordinary shares to be
materially and adversely affected, and our securities could be delisted or prohibited from being traded "over-the-counter" earlier
than would be required by the HFCAA.
38
Item
4. INFORMATION ON THE COMPANY
C.
History
                                            and Development of the Company
Corporate
History and Background
Powerbridge
is a company that was established under the laws of the Cayman Islands on July 27, 2018 as a holding company. The Company, through its
subsidiaries, is a provider of software application and technology services to corporate and government customers engaged in global trade.
For
the purpose of the IPO and listing on the NASDAQ Capital Market, a reorganization of the Company's legal structure was completed
on August 27, 2018. The reorganization involved the incorporation of Powerbridge, a Cayman Islands holding company, and its wholly owned
subsidiary, Powerbridge HK, a holding company incorporated on July 27, 2018 under the laws of Hong Kong; and the transfer of all equity
ownership of Powerbridge Zhuhai to Powerbridge HK from the former shareholders of Powerbridge Zhuhai through an investment holding company.
Prior
to the reorganization, Powerbridge Zhuhai's equity interests were held by the former shareholders through an investment holding
company. Powerbridge Zhuhai was incorporated on October 30, 1997 in Zhuhai, Guangdong province under the laws of the People's Republic
of China. Powerbridge Zhuhai is an operating subsidiary that provides global trade software application and technology services to corporate
and government customers located in China.
On
August 7, 2018, the former shareholders transferred their 100% ownership interest in Powerbridge Zhuhai to Powerbridge HK, which is 100%
owned by Powerbridge. After the reorganization, Powerbridge owns 100% equity interests of Powerbridge HK and Powerbridge Zhuhai. All
shareholders have the same ownership interest in Powerbridge as in Powerbridge Zhuhai prior to the reorganization.
As
of the date of this Annual Report, Zhuhai Powerbridge has five branches, which are located in China (Changsha, Wuhan, Nanning, Hangzhou)
and maintain offices in Changsha, Wuhan, Naning, and Hangzhou to serve different customers in various geographic locations.
Powerbridge
Cayman is the sole shareholder of Powerbridge HK, incorporated in Hong Kong on July 27, 2018, and Hongding Hong Kong, incorporated in
Hong Kong on August 19, 2020. Powerbridge H K is the sole shareholder of Powerbridge Zhuhai. Powerbridge Zhuhai was incorporated on October
30, 1997 under the laws of the People's Republic of China, as a wholly-owned subsidiary of Powerbridge HK and a wholly foreign-owned
entity under the PRC laws. Hongding Shenzhen was incorporated on October 21, 2020 under the laws of the People's Republic
of China, as a wholly-owned subsidiary of Hongding Hong Kong and a wholly foreign-owned entity under the PRC laws. As of the date of
this Annual Report, Hongding Hong Kong and Hongding Shenzhen have no business operations.
Neither
Powerbridge Cayman, Powerbridge HK, nor Hongding Hong Kong is currently engaged in any active business other than acting as holding companies.
We conduct our business mainly through Powerbridge Zhuhai and Hongding Shenzhen. As of the date of this Annual Report, Hongding Shenzhen
has no business operations.
On
April 2, 2019, our ordinary shares commenced trading on Nasdaq under the symbol "PBTS".
On
June 21, 2019, the Company incorporated Wuhan Honggang Technology Co. Ltd. ("Wuhan Honggang") in Hubei province under the
law of the PRC. Wuhan Honggang is 60% owned by Powerbridge Zhuhai, one of the wholly owned subsidiaries of the Company, and 40% owned
by a third party. Wuhan Honggang is engaged in application development service and Internet of Things ("IOT") system developments.
On
June 28, 2019, Powerbridge Zhuhai entered into a joint venture agreement (the "JV Agreement") with Guangdong Guangrui Network
Technology Co., Ltd. ("Gaungrui") to form the joint venture through a newly-formed corporation named Shantou Hongrui Information
Technology Co., Ltd. ("Hongrui ") to undertake exploration for technology information services in the area of Shantou
and Guangdong. Powerbridge Zhuhai and Guangrui each initially owned 51% and 49% equity interest in Hongrui. On July 1, 2019, Powerbridge
Zhuhai, Guangrui, and Haoqing Su entered into a supplemental agreement to the JV Agreement for equity interest alternation, pursuant
to which Hongrui was 51% owned by Powerbridge Zhuhai, 43% owned by Guangrui, and 6% owned by Haoqing Su. On August 19, 2019, Hongrui
was established in Guangdong province under the law of the PRC. On January 14, 2020, Haoqing Su entered into certain share transfer agreements
with Xiaoyu Liu and Hengqin Baisheng Investment Partnership (General Partnership) ("Hengqin"), pursuant to each of which,
Haoqing Su agreed to transfer 3% equity interest of Hongrui for RMB 150,000. On the same day, Guangrui entered into a certain share transfer
agreement with Xiaoyu Liu to transfer 18% equity interest of Hongrui for RMB 900,000. As a result of the share transfer agreements, Hongrui
was 51% owned by Powerbridge Zhuhai, 25% owned by Guangrui, 3% owned by Hengqin, and 21% owned by Xiaoyu Liu. On May 21, 2020, Powerbridge
Zhuhai, Guangrui, Hengqin, and Xiaoyu Liu entered into another supplemental agreement to the JV Agreement for equity interest alternation,
pursuant to which Hongrui is currently 38% owned by Powerbridge Zhuhai, 35% owned by Guangrui, 15% owned by Hengqin, and 12% owned by
Xiaoyu Liu. Shantou Hongrui is engaged in IT system development and integration service.
39
On
September 2, 2019, Powerbridge Zhuhai, together with two unrelated entities, incorporated Chongqing Powerbridge Zhixin Technology Co.,
Ltd. ("Chongqing Powerbridge") with Powerbridge Zhuhai holding 45% equity interest in Chongqing Powerbridge. By the date
of this Annual Report, Chongqing Powerbridge has not commenced its operations and Powerbridge Zhuhai has not injected any capital to
the business. Chongqing Powerbridge is engaged in IT system development and technical consulting service.
On
July 28, 2020, Powerbridge Zhuhai incorporated Shenzhen Honghao Internet Technology Co., Ltd. ("Honghao") in Guangdong
province under the law of the PRC. Honghao is 100% owned by the Powerbridge Zhuhai. . Powerbridge HK, incorporated a fully owned subsidiary
-Shenzhen Hongding Interconnect Technology Co., Ltd in Guangdong province under the law of the PRC. By the date of this Annual Report,
Honghao has not commenced its operations.
On
Feb 8, 2021, Hongxi Data Technology Co., Ltd. ("Powerbridge Macau") was incorporated in Macau, PRC. Powerbridge Macau is
70% owned by Powerbridge Zhuhai and 30% owned by unrelated entity. By the date of this Annual Report, Powerbridge Macau has not commenced
its operations and Powerbridge Macau has not injected any capital to the business.
On
April 25, 2021, Powerbridge Zhuhai incorporated Ningbo Zhijing Tongfu Technology Co., Ltd. ("Ningbo Zhijing") was incorporated
under the law of the PRC. Ningbo Zhijing was 51% owned by the Powerbridge Zhuhai and 40% owned by unrelated entities. By the date of
this Annual Report, Ningbo Zhijing has not commenced its operations and Powerbridge Zhuhai has not injected any capital to the business.
On
July 7, 2021, Powerbridge Zhuhai incorporated Zhanjiang Hongqin Technology Co., Ltd. ("Zhanjiang Hongqin") under the law
of the PRC. Zhanjiang Hongqin was 51% owned by the Powerbridge Zhuhai and 49% owned by unrelated entities. By the date of this Annual
Report, Zhanjiang Hongqin has ceased from its business and Powerbridge Zhuhai has not injected any capital to the business. Zhanjiang
Hongqin experienced change in shareholders and was not owned by Zhuhai Powerbridge hereafter.
On
July 21, 2021, Powerbridge Zhuhai incorporated Zhuhai Hongyang Supply Chain Co., Ltd. ("Zhuhai Hongyang") under the law of
the PRC. Zhuhai Hongyang was 60% owned by the Powerbridge Zhuhai and 40% owned by unrelated entities. By the date of this Annual Report,
Zhuhai Hongyang has not commenced its operations and Powerbridge Zhuhai has not injected any capital to the business.
On
August 2, 2021, Powerbridge Zhuhai incorporated Hunan Xinfei Digital Technology Co., Ltd. ("Hunan Xinfei") under the law
of the PRC. Hunan Xinfei was 51% owned by the Powerbridge Zhuhai and 49% owned by unrelated entities.. Hunan Xinfei is engaged in IT
system development and technical consulting service. By the date of this Annual Report, Hunan Xinfei has not commenced its operations
and Powerbridge Zhuhai has not injected any capital to the business. Hunan Xinfei experienced change in shareholders and was not owned
by Zhuhai Powerbridge hereafter.
On
August 17, 2021, Powerstream Supply Chain Co., Ltd. ("Powerstream") was incorporated under the laws of the PRC, as a wholly-owned
subsidiary of Powerbridge HK and a wholly foreign-owned entity under the PRC laws. Powerstream Zhuhai is engaged in supply chain services
and new business development.
On
October 1, 2021, Powercrypto Holding Pte. Ltd. ("Powercrypto") was incorporated under the laws of Republic of Singapore and
Powerbridge Cayman is the sole shareholder of Powercrypto. Powercrypto is planning to engage in cryptocurrencies mining and digital asset
related business.
On
January 21, 2022, Powermeta Digital Co., Ltd. ("Powermeta") was incorporated under the laws of PRC, as a wholly-owned subsidiary
of Powerbridge HK. Powermeta is planning to engage in development of interactive media services, metaverse and digital services.
On
Febuary 15, 2022, Metafusion Digital Co., Ltd. ("Metafusion") was incorporated under the laws of PRC and 66% stake of Metafusion
is owned by Powermeta. Metafusion is planning to engage in IPs development, metaverse and digital services.
40
On
May 4, 2022, POWERCRYPTO USA Inc. ("POWERCRYPTO") was incorporated under the laws of United States, as a wholly-owned subsidiary
of Powerbridge Cayman. By the date of this Annual Report, POWERCRYPTO has not commenced its operations and Powerbridge Zhuhai has not
injected any capital to the business
On
August 11, 2022, Powerstream Capital Co., Ltd. ("Powerstream Capital") was incorporated under the laws of PRC, as a wholly-owned
subsidiary of Powerbridge HK. Powerstream Capital is engaged in strategic acquisitions and investments to expand market reach.
On
January 6, 2022, the Company entered into an equity transfer agreement (the "First SmartConn Acquisition") with the shareholder
of SmartConn., Limited ("SmartConn") pursuant to which the Company agrees to purchase 19.99% equity of SmartConn at 90% of
the appraisal price. The consideration of the First SmartConn Acquisition was to be paid in the form of newly issued shares of the Company.
An aggregate of 17,138,305 Ordinary Shares was issued to its shareholders on February 22, 2022 upon the closing of the First SmartConn
Acquisition.
On
January 5, 2023, the Company entered into an equity transfer agreement (the "Second SmartConn Acquisition") with a shareholder
of SmartConn pursuant to which the Company agrees to purchase 31% equity of SmartConn at 90% of the appraisal price. The consideration
of the Second SmartConn Acquisition will be paid in the form of 114,899,222 newly issued shares of the Company. The Company will hold
an aggregate of 50.99% equity interest of the SmartConn following the closing of the Second SmartConn Acquisition and the First SmartConn
Acquisition of 19.99% equity interest of the SmartConn in January 2022.
SmartConn
wholly controls Shanghai Stamp Technology Co., Ltd. ("Stamp Technology"). Stamp Technology mainly engaged in distributed
database blockchain, cryptocurrency DAPP development and web 3.0 application in the industry. By acquiring SmartConn, Powerbridge intend
to incorporate its blockchain technology and web 3.0 know how application to further elevate Powerbridge's product development
ability.
On
April 20, 2022, Powerbridge Zhuhai entered into an equity purchase agreement with the Shenzhen Chenbao Information Service Co., Ltd.
("Chenbao"), pursuant to which the Company agreed to acquire 5% equity interests (the "Acquired Interests") of
the outstanding equity interests of Chenbao. Pursuant to the Agreement, Powerbridge Zhuhai shall purchase the Acquired Interests for
an aggregate purchase price of US$2.35 million, which shall be paid as follows: (i) US$0.47 million in cash; and (ii) 5,756,481 shares
of the Company.
On
June 24, 2022, the Company entered into an equity transfer agreement (the "First Boxinrui Acquisition") with Boxinrui's
shareholders (the "relevant shareholders") of Boxinrui International Holdings Limited ("Boxinrui") pursuant to
which the Company agrees to purchase 15% equity of Boxinrui at 90% of the appraisal price. The relevant shareholders would hold 19,942,553
shares of the Company upon the consummation of the First Boxinrui Acquisition.
On
December 16, 2022, the Company entered into an equity transfer agreement (the "Second Boxinrui Acquisition") with 14 shareholders
of Boxinrui in which the Company agreed to purchase 20% of the equity interest of Boxinrui for the aggregated total consideration of
RMB48,206,973, which shall be settled by 55,300,530 newly issued ordinary shares of the Company. The Company will hold an aggregate of
35% equity interest of the Boxinrui following the closing of the Second Boxinrui Acquisition and the First Boxinrui Acquisition of 20%
equity interest of the Boxinrui in June 2022. Boxinrui wholly owns Hong Kong Anxin Jieda Co., Limited ("Anxin Jieda"), which
in turn owns 90% equity interest in Ascendent Insights Education Co., Ltd. ("AIedu") (also previously known as Shenzhen Wenxing
Tianxia Technology Co., Ltd.). AIedu mainly engaged in Artificial Intelligence, Blockchain and NFT technology in the educational industry.
Such acquisition is aligned with Powerbridge's metaverse strategy as Powerbridge intends to utilize AIedu's business know-how
and technology to expand the Company's operation.
On
September 1, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, a Utah limited liability
company, pursuant to which the Company issued Streeterville Capital, LLC an unsecured convertible promissory note on September 1, 2022
in the original principal amount of $8,640,000, convertible into ordinary shares, $0.00166667 par value per share, of the Company.
41
On
September 1, 2022, the Company entered into a share purchase agreement (the "White Lion Agreement") with White Lion Capital
LLC, a Nevada limited liability company, which provides that White Lion Capital is committed to purchase our ordinary shares, $0.00166667
par value per share, with an aggregate offering price of up to $15,000,000 ("Commitment Amount") from time to time during
the commitment period, which commences on the execution date of the White Lion Agreement, and shall terminate on the earlier of (i) the
date on which the Investor shall have purchased shares equal to the Commitment Amount, or (ii) May 31, 2024 , or (iii) the date on which
the White Lion Agreement is terminated.
On
September 9, 2022, the Company entered into a Standby Equity Purchase Agreement (the "Standby Agreement") with YA II PN,
Ltd. Pursuant to the Standby Agreement, the Company will be able to issue and sell up to $30,000,000 of its ordinary shares, par value
of US$ 0.00166667 per share, at the Company's sole option, any time during the three-year period following the execution date of
the Standby Agreement subject to certain limitations. Pursuant to the terms of the Standby Agreement, any shares sold to the Investor
will be priced at 96% of the market price, which is defined as the lowest daily volume weighted average price of the shares during the
three consecutive trading days commencing on the trading day immediately following the Company's delivery of an advance notice
to the Investor. Any sale of shares pursuant to the Standby Agreement is subject to certain limitations, including that the Investor
is not permitted to purchase any shares that would result in it owning more than 4.99% of the Company's Shares.
On
October 27, 2022, the Company entered into an equity transfer agreement with six individual shareholders of DTI Group Limited ("DTI"),
pursuant to which the Company agreed to purchase 19% equity interest of DTI Jiangsu Corporation Limited ("DTI Jiangsu") for
a consideration of RMB 57,435,100.
On
November 29, 2022, the Company entered into a standby equity purchase agreement (the "Standy Agreement") with TBS CAPITAL
LP, pursuant to which the Company will be able to issue and sell up to US$10,000,000 of its ordinary shares, par value of US$0.00166667
per share, at the Company's sole option. Pursuant to the terms of the Standby Agreement, any shares sold to the investor will be
priced at 96% of the market price, which is defined as the lowest daily volume weighted average price of the shares during the three
consecutive trading days commencing on the trading day immediately following the Company's delivery of an advance notice to the
investor. Any sale of shares pursuant to the Standby Agreement is subject to certain limitations, including that the Investor is not
permitted to purchase any shares that would result in it owning more than 4.99% of the Company's Shares.
The
Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and will file reports, registration
statements and other information with the SEC. The Company's reports, registration statements and other information can be inspected
on the SEC's website at www.sec.gov and such information can also be inspected and copies ordered at the public reference facilities
maintained by the SEC at the following location: 100 F Street NE, Washington, D.C. 20549. You may also visit us on the World Wide Web
at www.powerbridge.com. However, information contained on our website does not constitute a part of this Annual Report.
Corporate
Information
Our
principle executive offices are located at Advanced Business Park, 9th Fl, Bldg C2, 29 Lanwan Lane，Hightech District, Zhuhai,
Guangdong 519080, China. Our telephone number is +86-756-339-5666. Our principle website address is www.powerbridge.com. The information
on our website is not part of this Annual Report.
The
following diagram illustrates our corporate structure of our principal subsidiaries as of the date of this Annual Report.
Compliance
with Foreign Investment
All
limited liability companies formed and operating in the PRC are governed by the Company Law of the People's Republic of China (the
"Company Law"), which was amended and promulgated by the Standing Committee of the National People's Congress on October
26, 2018 and came into effect on the same day. Foreign invested enterprises must also comply with the Company Law, with exceptions as
specified in the relevant foreign investment laws. Under our corporate structure as of the date of this Annual Report, 100% of the equity
interests of Powerbridge Zhuhai are entirely and indirectly held by our company through Powerbridge HK. Therefore, Powerbridge Zhuhai,
a wholly foreign-owned enterprise ("WFOE") of Powerbridge HK, should be regarded as a foreign-invested enterprise and comply
with both the Company Law and other applicable foreign investment laws.
42
With
respect to the establishment and operation of WFOEs, the MOFCOM, and the National Development and Reform Commission (the "NDRC"),
promulgated the Catalogue of Industries for Guiding Foreign Investment (the "Catalogue"), as amended on June 28, 2017, which
came into effect on August 28, 2017. The Catalogue divides industries for foreign investment into three categories: encouraged, restricted
and prohibited. Those industries not set out in the Catalogue shall be classified as industries permitted for foreign investment. The
Catalogue serves as the main basis for management and guidance for the MOFCOM to manage and supervise foreign investments to PRC. In
addition, in June 2018, MOFCOM and NDRC promulgated the Special Management Measures (Negative List) for the Access of Foreign Investment
(the "Negative List"), effective July 2018. The Negative List expands the scope of permitted industries by foreign investment
by reducing the number of industries that fall within the Negative List where restrictions on the shareholding percentage or requirements
on the composition of board or senior management still exists. According to the Catalogue and the Negative List, IT services, the main
business that our PRC subsidiary presently conduct, are neither restricted nor prohibited.
Emerging
Growth Company Status
As
a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an "emerging growth company"
as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"), enacted in April 2012, and may take advantage of
reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:
●
being permitted to present
    only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial
    Condition and Results of Operations in our SEC filings;
●
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 periodic reports, proxy statements and registration statements; and
●
exemptions from the requirements
    of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
    approved.
We
may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first
sale of our common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended. However,
if certain events occur before the end of such five-year period, including if we become a "large accelerated filer", our
annual gross revenues exceed $1.07 billion or we issue more than $1.00 billion of non-convertible debt in any three-year period, we will
cease to be an emerging growth company before the end of such five-year period.
In
addition, Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition
period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have elected to
take advantage of the extended transition period for complying with new or revised accounting standards and acknowledge such election
is irrevocable pursuant to Section 107 of the JOBS Act.
Foreign
Private Issuer Status
We
are incorporated in the Cayman Islands. Less than 50% of our outstanding voting securities are held by U.S. residents and none of
the following three circumstances applies: the majority of our executive officers or directors are U.S. citizens or residents; more than
50% of our assets are located in the United States; or our business is administered principally in the United States. Therefore, we are
a "foreign private issuer", as defined in Rule 405 under the Securities Act and Rule 3b-4(c) under the Securities Exchange
Act of 1934, as amended ("Exchange Act"). As a result, we are not subject to the same requirements as U.S. domestic issuers.
Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those
of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not
be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will
not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit
disclosure and recovery regime.
The
Initial Public Offering
On
April 4, 2019, the Company completed its initial public offering of 1,750,000 Ordinary Shares, $0.00166667 par value per share. The Ordinary
Shares were sold at an offering price of $5.00 per share, generating gross proceeds of approximately $8.75 million, and net proceeds
of approximately $7.8 million. The registration statement relating to the IPO also covered the underwriters' common stock purchase
warrants and the Ordinary Shares issuable upon the exercise thereof in the total amount of 122,500 Ordinary Shares. Each five-year warrant
entitles the warrant holder to purchase the Company's shares at the exercise price of $5.50 per share and is not be exercisable
for a period of 180 days from March 28, 2019. Our Ordinary Shares began trading on the NASDAQ Capital Market on April 2, 2019 under the
ticker symbol "PBTS".
On
May 10, 2019, the Company closed on the exercise in full of the over-allotment option to purchase an additional 262,500 Ordinary Shares
of the Company by Maxim Group LLC and The Benchmark Company, LLC, the representatives of the underwriters in connection with and the
joint book running managers of the Company's IPO ("Underwriters"), at the IPO price of $5.00 per share. As a result,
the Company has raised gross proceeds of approximately $1.31 million, in addition to the IPO gross proceeds of $8.75 million, or combined
gross proceeds in this IPO of approximately $10.06 million, before underwriting discounts and commissions and offering expenses.
43
B.
Business Overview
Overview
We
are a provider of software application and technology solutions and services to corporate and government customers primarily located
in China. We introduced global trade software applications when we launched our operations in 1997 with a vision to make global trade
operations easier for our customers. Our mission is to make global trade easier by empowering all players in the ecosystem. Since our
inception, we have continued to innovate by developing technologies that enable us to successfully deliver a series of technology solutions
that address the evolving and changing needs of our corporate and government customers.
Most
of our customers are corporate and government organizations engaged in global trade. Our corporate customers are import and export companies,
manufacturers engaged in international trade, as well as logistics and other service providers. Our government customers include customs
and other government agencies that oversee the flow of goods and services across borders, as well as governmental authorities and organizations
that manage and operate free trade and bonded trade zones, ports and terminals, and other international trade facilities.
Our
customers are facing increasing challenges as the world's trade ecosystems continue to grow in size and complexity. Costs associated
with global trade, such as logistics performance, border control and international connectivity remain high. Potential savings from more
collaborative and efficient trade processes could reduce the costs of global trade significantly. The need for greater efficiency and
cost savings are driving the transformative shift for participants in global trade to become more connected and collaborative.
Our
comprehensive and robust solutions and services include
Powerbridge Digital Solutions
and
Powerbridge SaaS Services
with
more than 40 solutions and services deployable on premise and in the cloud. Leveraging our deep domain knowledge and strong industry
experience, we provide a series of differentiated and robust solutions and services that address the mission critical needs of our corporate
and government customers, enabling them to handle and simplify the complexities of global trade operations, logistics and compliance.
Powerbridge
Digital Solutions
We
provide
Powerbridge Digital Solutions
to our corporate and government customers engaged in global trade, including businesses
and manufacturers across a broad range of industries, government agencies and regulatory authorities, as well as global trade logistics
and other service providers.
Powerbridge Digital Solutions
enable our customers to streamline their trade operations, trade logistics
and regulatory compliance, consisting of
Trade Enterprise Solutions
and
Trade Compliance Solutions
which have been in service
since our first introduction twenty years ago and
Import & Export Loan and Insurance Processing
which have recently been introduced
to a selected group of customers.
Powerbridge
SaaS Services
We
began offering our
Powerbridge SaaS Services
(software-as-a-service) in 2016 and are continually developing and expanding our
SaaS services that provide our corporate and government customers with significant benefits, including better use of resources, a lower
cost of operations, easier document handling, faster processing time as well as higher logistics and compliance connectivity and efficiency.
Powerbridge SaaS Services
include
Logistics Service Cloud
and
Trade Zone Operations Cloud
which are in service,
and
Inward Processed Manufacturing Cloud, Cross-Border eCommerce Cloud
and
Import & Export Loan.
44
Powerbridge
BaaS Services
We
have begun offering our cloud-based
Powerbridge BaaS Services
(blockchain-as-a-service) with designated use case for
limited government customer in June 2019 and we have generated limited revenue from it. We continue developing our BaaS Services for
market commercialization. Blockchain technology is emerging as a major disruptive force across many industries including those involved
in global trade. We believe that blockchain technology could allow our customers to conduct business in more synchronized and collaborative
ways to substantially increase operational efficiency and reduce trade costs across the global trade supply chain.
Powerbridge
BaaS Service
includes
Compliance Blockchain Services
and
Supply Chain Blockchain Services
.
Our
solutions and services are built from our multiple proprietary technology platforms which are developed based on industry leading open
source infrastructure technologies. Our technology platforms include
Powerbridge System Platform
and
Powerbridge SaaS Platform
,
which are designed for high-performance reliability, flexibility and scalability, allowing us to expand our solutions and services rapidly
and efficiently to consistently address the needs of our corporate and government customers. Our
Powerbridge BaaS Platform
became
available in June 2019.
Powerbridge
System Platform
consists of modular technology and business components that enable us to provide mission critical applications and
solutions in trade operations, trade logistics and regulatory compliance to our corporate and government customers.
Powerbridge
SaaS Platform
is the technology infrastructure upon which we are developing our SaaS services designed to provide on-demand services
in trade operations, trade logistics and regulatory compliance with a multi-tenant and microservice architecture.
Our
BaaS services are built on top of our
Powerbridge Blockchain Platform
that is designed to allow the customs agency to increase
the effectiveness of risk assessments and interventions in monitoring and controlling the flow of goods, documents, and vendors for cross
border trade events and transactions, with an enhanced level of regulatory information transparency and synchronization among customs
agencies and other government authorities.
We
intend to continue leveraging our industry expertise and product knowledge with the best use of emerging and disruptive technologies
such as big data, artificial intelligence and Internet of Things to enhance our core technology capabilities and continually increase
the scope of our solutions and services to our customers.
Our
corporate and government customers include (i) international trade businesses and manufacturers; (ii) governmental agencies and authorities;
and (iii) logistics and other various service providers. We currently derive our revenues from four sources: (1) revenue from application
development services generated from
Powerbridge Digital Solutions,
which require us to perform services including project planning,
project design, application development and system integration based on customers' specific needs. These services also require
significant production and customization; (2) revenue from consulting and technical support services primarily generated from
Powerbridge
Digital Solutions
; and (3) revenue from subscription services generated from
Powerbridge SaaS Services
, (4) revenue from trading
business. We currently generate most of our revenues from application development services, which represented 36.7% 63.3% and 82.5% of
total revenue in fiscal 2022, 2021 and 2020, respectively. Revenue from consulting and technical support services represented 24.2%,
14.2% and 14.2% of total revenue in fiscal 2022, 2021 and 2020, respectively. Revenue from subscription services represented 7.2%, 2.9%
and 3.3% of total revenue in fiscal 2022, 2021 and 2020, respectively. Revenue from trading represented 31.8% and 19.6% of total revenue
in fiscal 2022 and 2021. For the fiscal years ending December 31, 2022, 2021 and 2020, our revenues were $10.5 million, $32.1 million
and $26.7 million, respectively.
As
of the date of this Annual Report, we had a total of 177 full-time employees, of which 90 are in research and development, 17 are in
sales and marketing, 38 are in technical and customer services, and 32 are in general administration.
45
Our
Opportunity
We
believe the need for global trade software application and technology services will continue to grow, driven by the continuing growth
in China's global trade volume and the rapid advancement of the Belt & Road Initiative ("B&R"). The convergence
of disruptive technologies and emergence of blockchain technology will accelerate the drive for organizations engaged in global trade
to increasingly adapt at scale to new technologies as they mature and become more widely available.
We
intend to address the subsets of three technology markets: the traditional enterprise software market in China which we have been servicing
since our inception, the SaaS application market in China which we began servicing in 2016, and the blockchain applications market for
which we have begun to implement the BaaS services with designated use since June 2019.
According
to Techvio, an industry research and consulting firm with offices located around the world, the market size in global trade management
software of 2019 is $334.5 million and is expected to grow to $416.23 million in 2024.
1
According
to the market report entitled "Blockchain Technology Market Size By Providers (Infrastructure Provider, Application Provider, Operators),
By Application (Smart Contract, Payment & Wallet, Digital Identity, Exchange, Compliance & Risk Management), By End-use (BFSI,
Government, Healthcare, IT Service, Media & Entertainment, Transportation & Logistics) Industry Analysis Report, Regional Outlook,
Growth Potential, Competitive Market Share & Forecast, 2019 – 2025" published in November 2019, blockchain technology
market size surpassed USD 488 million in 2018 and is predicted to grow at more than 69% CAGR between 2019 and 2025
2
.
Our
Competitive Strengths
We
believe that the following competitive strengths contribute to our success and differentiate us from our competitors:
●
Global Trade Software
    Application Pioneer
. We introduced software applications for international trade companies when we launched our operations
    in 1997. Since our inception, we have continued to innovate by developing technologies that enable us to consistently and successfully
    deliver a series of solutions and services that address the evolving and changing needs of our customers.
1
https://www.technavio.com/talktous?report=IRTNTR22765&type=sample&rfs=epd&src=search
2
Blockchain Technology Market
    2019-2025 | Global Report; Published Date: November 2019 | 259 Pages | Report ID: GMI2194 (From Global Market Insights) https://www.gminsights.com/industry-analysis/blockchain-technology-market
3.
The industry enters the
    era of strict regulation: In-depth analysis on the current situation of Chinese cosmetics market and key enterprises in 2022 | China
    Business Industry Research Institute | https://www.askci.com; https://baijiahao.baidu.com/s?id=1725091146940684122&wfr=spider&for=pc
46
●
Deep Domain Knowledge
    and Industry Expertise.
We have gained and developed deep domain knowledge and industry expertise from over twenty years
    of experience in service, which is built into and will continue to contribute to the robust and differentiated capabilities of our
    solutions and services. We believe domain knowledge and industry expertise is a significant competitive barrier due to the complex
    nature of global trade.
●
Solid and Diversified
    Customer Base
. Our corporate and government customers include global trade businesses and manufacturers across a broad range
    of industries, governmental agencies and authorities as well as logistics and other service providers. Our solid customer base enables
    us to continually cross sell our solutions and services and to expand our market share.
●
Comprehensive and
    Robust Product Portfolio
. Our proven track record with our customers demonstrates the strengths in our comprehensive and
    robust solution and service portfolio that is built to handle the complexities of global trade business. We continue to leverage
    disruptive technologies to expand the breadth and adaptability of our portfolio of offerings to serve a wider range of customers.
●
Mission-Critical
    System That is Difficult to Replace
. Because our solutions and services address the mission-critical needs in global trade,
    our customers depend on our solutions and services for managing their regulatory compliance and trade logistics operations. Once
    deployed, our solutions and services become a mission-critical system that is often deeply entrenched into their core technology
    and operational infrastructures.
●
Extensive Experience
    for the Belt
&
Road
. The B&R has catalyzed substantial development for improving regulatory compliance
    and trade logistics in China. We have been providing our solutions and services to help our customers achieve their objectives in
    this regard. Our extensive experience will enable us to efficiently expand into international markets which we intend to target as
    B&R accelerates in these markets
3
.
●
Strong Brand Recognition
    and Industry Resources.
We have built a trusted brand with a long history and a proven track record of delivering value
    to our customers. We believe our brand, reputation and scale as well as our extensive network of industry and government resources
    enable us to capture substantial growth potential as our corporate and government customers continue to grow and evolve.
●
Solid Foundation
    for Developing Blockchain Applications.
Blockchain technology is promising for business but its adoption is challenging.
    It requires not only technology and product expertise but also the ability to integrate and bring all players to adapt and participate.
    We believe we are capable of utilizing blockchain for global trade by leveraging our strong domain knowledge, product expertise and
    industry resources.
●
Scalable Business
    Model with a Prudent Approach
. Our solutions and services are highly adaptable, scalable and supported by our flexible technology
    infrastructures, enabling us to efficiently expand our customer base. In addition, we are taking a prudent approach by combining
    traditional technologies and disruptive technologies because we believe the adoption and transformation of new technologies will
    take considerable time and effort.
●
Experienced and Visionary
    Management Team
. Our success is attributable to the deep industry expertise and proven track-record of our experienced management.
    We were founded twenty years ago with a vision to make global trade operations easier, and since then, we have successfully demonstrated
    our abilities. We believe our management's strong execution capability is among the best in our industry.
3
Belt and Road Portal, https://eng.yidaiyilu.gov.cn
47
Our
Growth Strategy
We
plan to grow and expand our business by pursuing the following growth strategies:
●
Increase Revenue
    with Existing Customers
. We have a large number of corporate and government customers that currently utilize our global trade
    software application and technology services. We intend to increase our revenue by leveraging and broadening our relationships with
    existing customers by helping them identify new use cases for our existing solutions and services; and solving more problems for
    them by providing new solutions and services.
●
Accelerate Research
    and Development.
We used a portion of the proceeds from the IPO towards our research and development to accelerate the
    development of disruptive technology-enabled global trade software application and technology solutions and services. We believe
    disruptive technology-enabled applications such as SaaS and BaaS services will enable us to capture significant market share in China
    and abroad.
●
Expand Our Solution
    and Service Offerings.
Global trade involves complex and cumbersome processes in trade operations, trade logistics and
    regulatory compliance with many players in the global trade ecosystem. Each player is operating in different settings and with different
    objectives. We plan to expand our offerings and focus on solutions and services that enable our customers to better connect and collaborate.
●
Increase Market Penetration.
We
    plan to leverage our deep domain knowledge, industry experience and product expertise to increase our market penetration with a deeper
    market coverage and a broader geographical reach in China. We intend to continually strengthen our sales and marketing capabilities
    and build strategic partnerships with government and corporate organizations to further drive sales.
●
Expand into International
    Markets
. China's B&R has brought significant opportunities for Chinese organizations such as infrastructure builders
    and logistics service providers. We plan to expand into international markets by "piggybacking" on these organizations
    as they bring their products and services to the B&R countries. We believe this approach will mitigate risk, reduce cost and
    minimize time-to-market for entering new markets.
●
Pursue Strategic
    Acquisitions and Investments.
We plan to pursue strategic acquisitions and investments in selective technologies and
    businesses that will enhance our technology capabilities, expand our offerings and increase our market penetration. We believe our
    strategic acquisition and investment strategy is critical for us to accelerate our growth and strengthen our competitive position.
Our
Solutions
We
provide software applications and technology solutions and services to corporate and governmental organizations which involved in global
trade. We introduced our first global trade software application in 1998 and have since substantially expanded the scope of our solutions
and services to address deeper and broader customer needs.
Our
solutions and services currently include
Powerbridge Digital Solutions
and
Powerbridge SaaS Services;
we are also
designing and developing
Powerbridge BaaS Services
.
We
have been serving our corporate and government customers with
Powerbridge Digital Solutions
since our introduction of
this solution series twenty years ago. Our comprehensive solutions and services address the mission critical needs in global trade for
our customers, enabling them to optimize and streamline their trade operations, trade logistics and regulatory compliance.
In
2016, we introduced
Powerbridge SaaS Services
and are continually expanding the scope of our SaaS services.
Powerbridge
SaaS Services
is a software-as-a-service designed to enable businesses and government organizations with significant benefits,
including better use of resources, lower cost of operations, easier documentation handling, faster processing time as well as higher
logistics and compliance and connectivity and efficiency.
48
We
began offering our cloud-based
Powerbridge BaaS Services
(blockchain-as-a-service) with designated use case for limited
government customer in June 2019 and have not generated any revenue from it yet. We continue developing our BaaS Services for market
commercialization. Blockchain technology is emerging as a major disruptive force across many industries, including those involved in
global trade. We believe that blockchain technology could allow our customers to conduct business in more synchronized and collaborative
ways to substantially increase operational efficiency and reduce trade costs across the global trade supply chain.
Powerbridge
BaaS Service
includes
Compliance Blockchain Services and Supply Chain Blockchain Services.
Our
solutions and services are built from our multiple proprietary technology platforms:
Powerbridge System Platform
and
Powerbridge
SaaS Platform
, which are designed for high-performance reliability, flexibility and scalability, allowing us to expand our solutions
and services rapidly and efficiently to consistently address the needs of our corporate and government customers. Our
Powerbridge
BaaS Platform
became available in June 2019.
Powerbridge
Digital Solutions
Overview
of Powerbridge Digital Solutions
We
provide
Powerbridge Digital Solutions
to our corporate and government customers engaged in global trade, including import
and export businesses, manufacturers, government agencies and regulatory authorities, as well as trade logistics and other service providers.
Powerbridge
Digital Solutions
include
Trade Compliance Solutions
and
Trade Enterprise Solutions
which
have been in service since our first introduction twenty years ago and
Import & Export Loan and Insurance Processing
which
have recently been introduced to a selected group of customers.
Trade
Compliance Solutions
and
Trade Enterprise Solutions
are implemented and deployed on premises largely as customized
services capable of integrating with applications, systems, equipment and facilities from customers and third-party providers.
Strengths
of Powerbridge Digital Solutions:
We
believe
Powerbridge Digital Solutions
provide the following core benefits for our customers:
●
Our
Trade Compliance
    Solutions
enable government agencies and regulatory authorities with greater control and security, better use of resources,
    higher duty collection, faster processing time and higher compliance efficiency in servicing global trade businesses and logistics
    service providers.
●
Import and export businesses
    and manufacturers in diverse vertical industries use our
Trade Enterprise Solutions
to manage business operations,
    simplify trade processes, reduce document handling, minimize operational cost and increase overall productivity.
49
Trade
Compliance Solutions
Trade
Compliance Solutions
are a series of regulatory compliance solutions and services for government agencies and regulatory authorities
for managing trade zones, optimizing port control, streamlining customs clearance, accelerating cross-border processing, and expanding
Chinaport services, which include the following:
Trade
Zone Compliance.
We provide
Trade Zone Compliance
to government agencies and authorities such as customs for
regulating cross-border flow of goods and services and trade facility authorities for managing the trade zones, including bonded traded
zones, free trade zones and other regulated trade zones. Our solution allows our government customers to streamline compliance and business
processes and automate document processing and exchange as well as manage and regulate all operational activities in the trade zones,
including goods and cargo flows, logistics and warehousing, and inward processing manufacturing.
Port
Compliance & Logistics.
Import and export ports include ocean, air, rail, river, highway and cross-border ports. Port operations
involve complex and cumbersome processes with many players involved, including port and terminal authorities, customs and other government
agencies, import and export businesses and cargo owners, transport vessels and vehicle operators, customs and forwarding agents and various
logistics service providers. We provide
Port Compliance
&
Logistics
to all players to streamline
compliance and logistics processes, which enables rapid and efficient handling of goods and documents.
Customs
Clearance
. We provide
Customs Clearance
to customs and other government agencies such as customs and inspections
to regulate cross-border flow of goods and services for regulatory compliance operations and control. Our solution enables our government
customers to streamline customs clearance processes, increase fraud detection capabilities, and enhance duty collections, with featured
applications including single window operations, clearance compliance and processing, import and export goods inspection, inward processed
manufactured goods clearance, cross-border clearance as well as risk and security control and duty processing.
Cross-Border
Processing
. We provide
Cross Border Processing
to the customs agency, quarantine and inspection agency and other
government agencies and authorities for managing and regulating commodity and merchandise trades at designated trade markets or areas
at cross-borders between China and its neighboring countries. Our solution enables government agencies and authorities to effectively
and efficiently manage all cross-border trade operations, including trader registration, merchandise inspection, customs processing,
vehicle control and checkpoint operations.
Chinaport
Services
. Chinaport is an import and export technology and data platform supported by sixteen major government ministries and bureaus,
including China Customs, MOC, Ministry of Industry and Information Technology, Ministry of Transportation and State Administration of
Foreign Exchange. Chinaport provides services to port authorities for data sharing and online verifications and to trade businesses for
import and export processing. We offer customized solutions and services to Chinaport organizations at national and local levels, engaging
in project designing and planning, system and platform development, system maintenance and customer service for multiple Chinaport strategic
initiatives and programs.
Smart
Command.
Government agencies and authorities such as customs and trade facility authorities use
Smart Command
for
more effective managing and regulating trade compliance and trade logistics activities under their supervision. Our smart command dashboard
integrates key performance data from structured and unstructured data sources. Our visualization applications enable data display in
real time on a single large multi-screen interface with three-dimensional features. Our solution provides intelligent data in an intuitive
and timely manner to enable the operators and decision makers to make informed decisions.
Trade
Enterprise Solutions
We
provide
Trade Enterprise Solutions
to businesses, manufacturers and inward processed manufacturing companies involved
in global trade. Our solutions provide a suite of enterprise management applications that allow our customers to streamline their global
trade business and operations with features and functionalities including business and process operations, inventory and warehousing
control, project execution and management, customs clearance processing and all other compliance and logistics processing.
50
Inward
processed manufacturing companies use imported raw materials, components and parts, packing and other materials to produce finished products
for exporting. Inward processed manufacturing is a complicated and extended process that is highly regulated. We provide a series of
applications specific to inward processed manufacturing companies to help streamline and automate their operations with features and
functionalities including bonded goods verification, bonded logistics record keeping, digital manual processing and customs data management.
Powerbridge
SaaS Services
Overview
of Powerbridge SaaS Services
In
2016, we introduced
Powerbridge SaaS Services
(software-as-a-service) designed for corporate and government organizations
involved in global trade, including import and export businesses and manufacturers, government agencies and regulatory authorities, cross-border
eCommerce operators, as well as logistics and other service providers.
Our
services are designed to be deployed rapidly via internet browsers and mobile devices, and can be supported through designated data centers
and commercially available cloud platform services that provide infrastructure as a service for servers, storage, networking and database.
Strengths
of Powerbridge SaaS Services
We
believe our services encompass the following core advantages:
●
Lower total cost of
    ownership
. Unlike the traditional software model, our on-demand services enable our customers to have access anytime and anywhere
    without the upfront spending in software and hardware.
●
Rapid deployment and
    configuration
. Our services are designed to be deployed and configured rapidly through our application programming interfaces.
●
Flexible and scalable
.
    Our flexible and extensible architecture enables us to offer services that are scalable and adjustable to quickly address the different
    needs of our diverse group of customers.
●
Reliable and secure.
Our
    multi-tenant and microservice technology architectures allow us to design our services to provide our customers with a high level
    of performance, reliability and security.
●
Intuitive and ease of
    use.
Our services are designed be intuitive and easy to use with interfaces that are simple and user friendly. Our users
    are able to learn and use our services without specialized trainings.
51
Logistics
Service Cloud
Logistics
Service Cloud
services are used by import and export logistics service providers such as freight forwarding agent companies
who organize and arrange for air, ocean or land shipments. Our services allow our logistics service customers to minimize paperwork handling,
reduce processing time, simplify workflow and increase performance efficiency by streamlining the import and export freight forwarding
process and by facilitating digital exchange of information and documents among all players engaged in the freight forwarding process.
Our
services enable our customers to connect and synchronize with the applications and systems of cargo owners, cargo depots and terminals,
transportation and carrier companies and regional customs agencies for rapid exchange and sharing of information and data. Our customers
can complete the freight arrangement process to minimize paper document handling that is often tedious, error-prone and time consuming.
Electronic processing of customs declaration, reporting and approval through our data exchange system further expedites the freight forwarding
process.
We
are continually expanding the features and functionalities of our services to reach a broader range of our logistics service customers.
Our core services provide features and functionalities including digital document exchange and processing among freight forwarders, cargo
owners, cargo terminals, transportation carriers and local customs for a variety of tasks, including transport booking confirmation,
cargo manifests and waybills processing, cargo status reporting at regulated depots and terminals, unloading and loading reporting, document
receipt and message handling.
Trade
Zone Operations Cloud
Our
newly introduced
Trade Zone Operations Cloud
is designed for all businesses operating in regulated bonded and free trade
zones, including importers and exporters, manufacturers engaged in global trade, inward processed manufacturers, cross-border eCommerce
operators and logistics service providers as well as government zone management authorities. Our services are designed to enable businesses
to streamline their operations in the zones and allow authorities to effectively manage the zones. Our services are integrated with the
systems from businesses, government authorities, logistics service providers and other third parties.
Businesses
and logistics service providers use our services to run and manage their daily operational, compliance and logistics activities, including
commodity flows of bonded and non-bonded goods, operations record declaration and verification, goods display and business transaction,
bonded to non-bonded conversion, inward processed operations and materials management, zone in-and-out processing, cross-border eCommerce
operations and compliance as well as customs declaration and clearance processing.
Our
services are provided to government zone management and operating authorities as a supplement to their management and operations systems
for a variety of regulatory and management operations, including checkpoint verification and release, logistics planning and allocation,
contract and settlement management as well as document handling and performance data analysis. We are expanding our services using artificial
intelligence and IoT technologies and applications to enhance the government's capabilities in checkpoint and zone security, vehicle
monitoring and control, and smart command operations.
Inward
Processed Manufacturing Cloud
We
are developing our
Inward Processed Manufacturing Cloud
services designed for inward processed manufacturing and trade
companies who use imported raw materials, components and parts, packing and other materials to produce finished products for exporting.
Our services are being developed to allow our customers to streamline and optimize their logistics and compliance operations in bonded
or non-bonded environments. Our services are being designed to integrate with the systems from inward processed businesses, government
authorities and agencies, and logistics service providers. Our services have recently been made available to selected customers.
Inward
processed manufacturing and trade businesses may use our services to perform a variety core logistics and compliance works, including
digital handbook and manual declaration, material and component usage management, customs code revision and update, ledger maintenance,
authorized economic operators services, production related work order based declaration, import and export customs declaration and processing,
bonded goods operations and compliance as well as material and warehousing logistics management.
52
Our
services are designed to connect and synchronize with regional customs and other authorities through their localized single window platforms,
customs compliance and clearance systems, and Chinaport systems and applications, allowing us not only service our inward processed and
trade businesses effectively, but also offer value-added services to the government authorities by streamlining the work order based
manufacturing data verification process as well as providing insightful inward processed manufacturing related operational and compliance
analytics using big data technologies.
Cross-Border
eCommerce Cloud
Our
Cross
-
Border
eCommerce Cloud
is being developed for cross-border eCommerce operators, logistics service providers and payment and settlement
service providers for rapid and efficient handling of the import and export process for couriered consumer merchandise and products.
Our services are aimed at addressing the unique and challenging logistics, compliance and settlement needs of our customers, allowing
them to reduce workflow complexities, minimize processing time while increase customs clearance and overall productivity. Our services
have currently been available for Zhuhai-Macao cross border trade only and we have been working to realize the commercialization of our
cross-border eCommerce services.
Our
services are being designed to integrate with the platforms, systems and applications from all players involved in the cross-border eCommerce
process, including those from cross-border eCommerce operators, logistics service providers, payment and settlement service providers
as well as government agencies and authorities. Our services should enable the players to exchange and share information and data for
streamlining the cross-border process as well as to derive intelligent insight from the trade data for better performance and decision
making.
Our
services are being designed to encompass all core steps throughout the entire cross-border eCommerce process with features and functionalities,
including identity authentication of eCommerce operators, customs declaration and verification, merchandise inspection and approval,
data verification and exchange, customs clearance declaration and processing, logistics handling and tracking, compliance status inquiry
and notification via mobile devices, duty payment and tariff refund processing, government data analytics as well as regulatory information
announcements.
Powerbridge
BaaS Services
Overview
of Powerbridge BaaS Services
We
began offering our cloud-based
Powerbridge BaaS Services
(blockchain-as-a-service) with designated use case for limited
government customer in June 2019 and generated approximately $0.7 million.in fiscal 2021 We continue developing our BaaS Services for
market commercialization. Blockchain technology is emerging as a major disruptive force across many industries, including those involved
in global trade. We believe that blockchain technology could allow our customers to conduct business in more synchronized and collaborative
ways to substantially increase operational efficiency and reduce trade costs across the global trade supply chain.
Powerbridge
BaaS Service
includes
Compliance Blockchain Services and Supply Chain Blockchain Services.
53
Our
blockchain technology-enabled compliance applications and services are designed to allow the customs agency to increase the effectiveness
of risk assessments and interventions in monitoring and controlling the flow of goods, documents, and vendors for cross border trade
events and transactions, with an enhanced level of regulatory information transparency and synchronization among customs agencies and
other government authorities.
Global
trade is generally characterized by its extended workflows with complicated compliance and logistics processes, voluminous documentation
and time-consuming paper handling, cumbersome and costly peer-to-peer messaging and a great number of players from many different disciplines.
We
estimated that a typical process for an export shipment in China may involve 1 exporter, 8 government agencies and authorities and 12
various logistics and financial service providers with more than 60 persons involved in 13 different work processes that generate more
than 55 trade compliance and logistics documents and 150 information or message exchanges.
Conventional
and traditional applications have enhanced the functional performance of global trade organizations, but are limited at establishing
trusted relationships, allowing transparency because of inconsistent information sharing, and enabling collaboration across organizational
boundaries among all players.
We
believe blockchain technologies can not only address the shortfalls of conventional and traditional applications, but will disrupt the
global trade industry and change how global trade is conducted with a collaborative model that can drastically enhance overall efficiency
and reduce trade cost for all players in the global trade ecosystem.
Strengths
of Powerbridge BaaS Services
We
are designing and developing our
Powerbridge BaaS Services
to provide corporate and government organizations involved
in global trade with significant improvements in workflow performance, reduction in document handling, optimization of synchronized peer-to-peer
exchange of information, and enhancement of overall productivity and efficiency, with the following potential core attributes and advantages:
●
Distributed and shared
    ledgers
of immutable data and records for transactions are on trusted and secured global trade blockchain networks that
    are made accessible only to permissioned trading partners and peers.
●
Encoded smart contract
execution
    are validated and automated based on pre-defined business rules and contractual conditions for global trade peer-to-peer transactions
    or executions that are authenticated and verifiable in real time.
●
End-to-end visibility and
    transparency
throughout the global trade supply chain ensures real time exchange of events and documents among all trading parties
    and peers in the ecosystem.
●
Provenance and traceability
are
    enabled with time-stamped records or documents and immutable provenance records of import and export goods that ensure accuracy for
    audit and regulatory compliance purposes.
●
Extensible and interoperable
capabilities
    enable the blockchain networks to connect and integrate with multiple other blockchain networks and with applications and systems
    of the permissioned members.
●
Lower total cost of
    ownership
with services offered in the cloud with minimum investment in software and hardware for rapid deployment as well
    as intuitive, easy-to-use user interface on the internet and via mobile devices.
54
We
offer our cloud-based BaaS services through commercial cloud platform services that provide infrastructure as a service for servers,
storage, networking and database. We currently plan to generate our revenue on a subscription basis with single use, group and enterprise
editions and from professional service fees.
We
began designing and developing our
Powerbridge BaaS Services
infrastructure and services in 2017. We have our own development
teams and work with third-party providers of infrastructure technologies. We recently introduced our services as pilot projects on a
limited basis to selected customers.
We
used a portion of the proceeds from the IPO to accelerate our R&D in order to expedite our service offerings to drive product adoption.
We believe our domain knowledge, product expertise and customer relationships will enable us to capture significant market share with
Powerbridge
BaaS Services.
Our
BaaS Services
Corporate
and government organizations involved in global trade are facing increasing challenges with existing available technology and applications
which hinder their productivity and efficiency. Conventional and traditional applications are inadequate and ineffective in addressing
challenges which include:
●
Conventional and traditional
    software systems used by each global trade participant is largely disjointed with inefficient integration and synchronization.
●
Information across organizational
    boundaries is inconsistent and not fully transparent with many "blind spots" on the global trade supply chain.
●
Peer-to-peer messaging
    or information exchanges among global trade players are complex, cumbersome, time-consuming and costly.
●
Manual handling of paper-based
    global trade documents is time consuming, resource draining and error-prone.
●
Compliance risk assessment
    and control are ineffective and costly due to lack of sufficient and credible information.
We
believe our
Powerbridge BaaS Services
will address the imminent challenges faced by corporate and government organizations
in global trade. Our services are being developed to offer potential benefits including:
●
Trusted and secured blockchain
    networks where all permissioned players in the global trade ecosystem can synchronize and collaborate.
●
End-to-end visibility and
    transparency of goods and documents throughout the global trade supply by all permissioned players.
●
Synchronized cross-organizational
    workflows and secured exchange of transaction events and messages among global trade players.
●
Digitized and automated
    exchange of global trade documents in real time with assurance of authenticity and immutability.
●
Enhanced compliance risk
    assessments with increased level of information transparency and assured provenance of import and export goods and services.
55
Our
services are provided as consortium blockchain networks designed for all players in the global trade ecosystem, including import and
export businesses and manufacturers, logistics service providers, financial service providers, and government agencies and authorities
with the following potential benefits to each group of players:
●
Businesses can benefit
    from full transparency of a streamlined supply chain that allows for greater predictability, earlier detection of problems, enhanced
    inventory management and better overall resources allocation.
●
Logistics service providers
    can benefit from increased visibility on the supply chain, enhanced document processing and shorter processing time, improved service
    reliability and lower cost to trade businesses.
●
Financial service providers
    can benefit from increased visibility into key trade events which mitigate risks and increase assurances, and automated document
    exchange and processing for loan, insurance and settlement services.
●
Government agencies can
    benefit from enhanced monitoring and control on flow of goods, more effective risk assessments and interventions, increased sharing
    of information among agencies, and higher overall compliance efficiency.
●
Government authorities
    for trade zones and ports can benefit from increased operational efficiency driven by increased transparency, improved document flow
    and faster processing time, and higher throughput for goods and cargos.
Our
services are designed to be built on an open and extensible blockchain infrastructure. This will enable us to efficiently add and expand
our services over time. We intend to offer our services in sequence starting with regional or functional blockchain networks with fewer
players and gradually expanding to larger ones and eventually covering the entire global trade supply chain.
We
believe this approach of targeting subsets of the global trade ecosystem by leveraging our deep domain knowledge and strong customer
relationships will allow us to continually test and fine-tune our services and incrementally drive product and market adoption which
may take considerable time and effort. We plan to initially offer the following services on a regional or functional basis:
●
Compliance Blockchain
    Services
are intended for government agencies including customs, inspections and quarantines, cross-border control, maritime
    affairs, foreign exchange, tax and duty, and trade commerce, and government authorities such as free trade and bonded trade zone
    authorities, port and terminal authorities and operators, and other trade regulated zone authorities. Our services will provide multiple
    government agencies and authorities a single view of trade events and documents on designated global trade blockchain networks, which
    allow them to synchronize and streamline their regulatory compliance activities with enhanced compliance effectiveness and operational
    efficiency.
Government
agencies will be able to use our services to increase the effectiveness of risk assessments and interventions in monitoring and controlling
the flow of goods and documents with increased level of transparency and assurance of provenance. Trade zone and port authorities will
be able to increase their service and operations efficiency with enhanced transparency and visibility, faster processing time and higher
cargo throughput. Our blockchain services will be capable of integrating with the software systems from government agencies and authorities
for real time monitoring and synchronization and from global trade businesses and logistics service providers for the government agencies
and authorities to better service them.
●
Logistics Blockchain
    Services
are being designed for businesses and manufactures involved in global trade as well as customs and freight forwarding
    service providers. The customs and freight forwarding processes are complicated and cumbersome with multiple parties involved and
    many voluminous documents to handle. Customs and freight forwarders represent the businesses to take on a number of tasks including
    making import and export declarations with customs and inspection agencies, arranging for cargo shipments with the shippers and carriers,
    and handling logistics and compliance works in the regulated trade zones. These processes generate large sets of documents and require
    constant communication among the involved parties.
Our
services will allow all involved participants operating in the customs and freight forwarding process to better connect and synchronize
on the blockchain networks. Our customers will use our services to streamline cross-organizational workflows and have real time access
to monitor and manage progress throughout the process. Our blockchain networks will be capable of connecting and integrating with the
software systems from permissioned trade businesses and logistics service providers, with features and functionalities including automated
contract execution, expedited service remittance, streamlined document handling, and synchronized information exchange.
56
●
Supply Chain Blockchain
    Services
are being designed to provide end-to-end visibility and transparency to all stakeholders or players throughout
    the cross-border global trade supply chain, including import and export businesses and manufacturers, logistics service providers,
    transportation shippers and carriers, financial service providers, insurance companies, settlement service providers, government
    agencies and authorities, and all other players. Our services will enable real time sharing of trade data and events on distributed
    and trusted blockchain networks for broad synchronization and collaboration among all players in the global trade ecosystem in which
    the entire trade process is facilitated and optimized.
Our
services will provide secured information and message exchanges on the blockchain networks that enable all players to have real time
access to flows of documents and goods along the supply chain, allowing them to synchronize and collaborate across organizational boundaries
in order to efficiently handle the complicated and cumbersome compliance and logistics processes. Our customers can use our services
to track goods and documents, identity and manage milestone exceptions, trace the provenance of goods, and share information with their
trade partners and customers. We intend to first offer our services in China and subsequently expand to integrate the international players
on the global trade supply chain.
●
Import & Export
    Loan and Insurance Processing Blockchain Services
are being designed for businesses and financial service providers involved
    in global trade. Our blockchain services will empower businesses with easier and faster processing for loans, insurance and settlements
    with lower financing cost. Financial service providers can have improved visibility on key events on the blockchain-enabled trade
    supply chain, resulting in better and more assured loan decisions that mitigate financing risks. Insurance companies and settlement
    service providers will be able to issue trade insurances and provide settlement services with more streamlined workflows and higher
    processing efficiency with our blockchain services.
Through
our services, transaction events or activities among businesses on the global supply chain, such as sales and invoicing, purchasing and
ordering, and shipping and receiving are programmed or encoded with pre-defined business rules and contractual conditions, allowing for
validated and automated transactions to occur. These transaction events and records on the secured blockchain networks will be authenticated
and time-stamped, thus bringing substantial proof and immutable evidence to the financial service providers for effective credit and
risk assessment when offering their loans and other services to the businesses.
Our
Technology
Our
solutions and services are built from our multiple proprietary technology platforms which are developed based on industry leading open-source
infrastructure technologies. Our technology platforms are designed for high performance reliability, flexibility and scalability, allowing
us to expand our solutions and services rapidly and efficiently to consistently address the needs of our global trade customers.
Our
technology platforms include
Powerbridge System Platform
for our
Powerbridge Digital Solutions
,
Powerbridge
SaaS Platform
for our
Powerbridge SaaS Services
, and
Powerbridge BaaS Platform
for our
Powerbridge
BaaS Services
.
We
are developing our own technologies as well as working with other third-party technology infrastructure partners to expand the scope
of our solutions and services with the best use of big data, artificial intelligence and Internet of Things.
57
Powerbridge
System Platform
Powerbridge
System Platform
is our proprietary technology platform from which we develop our
Powerbridge Digital Solutions
.
Our platform is built on Java Spring and Microsoft Net frameworks as well as other open source technologies.
Powerbridge
System Platform
consists of modular technology and business components that enable us to provide mission critical applications
and solutions in trade operations, trade logistics and regulatory compliance to our corporate and government customers. Our platform's
core capabilities include:
●
Scalable Modular Architecture
.
    Our scalable architecture consists of a robust set of modular technology and business components that allows for rapid and efficient
    development and deployment to support complex mission-critical business processes and transactions in global trade.
●
Flexible Configuration
    Modeling
. Leveraging our deep domain knowledge, product expertise and customer experience in global trade applications, we have
    developed a flexible system configuration modeling that minimize development resources and time without repetitive coding for common
    or special business and operations use cases.
●
Reliable Enterprise
    Grade Performance
. Our platform provides the infrastructure for reliable and high performance that can be built with multiple
    programing languages, support all commonly used databases, operate with web browser/server or client/server models, and generate
    dynamic interactive user interfaces.
●
Diverse Industry Applications
    Supported.
Our platform supports product applications and system solutions that are used by global trade businesses in a
    wide variety of industries such as automotive, pharmaceutical and consumer goods and involving different government agencies and
    authorities.
Powerbridge
SaaS Platform
Powerbridge
SaaS Platform
is built based on the open source Spring Cloud and other industry leading technologies for developing, deploying
and operating our software-as-a-service. It is capable of running in multiple designated data centers and cloud environments on commercially
available infrastructure as a service platform.
Powerbridge
SaaS Platform
is the technology infrastructure upon which we are developing our
Powerbridge SaaS Services
designed
to provide on-demand services in trade operations, trade logistics and regulatory compliance with a multi-tenant and microservice architecture.
Our core technology capabilities include:
●
Secured Multi
-
Tenant
    Architecture
. Our multi-tenant architecture is designed to operate a single instance of a software application simultaneously
    for multiple organizations or tenants. Each tenant is operating in virtual isolation from each other. Our multi-tenancy architecture
    ensures and maintains data security and integrity for our customers.
●
Scalable Microservice
    Architecture
. Our microservice architectural approach allows us to provide scalable and reliable application services as a suite
    of independently deployable, modular services in which each service can run a unique business or transaction process based on a lightweight
    mechanism with well-defined business rules and logic.
●
Ease of Integration
    and Configuration
. We provide a set of application programming interfaces that is designed to enable our customers to integrate
    and configure our services quickly and seamlessly with their systems and applications, as well as with third-party's systems.
●
Extensible Technology
    Platform
. Our application services are built on a single platform that leverages the shared business and technology components,
    enabling us to rapidly expand our product features and functionalities without disruption and seamlessly integrate our services with
    one another.
58
Powerbridge
BaaS Platform
We
are designing and developing our proprietary
Powerbridge BaaS Platform
based on the open source Hyperledger Fabric framework
and other third-party frameworks that provide the blockchain infrastructure for shared ledger, smart contract, consensus algorithm, distributed
storage, encryption and security, and network operations.
Powerbridge
BaaS Services
are built on top of our blockchain platform that is designed to provide high scalability and performance characteristics,
consisting of multiple technology engines that support the various business component models specific for trade transaction, trade logistics
and regulatory compliance in global trade:
●
Smart Contract Engine
is
    designed to provide a complete and automated blockchain service for the coding, registering, authorizing, releasing, triggering,
    executing, updating and cancelling of the business contracts or transactions based on pre-defined contractual conditions or pre-defined
    business rules that are encoded into the smart contracts between trading or transactional parties.
●
Member Service Engine
is
    intended for authenticating and managing the identity of the blockchain network members or participants with encrypted public or
    private key generation and maintenance as well as managing member accounts, maintaining multi-level permission access control and
    conducting risk monitoring and compliance auditing on selective member transactions.
●
Network Service Engine
is
    designed for managing network connectivity with applications, programing interfaces and structured query languages, member consensus
    via consensus algorithms and permission mechanisms, secured and authenticated peer-to-peer data transmissions and exchanges, and
    transaction record storage with key value and Merkel hash value on distributed shared ledgers and/or in cloud-based database environments.
●
Network Operations Engine
is
    intended to monitor, manage and maintain the blockchain network operations, including network configuration, throughput and time
    consumption, hardware resource and allocation, fraud and emergency situation detection, network system update and announcement, and
    other network functions and operations as well as network performance and trend analysis and reporting.
We
are continuing to enhance the technology capabilities of
Powerbridge BaaS Platform
while it is under development. We
believe our platform offers all the governance and operations benefits derived from blockchain technology with the following differentiated
and distinctive advantages:
●
Global Trade Centric
    Business Components.
We believe our domain knowledge, product expertise and customer experience will allow us to develop
    a platform that forms a strong and powerful foundation for continually offering and expanding our services to drive product adoption
    with this new and exciting technology.
Our
BaaS services will be supported by our business components which are stacked on top of and driven by our technology engines. Our business
components will include trade transaction, trade operations, trade logistics and regulatory compliance, which are designed to address
the mission critical needs of global trade businesses, government agencies and authorities, and logistics and other service providers
with comprehensive services from document handling to customs processing and to transaction processing.
●
Data Separation Modeling.
Global
    trade transaction processes typically generate voluminous data to which organizations have different needs and ways to handle them.
    Some organizations may choose not to have their sensitive data stored on the blockchain networks. We are developing a data separation
    model that can allow data to be recorded and stored on the shared ledgers, but also have more sensitive data securely stored off
    the blockchains, which has the added benefit of minimizing data storage space.
We
intend to further separate the smart contract blockchains and workflow blockchains. Smart contract blockchains and the corresponding
contract codes and hash values are recorded and stored on the shared ledgers as the contract codes can be called and used for numerous
times. Data generated from the workflow blockchains and the smart contract blockchains can be designated as on or off the shared ledgers.
This further ensures data security and reduce data storage on the blockchains.
59
Other
Technologies and Applications
We
intend to continue leveraging our industry expertise and product knowledge with the use of disruptive technologies such as big data,
artificial intelligence and Internet of Things to enhance our core technology capabilities and continually increase the scope of our
solutions and services to our customers.
●
Big Data
. We are
    developing our big data technology and applications designed to acquire, store, process, analyze and visualize large scaled structured
    and unstructured global trade transaction and compliance data. Our technology is intended to augment our solutions and services in
    trade operations, trade logistics and regulatory compliance in global trade, including regulatory risk control, compliance command
    operations, cross-border trades and processing, logistics matching services, among others.
We
intend to use ETL (extract, transform and load) technologies for acquiring and processing massive volumes of data such as customs declarations
and shipping manifests from various government and commercial sources. We intend to build our big data platform based on a distributed
data warehouse architecture using the open source Hadoop and Spark frameworks, allowing for high performance in multi-dimensional correlation
analytics, real-time complex event processing, and distributed data query and retrieval.
Our
correlation analytics are being designed for multi-dimensional and real-time correlation of large quantities of structured, semi-structured
and unstructured data from different data sources. Our complex event processing technology is designed to monitor and track data relating
to events as they occur in real time and provide data insights based on pre-defined business rules. Our data query and retrieval are
intended to support query and retrieval from multiple data sets and provide multi-dimensional data displays.
Our
data visualization and interactive data mining technologies is designed to provide intuitive and interactive visualization tools and
dashboards that are easy to use and can be customized for displaying critical business performance data or metrics. Our visualization
tools and dashboards are designed to support interactive data mining and a variety of display formats including charts, graphs and tables
as well as three-dimensional displays and geographic information system mappings.
●
Artificial Intelligence
.
    We work with third party artificial intelligence technology providers to enhance our solutions and services in global trade. Our
    artificial intelligence applications facilitate and support biometric facial and fingerprint recognitions as well as object recognition
    for transportation vehicles and shipping containers. We plan to develop our machine learning capabilities to provide optimized matching
    and recommendation services for global trade logistics and processing.
Our
biometric face recognition application is used for security and enforcement measures typically at checkpoints of cross-border trade operations
and regulated trade zone facilities for identifying and verifying a person from a digital image or a video frame by comparing distinct
facial features with given facial images extracted from our database. Our applications are designed to support concurrent processing
of multiple persons. Our fingerprint recognition application is also applied for security measures in some cross-border trade settings.
Our
object recognition application is designed to identify and verify transportation vehicles at ports and terminals, regulated trade zones
and cross-border checkpoints by capturing, processing, and identifying still images and video images. Further, through machine learning
computation, transportation vehicles in these facilities can be automatically directed with optimized routes to their designated destinations
such as a warehouse or a container depot.
We
plan to enhance our technology capabilities in machine learning algorithms that learn from experience, identify patterns and make predictions
driven by a large set of global trade data. We intend to leverage our domain knowledge and industry experience to design and develop
machine learning algorithms and distributed computing that can optimize the efficiency in the matching of trade logistics services among
trade businesses and service providers.
60
●
Internet of Things.
Internet
    of Things ("IoT") refers to the network of physical objects embedded with sensors, electronics, and network connectivity
    that allow these objects to collect and exchange data. We work with third-party technology companies to provide IoT applications
    to process, store, and analyze IoT data from trade related trucking vehicles, weighting stations, and shipping containers. Our applications
    are integrated with the target object's IoT systems and software systems of government authorities.
Trucking
vehicles, weighting stations and shipping containers are tightly regulated at ports and terminals, regulated trade facilities and cross-border
facilities. Our IoT applications are used by government authorities to monitor and control these objects. Our applications are able to
authenticate objects, facilitate data exchanges, connect through gateways and application programming interfaces, and provide event-based
IoT data processing, analysis and visualization.
Our
IoT applications allows fast and accurate identification of trucking vehicles as they pass through the checkpoints at regulated areas
with a high throughput capacity and rapid data transmission, which facilitates efficient control and fast checkpoint release. Our IoT
applications can combine with the use of global positioning systems, global system for mobile communication and global information system
to enable government authorities complete monitoring and control of the trucking vehicles.
Our
IoT applications are capable of acquiring and processing a high volume of IoT enabled data from radio frequency identification and other
types of sensor devices installed on intermodal shipping containers operating in many different trade facilities or settings such as
container yards, shipping ports, bonded warehouses and air terminals. Our IoT applications can also process IoT data from electronic
locks on the containers for automated container lock handling.
Our
Customers
Our
customers are international trade businesses and manufacturers, government agencies and authorities, logistics service and other providers,
primarily located in China.
Our
international trade business and manufacturer customers are import and export companies, manufacturers engaged in import and export,
inward processed manufacturers who use imported raw materials, components and parts, packing and other materials to produce finished
products for exporting, and cross-border eCommerce operators who conduct cross-border business for air packaged consumer products.
Our
government customers are provincial and regional government agencies, government authorities and government-owned organizations. Government
agencies include customs, inspection and quarantine, border enforcement, maritime affair, transportation and commerce. Government authorities
include authorities for ports, bonded and free trade zones and government-owned organizations include Chinaport and other international
trade related organizations.
Our
logistics service and other provider customers include freight forwarding and shipping agent firms, customs and inspection brokers, warehouse
operators, transportation companies and other international trade related service organizations as well as financial and insurance service
providers engaged in global trade services.
Our
customers include (i) international trade businesses and manufacturers; (ii) government agencies and authorities; and (iii) logistics
and other various service providers.
61
We
plan to expand our market coverage to international markets to service customers in different B&R countries. We also intend to provide
our solutions and services to corporate and government customers in the countries or markets we intend to target.
Sales
and Marketing
Our
sales and marketing teams work closely together to drive market awareness, develop and manage leads, and develop and build customer relationships
to increase revenue growth. We sell our solutions and services to corporate and government customers through our direct sales organization,
indirect channel partners and strategic government partners.
Our
sales team is organized by customer type and geography. Our direct sales force is supported by sales engineers and service consultants.
Our indirect channel partners include value added resellers, system integrators, software and application providers, system hardware
providers and other referral partners. As of the date of this Annual Report, our sales teams consisted of 17 full-time sales and marketing
personnel. During fiscal years 2022, 2021 and 2020, our sales and marketing expense were approximately $2.0 million, $2.8 million and
$2.7 million, respectively, representing 18.7%, 8.6% and 10.0% of our total revenues for fiscal years 2022, 2021 and 2020, respectively.
We
generate customer leads, accelerate sales opportunities and build brand awareness through our marketing programs. Our marketing programs
target management and technology executives of global trade businesses, government agencies and authorities, and various service providers,
including user conferences, sponsored events and product promotions.
We
continue to develop strategic partnerships with provincial and local government agencies, technology organizations, trade zone authorities
and other government organizations, i.e., regional customs and commerce agencies, bonded and other trade facilities, and Chinaport and
other state-owned entities, to drive sales by leveraging their strengths and resources in targeted customer base, strong regional market
influence and extensive government and industry resources.
As
part of our overall strategy, we plan to expand into international markets to provide global trade software solutions and services by
"piggybacking" with the infrastructure builders and other Chinese organizations who participate in the B&R's development
of global trade infrastructures in the B&R partnering countries.
Research
and Development ("R&D")
Our
R&D organizations consist of dedicated engineering and technology employees, who are responsible for the design, development, testing
and delivery of all aspects of our technologies, solutions and services. As of the date of this Annual Report, our team consists of 90
full-time R&D personnel. We incurred expenses of $3,459,987, $2,611,742 and $2,780,944 in R&D in fiscal year 2022, 2021 and 2020,
respectively.
The
majority of our R&D team is based in our Zhuhai office and to a lesser degree in our branch offices. Our team is further apportioned
into smaller agile development groups to foster continuous innovation and rapid delivery.
We
believe we have a strong R&D culture that rapidly and consistently delivers high quality products. We plan to continue to invest
substantial resources in R&D to drive core technology innovation and bring new solutions and services to market.
62
Competition
The
market for global trade software application and system integration services is highly competitive and fragmented. We face intensive
competition. Our main sources of current and potential competition fall into the following categories:
●
Regional global trade application
    providers offering regulatory compliance, trade logistics and trade processing software and systems.
●
Software vendors providing
    online or cloud-based single point or single feature functional global trade application products and services.
●
Online global trade hubs
    or portals offering specific global trade transactional and processing application products and services.
●
Enterprise resource planning,
    supply chain and logistics software application companies offering global trade software, systems and services.
●
Government organizations
    providing global trade related regulatory compliance and trade logistics applications and systems.
●
Emerging blockchain, artificial
    intelligence and IoT technology providers offering technologies and software for global trade applications.
We
believe the following competitive attributes are necessary for us to compete successfully in our industry:
●
Deep domain knowledge,
    industry experience and product expertise in global trade software applications and system integration to address customer needs.
●
Enablement of emerging
    and disruptive technologies to develop and provide global trade software applications and services.
●
Enterprise grade performance
    level in scalability, reliability and security as well as cost of ownership and ease of deployment.
●
Breadth, depth and quality
    of application features and functionalities that are able to operate in multiple infrastructures such as in cloud, on premises or
    both.
●
Capability of technology
    platforms in integrating and interoperating with legacy and other enterprise infrastructures and third-party applications.
●
Strength of sales and marketing
    as well as customer support in service responsiveness and level of customer satisfaction.
●
Brand awareness and reputation,
    size of customer base and level of user adoption to new and disruptive technologies and applications.
●
Ability to capture market
    share in China and expand into international markets to operate as a global player in servicing multiple markets and countries.
We
believe we compete favorably on the basis of the competitive factors listed above. Some of our competitors have substantially greater
financial, technical and other resources, greater name recognition, larger sales and marketing budgets, broader distribution channels
and larger or more intellectual property portfolios.
63
Intellectual
Property
The
PRC has domestic laws for the protection of rights in copyrights, trademarks and trade secrets. The PRC is also a signatory to all of
the world's major intellectual property conventions, including:
●
Convention establishing
    the World Intellectual Property Organization (June 3, 1980);
●
Paris Convention for the
    Protection of Industrial Property (March 19, 1985);
●
Patent Cooperation Treaty
    (January 1, 1994); and
●
Agreement on Trade-Related
    Aspects of Intellectual Property Rights (November 11, 2001).
The
PRC Trademark Law, adopted in 1982 and revised in 2013, with its implementation rules adopted in 2014, protects registered trademarks.
The Trademark Office of the State Administration of Industry and Commerce of the PRC, handles trademark registrations and grants trademark
registrations for a term of ten years.
We
rely on a combination of trademark, fair trade practice, copyright and trade secret protection laws and patent protection in China and
other patent jurisdictions, as well as contractual restrictions, to protect our intellectual property. We entered into comprehensive
confidentiality agreements with our management and consultants. We have standard confidentiality terms with all other employees. We also
control access to and distribution of our documentation and other licensed information.
Despite
our efforts to protect our proprietary technology and our intellectual property rights, unauthorized parties may attempt to copy or obtain
and use our technology to develop applications with the same functionality as our products. Policing unauthorized use of our technology
and intellectual property rights is difficult. Our patent applications may not issue as patents, and if they do issue as patents, they
may not provide meaningful protection against competitors. We expect that software in our industry may be subject to third-party infringement
claims as the number of competitors grows and the functionality of applications in different industry segments overlaps. Any of these
third parties might make a claim of infringement against us at any time. We require our employees to enter into non-disclosure agreements
to limit access to and distribution of our proprietary and confidential information. These agreements generally provide that any confidential
or proprietary information developed by us or on our behalf must be kept confidential. These agreements also provide that any confidential
or proprietary information disclosed to third parties in the course of our business must be kept confidential by such third parties.
In the event of trademark infringement, the State Administration for Industry and Commerce has the authority to fine the infringer and
to confiscate or destroy the infringing products.
As
of the date of this Annual Report, we have 13 registered patent, 125 registered software copyrights and 23 registered trademarks in the PRC.
In addition, we own 11 URL designations and domain names, including powerbridgetech.com, powerstreamdigital.com, metafusiondigital.com,
powermetadigital.com, powercrypto.pro, pbts.cloud, pbtyun.com, pbtcloud.com, cs-estone.com, erp-china.com, and powerbridge.com.
We
do not have applications pending in any jurisdiction other than China. We do not know if these applications will be granted as patents,
and if they are granted as patents whether they will provide meaningful protection against their party competitors.
Facilities
We
purchased one real property in 2021 with an aggregate contract amount of RMB 30,678,302 for our new headquarter office location ("Zhuhai
HQ Office"), which was fully paid as of December 31, 2022. Zhuhai New Office with space totaling 1820 m
2
, located in
Floor 8
th
and 9
th
, C2 Building, Advance Business Park, No.29 Lanwan Road, Tangjia Bay, Xiangzhou District, Zhuhai,
China, has been put into use in August 2022. We intend to procure additional space as we add employees and expand geographically. We
believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative
space will be available to accommodate any such expansion of our operations. As of the date of this Annual Report, we maintain the following
facilities in China. In addition to our headquarters, we lease space in Zhuhai, Wuhan, Changsha, Nanning, and Hangzhou. Rent expenses
amounted to $162,799, $307,497 and $305,832 for the years ended December 31, 2022, 2021 and 2020, respectively.
64
Facility
Address
Space (㎡)
Wuhan Office
Rm F, 25
th
Fl West, No.562, Construction Avenue (Guomao Xindu), Jianghan, Wuhan, Hubei, China
167
Changsha Office
Rm 1608, 16
th
Fl, Block C3, Wanda Plaza, No. 589 Zhongshan Road, Kaifu, Changsha, Hunan 410015, China
351
Nanning Office
Suite 2206-2209, 22
nd
Fl, Block 2, 118 Dongge Road
Qingxiu, Nanning, Guangxi 530012, China
389
Hangzhou Office
Rm 616, Jiang Tai Jing 3
rd
Building, Xihu District, Hangzhou
35
Zhuhai HQ Office
8
th
and 9
th
Fl, C2 Building, Advance Business Park, No.29 Lanwan Road, Tangjia Bay, Xiangzhou District, Zhuhai, China
1820
Employees
As
of the date of this Annual Report, we had a total of 177 full-time employees, of which 90 are in research and development, 17 are in
sales and marketing, 38 are in technical and customer services, and 32 are in general administration.
We
have standard employment, comprehensive confidentiality and non-compete agreements with our management and standard confidentiality and
non-compete terms with all other employees. As required by laws and regulations in China, we participate in various social security plans
that are organized by municipal and provincial governments, including pension insurance, medical insurance, unemployment insurance, maternity
insurance, job-related injury insurance and housing fund. We are required by PRC laws to make contributions to employee social security
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.
We
believe that we maintain a good working relationship with our employees, and we have not experienced any labor disputes. None of our
employee is represented by a labor union or covered by collective bargaining agreements. We have not experienced any work stoppages.
65
Legal
Proceedings
From
time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We
are not currently a party to any legal proceedings that in the opinion of the management, if determined adversely to us, would have a
material adverse effect on our business, financial condition, operating results or cash flows. Regardless of the outcome, litigation
can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Government
Regulation Relating to Our Business
Regulations
Related to Foreign Investment
Investment
activities in China by foreign investors are principally governed by the Catalogue for the Guidance of Foreign Investment Industries,
which was promulgated by MOFCOM and the National Development and Reform Commission, as amended from time to time. Industries listed in
the catalogue are divided into three categories: encouraged, restricted and prohibited. Industries not listed in the catalogue are generally
open to foreign investment unless specifically restricted by other PRC regulations. Establishment of wholly foreign-owned enterprises
is generally allowed in encouraged industries. For some restricted industries, foreign investors can only conduct investment activities
through equity or contractual joint ventures, while in some cases PRC partners are required to hold the majority interests in such joint
ventures. In addition, projects in the restricted category are subject to higher-level governmental approvals. Foreign investors are
not allowed to invest in industries in the prohibited category.
Regulations
Relating to PRC Information Technology Service Industry
According
to the Catalog on Foreign Invested Industries (2017 Revision) issued by the National Development and Reform Commission and the Ministry
of Commerce, IT services fall into the category of industries in which foreign investment is encouraged. In 2018, The National Development
and Reform Commission and the Ministry of Commerce launched Special Administrative Measures for Access of Foreign Investment (Negative
List) (Version 2018)("the 2018 Negative List") to replace part of the Catalog on Foreign Invested Industries (2017 Revision)
in respect of the category of industries in which foreign investment is restricted or prohibited, and foreign investment in IT services
is neither restricted nor prohibited according to the 2018 Negative List. The State Council has promulgated several notices since 2000
to launch favorable policies for IT services, such as preferential tax treatments and credit support.
Under
rules and regulations promulgated by various Chinese government agencies, enterprises that have met specified criteria and are recognized
as software enterprises by the relevant government authorities in China are entitled to preferential treatment, including financing support,
preferential tax rates, export incentives, discretion and flexibility in determining employees' welfare benefits and remuneration.
Software enterprise qualifications are subject to annual examination. Enterprises that fail to meet the annual examination standards
will lose the favorable enterprise income tax treatment. Enterprises exporting software or producing software products that are registered
with the relevant government authorities are also entitled to preferential treatment including governmental financial support, preferential
import, export policies and preferential tax rates.
Companies
in China engaging in information systems integration were used to be required to obtain qualification certificates from the Ministry
of Industry and Information Technology. "Information systems integration" means plan, design, development, implementation,
service and safeguard of computer system and network system. Currently the Company does not engage in information system integration
business, therefore the Company is not required to have such qualification certificates. Companies planning to set up computer information
systems may only retain systems integration companies with appropriate qualification certificates. The qualification certificate is subject
to review every two years and is renewable every four years. In June 2015, the China Information Technology Industry Federation (CITIF)
promulgated the Appraisal Condition for Qualification Grade of Information Systems Integration (Provisional) to elaborate the conditions
for appraising each of the four qualification grades of systems integration companies. Companies applying for qualification are graded
depending on the scale of the work they undertake. The grades range from Grade 1 (highest) to Grade 4 (lowest) in the scale of the work
the respective companies can undertake.
In
2009, the Ministry of Commerce and the Ministry of Industry and Information Technology jointly promulgated a rule aiming to protect a
fair competition environment in the PRC service outsourcing industry. This rule requires that each of the domestic enterprises which
provides IT and technological BPO services and each of its shareholders, directors, supervisors, managers and employees should not violate
the service outsourcing contract to disclose, use or allow others to use the confidential information of its customer. Such enterprises
are also required to establish an information protection system and take various measures to protect customers' confidential information,
including causing their employees and third parties who have access to customers' confidential information to sign confidentiality
agreements and or non-competition agreements.
66
Regulations
Related to Labor and Social Security
Pursuant
to the Labor Law, promulgated by National People's Congress in January 1995, and the Labor Contract Law, promulgated by Standing
Committee of the National People's Congress in June 2007 and amended in December 2012, employers must execute written labor contracts
with full-time employees. If an employer fails to enter into a written employment contract with an employee within one year from the
date on which the employment relationship is established, the employer must rectify the situation by entering into a written employment
contract with the employee and pay the employee twice the employee's salary for the period from the day following the lapse of
one month from the date of establishment of the employment relationship to the day prior to the execution of the written employment contract.
All employers must comply with local minimum wage standards. Violation of the Labor Law and the Labor Contract Law may result in the
imposition of fines and other administrative and criminal liability in the case of serious violation.
On
December 28, 2012, the PRC Labor Contract Law was amended with effect on July 1, 2013 to impose more stringent requirements on labor
dispatch. Under such law, dispatched workers are entitled to pay equal to that of full-time employees for equal work, but the number
of dispatched workers that an employer hires may not exceed a certain percentage of its total number of employees as determined by the
labor administrative department of the State Council. Additionally, dispatched workers are only permitted to engage in temporary, auxiliary
or substitute work. According to the Interim Provisions on Labor Dispatching promulgated by the Ministry of Human Resources and Social
Security on January 24, 2014, which became effective on March 1, 2014, the number of dispatched workers hired by an employer shall not
exceed 10% of the total number of its employees (including both directly hired employees and dispatched workers). The Interim Provisions
on Labor Dispatching require employers which are not in compliance with the PRC Labor Contract Law in this regard to reduce the number
of its dispatched workers to below 10% of the total number of its employees prior to March 1, 2016. In addition, an employer is not permitted
to hire any new dispatched worker until the number of its dispatched workers has been reduced to below 10% of the total number of its
employees.
Enterprises
in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance funds,
namely a pension 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, and contribute to the plans or funds in amounts equal to certain percentages of salaries
of the employees as specified by the local government from time to time at locations where they operate their businesses or where they
are located. According to the Social Insurance Law, an employer that fails to make social insurance contributions may be ordered to rectify
the noncompliance and pay the required contributions within a stipulated deadline and be subject to a late fee of up to 0.05% or 0.2%
per day, as the case may be. If the employer still fails to rectify the failure to make social insurance contributions within the stipulated
deadline, it may be subject to a fine ranging from one to three times the amount overdue. According to the Regulations on Management
of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the
required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement.
Our PRC operating entities have not made adequate employee benefit payments and we may be required to make up the contributions for these
plans as well as to pay late fees and fines. See "Risks Related to Doing Business in China - Failure to make adequate contributions
to various mandatory social security plans as required by PRC regulations may subject us to penalties".
Regulations
on Intellectual Property Rights
The
PRC Copyright Law, as amended, together with various regulations and rules promulgated by the State Council and the National Copyright
Administration, protect software copyright in China. These laws and regulations establish a voluntary registration system for software
copyrights administered by the Copyright Protection Center of China. Unlike patent and trademark registration, copyrighted software does
not require registration for protection. Although such registration is not mandatory under PRC law, software copyright owners are encouraged
to go through the registration process and registered software may receive better protection. The PRC Trademark Law, as amended, together
with its implementation rules, protect registered trademarks. The Trademark Office of the State Administration for Industry and Commerce
handles trademark registrations and grants a renewable protection term of 10 years to registered trademarks.
67
Regulation
of Foreign Currency Exchange and Dividend Distribution
Foreign
Currency Exchange.
The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration
Regulations, most recently amended in August 2008. Payments of current account items, such as profit distributions and trade and service-related
foreign exchange transactions, can usually be made in foreign currencies without prior approval from the State Administration of Foreign
Exchange, or SAFE, by complying with certain procedural requirements. By contrast, approval from or registration with appropriate governmental
authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such
as the repayment of foreign currency-denominated loans.
On
March 30, 2015, SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming the Management Approach regarding
the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or SAFE Circular 19. Pursuant to SAFE Circular 19, the foreign
exchange capital of foreign-invested enterprises is subject to the discretional foreign exchange settlement, which means the foreign
exchange capital in the capital account of foreign-invested enterprises upon the confirmation of rights and interests of monetary contribution
by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) may be settled at the banks
based on the actual operation needs of the enterprises. The proportion of discretionary settlement of foreign exchange capital of foreign-invested
enterprises is currently 100%. SAFE can adjust such proportion in due time based on the circumstances of international balance of payments.
The
dividends paid by the subsidiaries to its shareholder are deemed shareholder income and are taxable in China. Pursuant to the Administration
Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), foreign-invested enterprises in China may purchase or remit foreign
exchange, subject to a cap approved by SAFE, for settlement of current account transactions without the approval of SAFE. Foreign exchange
transactions under the capital account are still subject to limitations and require approvals from, or registration with, SAFE and other
relevant PRC governmental authorities.
Dividend
Distribution.
The principal regulations governing the distribution of dividends by foreign holding companies include the Company
Law of the PRC (1993), as amended in 2013, the Foreign Investment assets or interests to a SPV, but failed to complete foreign exchange
registration of overseas investments as required prior Enterprise Law (1986), as amended in 2016, and the Administrative Rules under
the Foreign Investment Enterprise Law (1990), as amended in 2001 and 2014 respectively.
Under
these regulations, wholly foreign-owned investment enterprises in China may pay dividends only out of their retained profits, if any,
determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned investment enterprises in China
are required to allocate at least 10% of their respective retained profits each year, if any, to fund certain reserve funds unless these
reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends, and a
wholly foreign-owned enterprise is not permitted to distribute any profits until losses from prior fiscal years have been offset.
Circular
37
. On July 4, 2014, SAFE issued Circular 37, which became effective as of July 4, 2014. According to Circular 37, PRC residents
shall apply to SAFE and its branches for going through the procedures for foreign exchange registration of overseas investments before
contributing the domestic assets or interests to a SPV. An amendment to registration or filing with the local SAFE branch by such PRC
resident is also required if the registered overseas SPV's basic information such as domestic individual resident shareholder,
name, operating period, or major events such as domestic individual resident capital increase, capital reduction, share transfer or exchange,
merger or division has changed. Although the change of overseas funds raised by overseas SPV, overseas investment exercised by overseas
SPV and non-cross-border capital flow are not included in Circular 37, we may be required to make foreign exchange registration if required
by SAFE and its branches.
Moreover,
Circular 37 applies retroactively. As a result, PRC residents who have contributed domestic to implementation of Circular 37, are required
to send a letter to SAFE and its branches for explanation. Under the relevant rules, failure to comply with the registration procedures
set forth in Circular 37 may result in receiving a warning from SAFE and its branches, and may result in a fine of up to RMB 300,000
for an organization or up to RMB 50,000 for an individual. In the event of failing to register, if capital outflow occurred, a fine up
to 30% of the illegal amount may be assessed. PRC residents who control our company are required to register with SAFE in connection
with their investments in us. If we use our equity interest to purchase the assets or equity interest of a PRC company owned by PRC residents
in the future, such PRC residents will be subject to the registration procedures described in Circular 37.
68
New
M&A Regulations and Overseas Listings
On
August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission,
the State Administration for Taxation, the State Administration for Industry and Commerce, CSRC and SAFE, jointly issued the Regulations
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rule, which became effective on September
8, 2006 and was amended on June 22, 2009. This New M&A Rule, among other things, includes provisions that purport to require that
an offshore special purpose vehicle formed for purposes of overseas listing of equity interests in PRC companies and controlled directly
or indirectly by PRC companies or individuals obtain the approval of CSRC prior to the listing and trading of such special purpose vehicle's
securities on an overseas stock exchange.
On
September 21, 2006, CSRC published on its official website procedures regarding its approval of overseas listings by special purpose
vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take several months to
complete the approval process. The application of this new PRC regulation remains unclear with no consensus currently existing among
leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement.
The
corporate structure of the Group Companies shall not be deemed as "a foreign investor's merger and acquisition of a domestic
enterprise" as specified in the Article 2 of the New M&A Rule, so the Company is not required to obtain approval from the CSRC
for listing and trading of its shares. However, uncertainties still exist as to how the New M&A Rule will be interpreted and implemented
and our opinion stated above is subject to any new laws, rules and regulations or detailed implementations and interpretations in any
form relating to the New M&A Rule.
Regulations
on Offshore Parent Holding Companies' Direct Investment in and Loans to Their PRC subsidiary
An
offshore company may invest equity in a PRC company, which will become the PRC subsidiary of the offshore holding company after investment.
Such equity investment is subject to a series of laws and regulations generally applicable to any foreign-invested enterprise in China,
which include the Wholly Foreign Owned Enterprise Law, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Contractual
Joint Venture Enterprise Law, all as amended from time to time, and their respective implementing rules; the Administrative Provisions
on Foreign Exchange in Domestic Direct Investment by Foreign Investors; and the Notice of the State Administration on Foreign Exchange
on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment. Under the aforesaid laws and regulations,
the increase of the registered capital of a foreign-invested enterprise is subject to the prior approval by the original approval authority
of its establishment. In addition, the increase of registered capital and total investment amount shall both be registered with SAIC
and SAFE. Shareholder loans made by offshore parent holding companies to their PRC subsidiary are regarded as foreign debts in China
for regulatory purpose, which is subject to a number of PRC laws and regulations, including the PRC Foreign Exchange Administration Regulations,
the Interim Measures on Administration on Foreign Debts, the Tentative Provisions on the Statistics Monitoring of Foreign Debts and its
implementation rules, and the Administration Rules on the Settlement, Sale and Payment of Foreign Exchange. Under these regulations,
the shareholder loans made by offshore parent holding companies to their PRC subsidiary shall be registered with SAFE. Furthermore, the
total amount of foreign debts that can be borrowed by such PRC subsidiary, including any shareholder loans, shall not exceed the difference
between the total investment amount and the registered capital amount of the PRC subsidiary, both of which are subject to the governmental
approval.
C.
Our Structure
See
"Item 4. Information on the Company – A. History and Development of the Company."
D.
Property, Plants and Equipment
Information
regarding our property, plants and equipment is described in "Item 4. B. Business Overview."
Item
4A. UNRESOLVED STAFF COMMENTS
Not
applicable.
69
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. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere
in this Annual Report.
Overview
Powerbridge
Technologies Co., Ltd. is a company that was established under the laws of the Cayman Islands on July 27, 2018 as a holding company.
We
are a provider of software application and technology solutions and services to corporate and government customers engaged in global
trade. All of our customers are located in China. We currently generate most of our revenues from application development services, which
represent 36.7%, 63.3% and 82.5% of total revenue for the years ended December 31, 2022, 2021 and 2020, respectively. We also generate
revenue from consulting and technical support services, which represent 24.2%, 14.2% and 14.2% of our revenue for the years ended December
31, 2022, 2021 and 2020, respectively. Further, we also earn subscription service revenue from customers accessing our SaaS, which represent
7.2%, 2.9% and 3.3% of our revenue for the years ended December 31, 2022, 2021 and 2020. We started trading business for the year ended
December 31, 2021 and generated approximately $3.3 million and $6.3 million revenue from consumables sale for the years ended December
31, 2022 and 2021. For the years ended December 31, 2022, 2021 and 2020, our revenues were approximately $10.5 million, $32.1 million
and $26.7 million, respectively.
Coronavirus
("COVID-19") updates
The
COVID-19 pandemic has caused disruptions to our operations starting in December 2019. During the first quarter of 2020, our operations
were closed in February due to China government mandates and we moved quickly to transition our colleague base to a fully remote working
environment in all our locations. At the beginning of March 2020, substantially all of our employee were back to work in our offices.
The ongoing COVID-19 pandemic not only adversely impacted our operations but business of our customers. We experienced delayed customer
payments and rescheduled customer orders, which adversely impacts the Company's results of operations, cash flows and financial
position.  During 2022, our business continued to be adversely impacted by the COVID-19 pandemic. Specifically, a new COVID-19 subvariant
(Omicron) outbreak hit China in March 2022, spreading more quickly and easily than previous strains. As a result, a new round of lockdowns,
quarantines, or travel restrictions has been imposed upon different provinces or cities in China by the relevant local government authorities.
The
extent of the impact on our 2023 fiscal year results will be dependent on future developments such as new information on the effectiveness
of the mitigation strategies, the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the related travel
advisories and restrictions, the overall impact of the COVID-19 pandemic on the global economy and capital markets, and the efficacy
of COVID-19 vaccines, which may also take extended time to be widely and adequately distributed, all of which remain highly uncertain
and unpredictable. Given this uncertainty, we are currently unable to quantify the expected impact of the COVID-19 pandemic on our future
operations, financial condition, liquidity, and results of operations if the current situation continues.
Recent
Developments
On
January 5, 2023, the Company entered into an equity transfer agreement (the "Second SmartConn Acquisition") with a shareholder
of SmartConn pursuant to which the Company agrees to purchase 31% equity of SmartConn at 90% of the appraisal price. The consideration
of the Second SmartConn Acquisition will be paid in the form of 114,899,222 newly issued shares of the Company. The Company will hold
an aggregate of 50.99% equity interest of the SmartConn following the closing of the Second SmartConn Acquisition and the First SmartConn
Acquisition of 19.99% equity interest of the SmartConn in January 2022. Reference is made to the Form 6-K filed with the SEC on January
18, 2023.
SmartConn
wholly controls Shanghai Stamp Technology Co., Ltd. ("Stamp Technology"). Stamp Technology mainly engaged in distributed
database blockchain, cryptocurrency DAPP development and web 3.0 application in the industry. By acquiring SmartConn, Powerbridge intend
to incorporate its blockchain technology and web 3.0 know how application to further elevate Powerbridge's product development
ability.
70
On
March 19, 2023, the Company entered into an equity transfer agreement with a entered into an equity transfer agreement with DTI Group
Limited ("DTI"), pursuant to which the Company agreed to purchase 32% of the equity interest of DTI for a consideration of
RMB 96,732,800, which shall be satisfied by way of allotment and issue of 167,592,318 shares of the Company to DTI. The Company already
held 19% equity interest in DTI prior to the acquisition. Hence, after the acquisition, the Company holds in total 51% equity interest
in DTI. The acquisition was closed on March 24, 2023. DTI's expertise in digital trade infrastructure contributes to the establishment
of a digital trade ecosystem for the Company, thereby expanding the Company's operations. Given DTI's strong performance
and a series of recently signed digital solutions contracts valued at approximately $10 million, it is expected that this acquisition
provides significant values and benefits to the Company.
On
March 28, 2023, the Company entered into an equity transfer agreement with fifteen individual shareholders (the "Relevant Shareholders")
of BOXINRUI INTERNATIONAL HOLDINGS LIMITED ("Boxinrui"), pursuant to which the Company agreed to further acquire 65% equity
interest in Boxinrui for a consideration of approximately US$25.8 million, which shall be satisfied by way of allotment and issue of
an aggregate of 276,448,625 shares to the Relevant Shareholders (the "Third Acquisition"). The Company will hold an aggregate
of 100% equity interest of the Boxinrui following the closing of the acquisition.
On
March 24, 2023, Powerbridge Zhuhai entered into a customized servers purchase agreement with Sichuan Haojing Technology Co., Ltd., pursuant
to which the Company agreed to purchase 1,200servers (the "Servers") used for cryptocurrency mining, for a consideration
of RMB 3.744 million.
Key
Factors that Affect Operating Results
We
currently derive a majority of revenues from our application development services, consulting and technical support services, and subscription
services. We intend to continually enhance our services and cross-sell new services to our existing customers and acquire new customers
by increasing our market penetration with a deeper market coverage and a broader geographical reach. Our ability to maintain and expand
our customer base with our application development services significantly affects our operating results. We intend to expand the
scope of our offerings to service existing customers and acquire new customers by continually making significant investments in R&D
as well as sales marketing activities to increase our subscription revenue and profit. Our ability to drive increased customer adoption
and usage of our SaaS services affects our operating results.
Our
business of providing global trade software application and technology services requires highly skilled professionals with specialized
domain knowledge and technology expertise in order to develop and perform the services offered to our customers. Our ability to recruit,
train, develop and retain our professionals with the skills and qualifications necessary to fulfill the needs of our existing and new
customers has a significant effect on our operating results.
We
intend to pursue strategic acquisitions and investments in selective technologies and businesses that will enhance our technology capabilities,
expand our offerings and increase our market penetration. We believe our strategic acquisition and investment strategy is critical for
us to accelerate our growth and strengthen our competitive position. Our ability to identify and execute strategic acquisitions and investments
will have an effect on our operating results.
71
A.
Operating Results
For
the years ended December 31, 2022 and 2021
The
following table summarizes the results of our operations for the years ended December 31, 2022 and 2021, respectively, and provides information
regarding the dollar and percentage increase or (decrease) during such periods.
For the Years Ended
December 31,
2022
2021
Change
% Change
REVENUES:
Application development services
$
3,847,199
$
20,323,422
$
(16,476,223
)
(81.1
)%
Consulting and technical support services
2,538,500
4,555,352
(2,016,852
)
(44.3
)%
Subscription services
758,526
936,913
(178,387
)
(19.0
)%
Trading revenue
3,338,584
6,277,141
(2,938,557
)
(46.8
)%
Total revenues
10,482,809
32,092,828
(21,610,019
)
(67.3
)%
COST OF REVENUES:
Application development services
2,443,460
12,785,491
(10,342,031
)
(80.9
)%
Consulting and technical support services
983,700
2,198,310
(1,214,610
)
(55.3
)%
Subscription services
104,499
156,113
(51,614
)
(33.1
)%
Trading
3,183,729
6,237,601
(3,053,872
)
(49.0
)%
Total cost of revenues
6,715,388
21,377,515
(14,662,127
)
(68.6
)%
GROSS PROFIT
3,767,421
10,715,313
(6,947,892
)
(64.8
)%
OPERATING EXPENSES:
Selling and marketing
1,956,811
2,775,526
(818,715
)
(29.5
)%
General and administrative
7,732,287
6,004,186
1,728,101
28.8
%
Provision for doubtful accounts
4,733,183
1,100,606
3,632,577
330.1
%
Research and development
3,459,987
2,611,742
848,245
32.5
%
Share-based compensation
5,983,907
6,335,246
(351,339
)
(5.5
)%
Total operating expenses
23,866,175
18,827,306
5,038,869
26.8
%
OPERATING LOSS FROM OPERATIONS
(20,098,754
)
(8,111,993
)
(11,986,761
)
147.8
%
OTHER INCOME (EXPENSES)
Other income (expenses)
608
(36,881
)
37,489
101.6
%
(Loss) gain from disposition of a subsidiary
(1,009
)
714
(1,723
)
(241.3
)%
Change in fair value of convertible debt
(2,448,936
)
(1,508,229
)
(940,707
)
62.4
%
Total other expenses
(2,449,337
)
(1,544,396
)
(904,941
)
58.6
%
LOSS BEFORE INCOME TAXES
(22,548,091
)
(9,656,389
)
(12,891,702
)
133.5
%
INCOME TAX BENEFIT
(999,391
)
(173,941
)
(825,450
)
474.6
%
NET LOSS
$
(21,548,700
)
$
(9,482,448
)
$
(12,066,252
)
127.2
%
Revenues
We
derive revenues from four sources: (1) revenue from application development services, (2) revenue from consulting and technical support
services, (3) revenue from subscription services, and (4) trading revenue.
For
the years ended December 31, 2022, our total revenue was approximately $10.5 million as compared to $32.1 million for the year ended
December 31, 2021. The Company's total revenue decreased by approximately $21.6 million, or 67.3%. The overall decrease in total
revenue was primarily attributable to approximately $16.5 million decrease in revenue from application development services.
Revenue
from application development services
The
Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform
services including project planning, project design, application development and system integration based on customers' specific
needs. These services also require significant production and customization. Revenue from application development service is recognized
as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.
72
For
the year ended December 31, 2022, our application development service revenue was approximately $3.8 million as compared to approximately
$20.3 million for the year ended December 31, 2021. The decrease in application development service revenue was approximately $16.5 million
or 81.1% due to less new projects in current period. In certain application development service arrangements, the contacts included sales
of IT equipment. Such revenue was $2,609,531 for the year ended December 31, 2022, decreased from $14,472,010 of the related revenue
for the year ended December 31, 2021.
Revenue
from consulting and Technical Support Services
Revenue
from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional
consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date
its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract
term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance
obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis
as customers receive and consume benefits of such services.
For
the year ended December 31, 2022, our consulting and technical support service revenue was approximately $2.5 million as compared to
approximately $4.6 million for the year ended December 31, 2021, representing a decrease of $2.0 million or 44.3%, which was due to less
new projects in current period.
Revenue
from subscription services
Revenue
from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications.
The Company's monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers.
The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized
over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.
For
the year ended December 31, 2022, our subscription service revenue was approximately $0.8 million as compared to approximately $0.9 million
for the year ended December 31, 2021. We introduced our SaaS subscription services in fiscal 2016 and continue to expand the scope of
our services and enhance the features and functionalities of our applications and improve our marketing efforts, we expect our subscription
service revenue will grow with an expanded offering and increased market awareness.
Trading
revenue
The
Company starts to sell consumables to its customers for the year ended December 31, 2021. Revenue from trading revenue was approximately
$3.3 million and $6.3 million for the year ended December 31, 2022 and 2021, respectively.
Cost
of Revenues
Our
cost of revenues mainly consists of compensation benefit expenses for our professionals, material cost, travel expenses related to revenue
contracts and purchase cost of consumables products.
Our
cost of revenues decreased by approximately $14.7 million or 68.6% to approximately $6.7 million for the year ended December 31, 2022
from approximately $21.4 million for the year ended December 31, 2021, which was in line with decreased revenue, mainly attributable
to a decrease of $10.4 million in cost of revenue from application development services and a decrease of approximately $3.1 million
in cost of revenue from trading business. Our cost of revenue from application development services, consulting and technical support
services, and trading was approximately $2.4 million, $1.0 million, $0.1 million and $3.2 million for the year ended December 31, 2022,
respectively, as compared to approximately $12.8 million, $2.2 million, $0.2 million and $6.2 million for the year ended December 31,
2021.respectively.
Gross
profit
For the Years Ended
December 31,
2022
2021
GROSS PROFIT
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Application development services
$
1,403,739
36.5
%
$
7,537,931
37.1
%
Consulting and technical support services
1,554,800
61.2
%
2,357,042
51.7
%
Subscription services
654,027
86.2
%
780,800
83.3
%
Trading revenue
154,855
4.6
%
39,540
0.6
%
Total gross profit
$
3,767,421
35.9
%
$
10,715,313
33.4
%
73
Our
gross profit decreased by approximately $6.9 million or 64.8% from approximately $10.7 million for the year ended December 31, 2021 to
approximately $3.8 million for the year ended December 31,2022. Gross margin as a percent of overall revenue for the years ended December
31, 2022 and 2021 was 35.9% and 33.4%, respectively.
Gross
profit for application development services decreased by approximately $6.1 million or 81.4% from $7.5 million for the year ended December
31, 2021 to approximately $1.4 million for the year ended December 31, 2022 mainly due to less new projects for the year ended December
31, 2022. Gross profit margin was steady. Gross profit margin for the years ended December 31, 2022 and 2021 was 36.5% and 37.1%, respectively.
Gross
profit for consulting and technical support services decreased by approximately $0.8 million or 34.0% from approximately $2.4 million
for the year ended December 31, 2021 to approximately $1.6 million for the year ended December 31, 2022. Gross profit margin for the
years ended December 31, 2022 and 2021 was 61.2% and 51.7%, respectively. The increase in gross profit margin was mainly due to our reducing
staff and incorporating workforce optimization practices during the COVID-19 pandemic outbreak and spreading.
Gross
profit for subscription services decreased by $0.1 million or 16.2% from $0.8 million for the year ended December 31, 2021 to $0.7 million
for the year ended December 31, 2022. Gross profit margin was 86.2% and 83.3% for the years ended December 31, 2022 and 2021 respectively.
The increase in gross profit margin was mainly due to our reducing staff and incorporating workforce optimization practices during the
COVID-19 pandemic outbreak and spreading.
Gross
profit for trading revenue was $154,855 and $39,540 for the years ended December 31, 2022 and 2021, respectively; gross profit margin
was 4.6% and 0.6% for the years ended December 31, 2022 and 2021, respectively.
Operating
Expenses
For the Years Ended
December 31,
2022
2021
Change
% Change
OPERATING EXPENSES:
Selling and marketing
$
1,956,811
$
2,775,526
$
(818,715
)
(29.5
)%
General and administrative
7,732,287
6,004,186
1,728,101
28.8
%
Provision for doubtful accounts
4,733,183
1,100,606
3,632,577
330.1
%
Research and development
3,459,987
2,611,742
848,245
32.5
%
Share based compensation
5,983,907
6,335,246
(351,339
)
(5.5
)%
Total operating expenses
$
23,866,175
$
18,827,306
$
5,038,869
26.8
%
Our
operating expenses consist of selling and marketing, general and administrative, research and development ("R&D") expenses,
provision for doubtful accounts and stock-based compensation. Operating expenses increased by approximately $5.0 million, or 26.8%, from
approximately $18.8 million for the year ended December 31, 2021 to approximately $23.9 million for the year ended December 31, 2022.
The increase in our operating expenses was primarily due to approximately $3.6 million increase in provision for doubtful accounts and
approximately $1.7 million increase in share-based compensation.
Selling
and marketing expenses primarily consisted of salary and compensation expenses relating to our sales and marketing personnel, and also
included entertainment, travel and transportation, and other expenses relating to our sales and marketing activities. Selling and marketing
expenses decreased by approximately $0.8 million or 29.5% from $2.8 million for the year ended December 31, 2021 to approximately $2.0
million for the year ended December 31, 2022. The decrease was primarily attributable to less marketing consulting fees and marketing
and promotional activities for the year ended December 31, 2022.
74
General
and administrative expenses primarily consisted of salary and compensation expenses relating to our accounting, human resources and executive
office personnel, and included rental expenses, depreciation and amortization expenses, office overhead, professional service fees and
travel and transportation costs. General and administrative expenses increased by $1.7 million or 28.8% from approximately $6.0 million
for the year ended December 31, 2021 to approximately $7.7 million for the year ended December 31, 2022, due to higher management bonus.
As a percentage of revenues, general and administrative expenses were 73.8% and 18.7% of our total revenue for the years ended December
31, 2022 and 2021, respectively.
Provision
for doubtful accounts increased by approximately $3.6 million from approximately $1.1 million for the year ended December 31, 2021 to
approximately $4.7 million for the year ended December 31, 2022 due to slow collection impacted by COVID-19.
R&D
expenses primarily consisted of compensation and benefit expenses relating to our R&D personnel as well as office overhead and other
expenses relating to our R&D activities. Our R&D expenses increased by approximately $0.8 million from approximately $2.6 million
for the year ended December 31, 2021 to approximately $3.5 million for the year ended December 31, 2022, representing 33.0% and 8.1%
of our total revenues for the years ended December 31, 2022 and 2021, respectively. We expect to continue to invest in R&D. We expect
that our ability to effectively utilize our R&D capabilities significantly affect our results of operations in the future.
Stock-based
compensation decreased by approximately $0.4 million from approximately $6.3 million for the year ended December 31, 2021 to approximately
$6.0 million for the year ended December 31, 2022.
Other
Income (Expense)
Other
income (expense) primarily consists of government subsidy income, interest income net of interest expense and other expenses. Our net
other expense was approximately $2.4 million for the year ended December 31, 2022, compared with approximately $1.5 million for the year
ended December 31, 2021. The increase in net other expense is substantially attributable to a decrease of approximately $0.9 million
loss from change in the fair value of the convertible loan. The Company elected the fair value option to account for its convertible
loans. The Group engaged an independent valuation firm to assess the fair value of the convertible loan using the binomial tree model.
The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported
by little or no market activity and reflect the Company's own assumptions in measuring fair value. Significant estimates used in
developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability
to convert and expected timing of conversion.
The
following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) as of December 31, 2022 and 2021:
December 31,
December 31,
2022
2021
Opening balance
$
2,251,832
$
-
Issuance of convertible loans
7,979,983
6,860,000
Loss on change in fair value of convertible loan
2,448,936
1,508,229
Accrued interest
195,139
226,775
Conversion of convertible loan
(3,795,924
)
(6,343,172
)
Total
$
9,079,966
$
2,251,832
Income
Tax Benefit
Income
tax benefit was approximately $1.0 million for the year ended December 31, 2022, compared to approximately $0.2 million for the year
ended December 31, 2021. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However,
our major operating subsidiary - Powerbridge Zhuhai was recognized as the "high-tech enterprise" status, which reduced its
statutory income tax rate to 15%. The rest of our subsidiaries in PRC are subject to income tax rate of 25%. As of December 31, 2022
and 2021, the Company had accrued (before adjustment) total income tax liabilities of $550,602 and $594,026, respectively. According
to PRC taxation regulation and administrative practice and procedures, the statute of limitation on tax authority's audit or examination
of previously filed tax returns expires three years from the date they were filed. The Company also obtained a written statement from
the local tax authority that no additional taxes are due as of December 31, 2022. Based on these facts, the Company reversed the accrued
tax liabilities in the total amount of $550,602 (or RMB3,798,484) relating to the tax liabilities accrued for the period from fiscal
2016 to fiscal 2018, resulting in the decrease of accrued income tax liabilities from $550,602 to $nil as of December 31, 2022.
75
Net
Loss
As
a result of the foregoing, our net loss increased by $12.1 million, or 127.2%, from $9.5 million for the year ended December 31, 2021
to $21.5 million for the year ended December 31, 2022. The increased net loss was the result of decreased gross profit and increased
operation expenses as discussed above.
Other
comprehensive (loss) income
Foreign
currency translation loss was approximately $6.0 million, compared to an income of approximately $1.9 million for the years ended December
31, 2022 and 2021, respectively. The balance sheet amounts with the exception of equity as of December 31, 2022 were translated at RMB6.8972
to USD1.00 as compared to RMB6.3726 to USD1.00 as of December 31, 2021. The equity accounts were stated at their historical rate. The
average translation rates applied to the income statements accounts for the years ended December 31, 2022 and 2021 were RMB6.7290 to
USD1.00 and RMB6.4508 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial
results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.
For
the years ended December 31, 2021 and 2020
The
following table summarizes the results of our operations for the years ended December 31, 2021 and 2020, respectively, and provides information
regarding the dollar and percentage increase or (decrease) during such periods.
For the Years Ended
December 31,
2021
2020
Change
% Change
REVENUES:
Application development services
$
20,323,422
$
21,985,214
$
(1,661,792
)
(7.6
)%
Consulting and technical support services
4,555,352
3,797,354
757,998
20.0
%
Subscription services
936,913
881,443
55,470
6.3
%
Trading revenue
6,277,141
-
6,277,141
-
%
Total revenues
32,092,828
26,664,011
5,428,817
20.4
%
COST OF REVENUES:
Application development services
12,785,491
15,320,446
(2,534,955
)
(16.5
)%
Consulting and technical support services
2,198,310
1,803,239
395,071
21.9
%
Subscription services
156,113
147,631
8,482
5.7
%
Trading
6,237,601
-
6,237,601
-
%
Total cost of revenues
21,377,515
17,271,316
4,106,199
23.8
%
GROSS PROFIT
10,715,313
9,392,695
1,322,618
14.1
%
OPERATING EXPENSES:
Selling and marketing
2,775,526
2,675,028
100,498
3.8
%
General and administrative
6,004,186
5,559,426
444,760
8.0
%
Provision for doubtful accounts
1,100,606
191,148
909,458
475.8
%
Research and development
2,611,742
2,780,944
(169,202
)
(6.1
)%
Share-based compensation
6,335,246
1,473,976
4,861,270
329.8
%
Total operating expenses
18,827,306
12,680,522
6,146,784
48.5
%
OPERATING LOSS FROM OPERATIONS
(8,111,993
)
(3,287,827
)
(4,824,166
)
146.7
%
OTHER INCOME (EXPENSES)
Other income
(36,881
)
106,026
(142,907
)
(134.8
)%
Gain from disposition of a subsidiary
714
-
714
-
Change in fair value of convertible debt
(1,508,229
)
(15,258,333
)
13,750,104
(90.1
)%
Total other expense
(1,544,396
)
(15,152,307
)
13,607,911
(89.8
)%
LOSS BEFORE INCOME TAXES
(9,656,389
)
(18,440,134
)
8,783,745
(47.6
)%
INCOME TAX BENEFIT
(173,941
)
(80,532
)
(93,409
)
116.0
%
NET LOSS
$
(9,482,448
)
$
(18,359,602
)
$
8,877,154
(48.4
)%
Revenues
We
derive revenues from four sources: (1) revenue from application development services, (2) revenue from consulting and technical support
services, (3) revenue from subscription services, and (4) trading revenue.
76
The
Company is focusing on developing global trade applications and solutions equipped with the Company's new technology in SaaS platform,
Big Data, AI and IoT applications and BaaS platform. The Company believes new technology development is the key driver for the Company's
future growth. In fiscal 2021, our revenue related to deploying our new technology including SaaS and big data analysis services accounted
for 5.7% of our total revenue (or approximately $1.8 million) compared to 5.8% of our total revenue (or approximately $1.5 million) in
fiscal 2020.
For
the year ended December 31, 2021, our total revenue was approximately $32.1 million as compared to $26.7 million for the year ended December
31, 2020. The Company's total revenue increased by approximately $5.4 million, or 20.4%. The overall increase in total revenue
was primarily attributable to approximately $6.3 million increase in revenue from trading.
Revenue
from application development services
The
Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform
services including project planning, project design, application development and system integration based on customers' specific
needs. These services also require significant production and customization. Revenue from application development service is recognized
as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.
For
the year ended December 31, 2021, our application development service revenue was approximately $20.3 million as compared to approximately
$22.0 million for the year ended December 31, 2020. The decrease in application development service revenue was approximately $1.7 million
or 7.6% due to due to less new projects in current period. In certain application development service arrangements, the contacts included
sales of IT equipment. Such revenue was $14,472,010 in fiscal 2021, significantly increased from $6,299,982 of the related revenue in
fiscal 2020. On the other side, 2.9% (or approximately $0.6 million) of revenue from application development service were related to
SaaS platform development and big data analysis applications in fiscal 2021, comparing to 1.2% (or approximately $0.3 million) of the
related revenue in fiscal 2020. We intend to continue investing for long-term growth in the SaaS development and big data analysis market
and we plan to continue to expand our ability to sell our applications by investing in product development and customer support to address
the business needs of local markets and continuous growth for these services.
Revenue
from consulting and Technical Support Services
Revenue
from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional
consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date
its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract
term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance
obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis
as customers receive and consume benefits of such services.
For
the year ended December 31, 2021, our consulting and technical support service revenue was approximately $4.6 million as compared to
approximately $3.8 million for the year ended December 31, 2020, representing an increase of $0.8 million or 20.0%, which was due to
revenue brought by four new projects.
Revenue
from subscription services
Revenue
from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications.
The Company's monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers.
The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized
over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.
For
the year ended December 31, 2021 and 2020, our subscription service revenue stayed at approximately $0.9 million. We introduced our SaaS
subscription services in fiscal 2016 and continue to expand the scope of our services and enhance the features and functionalities of
our applications and improve our marketing efforts, we expect our subscription service revenue will grow with an expanded offering and
increased market awareness.
77
Trading
revenue
The
Company starts to sell consumables to its customers in fiscal 2021. Revenue from trading revenue was approximately $6.3 million.
Cost
of Revenues
Our
cost of revenues mainly consists of compensation benefit expenses for our professionals, material cost, travel expenses related to revenue
contracts and purchase cost of consumables products.
Our
cost of revenues increased by approximately $4.1 million or 23.8% to approximately $21.4 million in fiscal 2021 from approximately $17.3
million in fiscal 2020, which was mainly attributable to an increase of $6.2 million in cost of trading business, offset by a decrease
of approximately 2.5 million in cost of revenue from application development services. Our cost of revenue from consulting and technical
support services was approximately $2.2 million in fiscal 2021, representing an increase of $0.4 million from $1.8 million in fiscal
2020. Our increase in cost of revenue from consulting and technical support services was in line with increase in consulting and technical
support services revenue. Our cost of revenue from subscription services were approximately $0.2 million and approximately $0.1 million
in fiscal 2021 and 2020, respectively. We have established a stable SaaS development and service team and expect to expand the scope
of our services and enhance the features and functionalities of our applications and improve our marketing efforts.
Gross
profit
For the Years Ended
December 31,
2021
2020
GROSS PROFIT
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Application development services
$
7,537,931
37.1
%
$
6,664,768
30.3
%
Consulting and technical support services
2,357,042
51.7
%
1,994,115
52.5
%
Subscription services
780,800
83.3
%
733,812
83.3
%
Trading revenue
39,540
0.6
%
-
-
%
Total gross profit
$
10,715,313
33.4
%
$
9,392,695
35.2
%
Our
gross profit increased by approximately $1.3 million or 14.1% from approximately $9.4 million in fiscal 2020 to approximately $10.7 million
in fiscal 2021. Gross margin as a percent of overall revenue for fiscal 2021 and 2020 was 33.4% and 35.2%, respectively.
Gross
profit for application development services increased by approximately $0.9 million or 13.1% from $6.7 million in 2020 to approximately
$7.5 million in fiscal 2021 mainly due to we completed several software contracts which required fewer developing hours in fiscal 2021.
Gross profit margin for fiscal 2021 and 2020 was 37.1% and 30.3%, respectively. The increase in gross margin was primarily due to less
developing costs.
Gross
profit for consulting and technical support services increased by approximately $0.4 million or 18.2% from approximately $2.0 million
in 2020 to approximately $2.4 in fiscal 2021 mainly in line with increased of revenue from consulting and technical support service,
offset by cost resulted from the outsourcing of maintenance service for the purpose of fulfilling scheduled maintenance and operating
plan when we reducing staff and incorporating workforce optimization practices during the COVID-19 pandemic outbreak and spreading. Gross
profit margin for fiscal 2021 and 2020 was 51.7% and 52.5%, respectively.
Gross
profit for subscription services increased by $0.05 million or 6.4% from $0.73 million in 2020 to $0.78 million in fiscal 2021, which
was in line with the increase of revenue from subscription services. Gross profit margin was 83.3% in both fiscal 2021 and 2020.
Gross
profit for trading revenue was $39,540 and gross profit margin was 0.6% for fiscal 2021.
78
Operating
Expenses
For the Years Ended
December 31,
2021
2020
Change
% Change
OPERATING EXPENSES:
Selling and marketing
$
2,775,526
$
2,675,028
$
100,498
3.8
%
General and administrative
6,004,186
5,559,426
444,760
8.0
%
Provision for doubtful accounts
1,100,606
191,148
909,458
475.8
%
Research and development
2,611,742
2,780,944
(169,202
)
(6.1
)%
Share based compensation
6,335,246
1,473,976
4,861,270
329.8
%
Total operating expenses
$
18,827,306
$
12,680,522
$
6,146,784
48.5
%
Our
operating expenses consist of selling and marketing, general and administrative, research and development ("R&D") expenses,
provision for doubtful accounts and stock-based compensation. Operating expenses increased by approximately $6.1 million, or 48.5%, from
approximately $12.7 million for the year ended December 31, 2020 to approximately $18.8 million for the year ended December 31, 2021.
The increase in our operating expenses was primarily due to approximately $4.9 million increase in share-based compensation and approximately
$0.9 million increase provision for doubtful accounts.
Selling
and marketing expenses primarily consisted of salary and compensation expenses relating to our sales and marketing personnel, and also
included entertainment, travel and transportation, and other expenses relating to our sales and marketing activities. Selling and marketing
expenses increased by approximately $0.1 million or 3.8% from $2.7 million in fiscal 2020 to approximately $2.8 million in fiscal 2021.
The increase was primarily attributable to more marketing consulting fees and marketing and promotional activities in fiscal 2021.
General
and administrative expenses primarily consisted of salary and compensation expenses relating to our accounting, human resources and executive
office personnel, and included rental expenses, depreciation and amortization expenses, office overhead, professional service fees and
travel and transportation costs. General and administrative expenses increased by $0.4 million or 8.0% from approximately $5.6 million
in fiscal 2020 to approximately $6.0 million in fiscal 2021, due to more professional and consulting fees incurred relating to capital
market development. As a percentage of revenues, general and administrative expenses were 18.7% and 20.8% of our total revenue in fiscal
2021 and 2020 respectively.
Provision
for doubtful accounts increased by approximately $0.9 million from approximately $0.2 million in fiscal 2020 to approximately $1.1 million
in fiscal 2021 due to slowly collection.
R&D
expenses primarily consisted of compensation and benefit expenses relating to our R&D personnel as well as office overhead and other
expenses relating to our R&D activities. Our R&D expenses decreased by approximately $0.2 million from approximately $2.8 million
in fiscal 2020 to approximately $2.6 million in fiscal 2021, representing 8.1% and 10.4% of our total revenues for fiscal 2021 and 2020,
respectively. We expect to continue to invest in R&D. We expect that our ability to effectively utilize our R&D capabilities
significantly affect our results of operations in the future.
Stock-based
compensation increased by approximately $4.9 million from approximately $1.5 million in fiscal 2020 to approximately $6.3 million in
fiscal 2021.
Other
Income (Expense)
Other
income (expense) primarily consists of government subsidy income, interest income net of interest expense and other expenses. Our net
other expense was approximately $1.5 million in fiscal 2021, compared with approximately $15.2 million in fiscal 2020. The decrease in
net other expense is substantially attributable to a decrease of approximately $13.8 million loss from change in the fair value of the
convertible loan. The Company elected the fair value option to account for its convertible loans. The Group engaged an independent valuation
firm to assess the fair value of the convertible loan using the binomial tree model. The convertible loans are classified as level 3
instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect
the Company's own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible
loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion.
The
following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) as of December 31, 2021 and 2020:
December 31,
December 31,
2021
2020
Opening balance
$
-
$
-
Issuance of convertible loans
6,860,000
50,000,000
Loss on change in fair value of convertible loan
1,508,229
15,258,333
Accrued interest
226,775
-
Conversion of convertible loan
(6,343,172
)
(65,258,333
)
Total
$
2,251,832
$
-
79
Income
Tax Benefit
Income
tax benefit was approximately $0.2 million in fiscal 2021, compared to approximately $0.08 million in fiscal 2020. Under the Income Tax
Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, our major operating subsidiary - Powerbridge
Zhuhai was recognized as the "high-tech enterprise" status, which reduced its statutory income tax rate to 15%. The rest
of our subsidiaries in PRC are subject to income tax rate of 25%.
Net
Loss
As
a result of the foregoing, our net loss decreased by $8.9 million, or 48.4%, from $18.4 million in fiscal 2020 to $9.5 million in fiscal
2021. The decreased net loss was the result of decreased change of fair value of the convertible loan and increased gross profit, offset
by increased operation expenses as discussed above.
Other
comprehensive income (loss)
Foreign
currency translation adjustments amounted to an income of approximately $1.9 million and approximately $0.8 million for the years ended
December 31, 2021 and 2020, respectively. The balance sheet amounts with the exception of equity as of December 31, 2021 were translated
at RMB6.3726 to USD1.00 as compared to RMB6.5250 to USD1.00 as of December 31, 2020. The equity accounts were stated at their historical
rate. The average translation rates applied to the income statements accounts for the years ended December 31, 2021 and 2020 were RMB6.4508
to USD1.00 and RMB6.9042 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial
results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.
Recently
issued accounting pronouncements
A
list of recent relevant accounting pronouncements is included in Note 2 "Summary of Principal Accounting Policies" of our
Consolidated Financial Statements.
B.
Liquidity and Capital Resources
Substantially
all of our operations are conducted in China and all of our revenue, expenses, and cash are denominated in RMB. RMB is subject to the
exchange control regulation in China, and, as a result, we may have difficulty distributing any dividends outside of China due to PRC
exchange control regulations that restrict our ability to convert RMB into U.S. dollars. As of December 31, 2022, cash of approximately
$9.4 million were fully held by the Company and its subsidiary in mainland PRC.
The
Cayman holding company is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiary
in China. As a result, the Company's ability to pay dividends depends upon dividends paid by our subsidiary. Our subsidiaries in China
are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards
and regulations. Under PRC law, our subsidiary is required to set aside at least 10% of its after-tax profits each year based on PRC
accounting standards, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. The
statutory reserve funds are not distributable as cash dividends. Remittance of dividends by our subsidiary out of China is subject to
examination by the banks designated by SAFE. Our subsidiary has not paid dividends and will not be able to pay dividends until it generates
accumulated profits and meet the requirements for statutory reserve funds. In addition, we would need to accrue and pay withholding taxes
if we were to distribute funds from our subsidiary in China to us. We do not intend to repatriate such funds in the foreseeable future,
as we plan to use existing cash balance in PRC for general corporate purposes.
For
the year ended December 31, 2022, the Company had working capital of approximately $59.5 million and incurred a net loss of approximately
$21.5 million. For fiscal 2022, the Company had negative operation cash flow of approximately $9.7 million. The Company has historically
funded its working capital needs primarily from public offering, operations, bank loans, advance payments from customers and shareholders.
The working capital requirements are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts,
the progress or execution on customer contracts, and the timing of accounts receivable collections.
In
assessing its liquidity, the Company monitors and analyzes its cash on hand, its ability to generate sufficient revenue sources in the
future and its operating and capital expenditure commitments. As of December 31, 2022, the Company had cash of approximately $9.4 million.
On
September 1, 2022, the Company entered into a securities purchase agreement with White Lion Capital LLC ("White Lion"). Pursuant
to the agreement, White Lion shall purchase up to $15 million of the Company's ordinary shares at the lowest daily VWAP of the
Ordinary Shares during the Valuation Period by 97%. As of December 31, 2022, the Company issued 22,875,000 ordinary shares and net proceeds
was $3,519,202. In 2023, the Company issued 5,000,000 ordinary shares and net proceeds was $491,180.
On
September 9, 2022, the Company entered into a securities purchase agreement with Yorkville Advisors lobal, LP ("Yorkville").
Pursuant to the agreement, Yorkville shall purchase up to $30 million of the Company's ordinary shares at the market price by 96%,
and the company shall issue to Yorkville 223,880 ordinary shares as a commitment fee. As of December 31, 2022, the Company issued 17,035,074
ordinary shares and net proceeds was $3,511,317. The Company issued 223,880 ordinary shares for commitment fee on January 1, 2023. In
2023, the Company issued 26,235,245 ordinary shares and net proceeds was $2,758,873.
80
On
December 29, 2022, the Company entered into a securities purchase agreement with TBS Capital LP, ("TBS"). Pursuant to the
agreement, TBS shall purchase up to $15 million of the Company's ordinary shares at the market price by 96%, and the company shall
issue to Yorkville 223,880 ordinary shares as a commitment fee. The Company issued 223,880 ordinary shares for commitment fee on December
15, 2022. In 2023, the Company issued 6,250,000 ordinary shares and net proceeds was $530,000.
The
Company believes that its cash on hand and financing cash flows will be sufficient to fund its operations over at least the next 12 months
from the date of this report. However, the Company may need additional cash resources in the future if the Company experiences changed
business conditions or other developments, and may also need additional cash resources in the future if the Company wishes to pursue
opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements
exceed the Company's amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.
The
following summarizes the key components of our cash flows for the years ended December 31, 2022, 2021 and 2020.
For the
    Years Ended
December
    31,
2022
2021
2020
Net cash (used in) provided by operating
    activities
$
(9,656,725)
$
(9,761,386)
$
1,051,741
Net cash used in investing activities
(234,262)
(3,239,410
)
(65,904,533
)
Net cash provided by financing activities
12,403,433
11,462,271
70,043,789
Effect of exchange rate change on cash and restricted
    cash
(188,372)
205,069
(2,745,717
)
Net increase (decrease) in cash and restricted cash
$
2,324,074
$
(1,333,456
)
$
2,445,280
Operating
Activities
Net
cash used in operating activities was approximately $9.7 million for the year ended December 31, 2022, as compared to approximately $9.8
million net cash provided by operating activities for the year ended December 31, 2021. Cash used in operating activities for the year
ended December 31, 2022 mainly consisted of approximately $21.5 million of net loss, adjustment of $15.2 million non-cash items, a decrease
of approximately $6.8 million in account payable (including related parties) due to less purchase, offset by an increase of approximately
$3.0 million in account receivable due to slowly collection.
Net
cash used in operating activities was approximately $9.8 million for the year ended December 31, 2021, as compared to approximately $1.1
million net cash provided by operating activities for fiscal 2020. Cash used in operating activities for the year ended December 31,
2021 mainly consisted of approximately $9.5 million of net loss, adjustment of $11.0 million non-cash items, an increase of approximately
$10.5 million in account receivable due to slowly collection, a decrease of approximately$3.7 million in accounts payable due to more
purchase in 2021, offset by a decrease of approximately $4.1 million in contract costs incurred for fulfillment of contracts.
Net
cash provided by operating activities was approximately $1.1 million for the year ended December 31, 2020, as compared to approximately
$3.3 million net cash used in operating activities for fiscal 2019. Cash provided by operating activities for the year ended December
31, 2020 mainly consisted of approximately $18.4 million of net loss, adjustment of $18.3 million non-cash items, an increase of approximately
$3.0 million in accounts payable due to more purchase in 2020, offset by an increase of approximately $2.0 million in accounts receivable,
an increase of $1.2 million prepayment, deposits and other assets due to increasing purchase from our venders, and an increase of approximately
$0.8 million in contract costs incurred for the customer contracts
Investing
Activities
Net
cash used in investing activities was approximately $0.2 million for the year ended December 31, 2022, as compared to approximately $3.2
million for the year ended December 31, 2021. Cash used in investing activities for the year ended December 31, 2022 was mainly due to
$3.9 million spending on purchases of property and equipment and approximately $0.4 million paid to long term investments, offset by
approximately $4.0 million collected from working capital support provided to Kezhi Technology Co., Ltd.("Kezhi").
Net
cash used in investing activities was approximately $3.2 million for fiscal 2021, as compared to approximately $65.9 million for fiscal
2020. Cash used in investing activities for fiscal 2021 was mainly due to $4.9 million spending on purchases of property and equipment,
offset by approximately $1.7 million collected from working capital support provided to Kezhi Technology Co., Ltd. ("Kezhi").
Net
cash used in investing activities was approximately $65.9 million for fiscal 2020, as compared to approximately $3.6 million for fiscal
2019. Cash used in investing activities for fiscal 2020 was mainly due to $1.6 million spending on purchases of property and equipment
and $64.3 million increase in working capital support provided to Kezhi Technology Co., Ltd.("Kezhi") which will be repaid
in two years and the repayment of the loan is guaranteed by a third party.
81
Financing
Activities
Net
cash provided by financing activities was approximately $12.4 million for the year ended December 31, 2022, as compared to approximately
$11.5 million for the year ended December 31, 2021. Net cash provided by financing activities for the year ended December 31, 2022 was
mainly net proceeds of approximately $8.0 million from issuance of convertible note and approximately $7.0 million from the market offering,
offset by net repayment of $1.5 million on bank loan.
Net
cash provided by financing activities was approximately $11.5 million for fiscal 2021, as compared to approximately $70.0 million for
fiscal 2020. Net cash provided by financing activities for the year ended December 31, 2021 was mainly net proceeds of approximately
$6.9 million from issuance of convertible note and approximately $5.1 million from the market offering, offset by net repayment of $0.3
million on bank loan.
Net
cash from financing activities was approximately $70.0 million for fiscal 2020, as compared to approximately $7.9 million for fiscal
2019. Net cash provided by financing activities for the year ended December 31, 2020 was mainly from the proceeds of $50 million from
issuance of convertible note and $17.6 million from private placement, $6.5 million proceeds from bank loan, offset by repayment of $3.8
million on bank loan, and $0.3 million repayment to related party.
Capital
Expenditures
The
Company made capital expenditures of $3.9 million, $4.9 million and $1.6 million for the years ended December 31, 2022, 2021 and 2020,
respectively. In these periods, our capital expenditures were mainly used for purchases of office equipment, furniture and payments for
capitalized development cost. The Company will continue to make capital expenditures to meet the expected growth of its business.
C.
Research and Development, Patents and Licenses, Etc.
See
"Item 4. Information on the Company—B. Business Overview—Research and Development." 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 year ended December 31, 2022 that are reasonably likely to have a material and adverse 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 results
of operations or financial condition.
E.
Critical Accounting Estimates
We
prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions
that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were
no material changes made to the accounting estimates and assumptions in the past two years, we continually evaluate these estimates and
assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe
to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual
results could differ from our expectations as a result of changes in our estimates.
We
believe that the following accounting policies involve a higher degree of judgment and complexity in their application and require us
to make significant accounting estimates. Accordingly, these are the policies we believe are the most critical to understanding and evaluating
our consolidated financial condition and results of operations.
82
Use
of estimates
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 but not limited to the useful lives of property and equipment
and capitalized development cost, impairment of long-lived assets, valuation of accounts receivables, loans to third parties, revenue
recognition and realization of deferred tax assets and uncertain tax positions. Actual results could differ from these estimates.
Fair
value measurement
ASC
825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize
the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are 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 for similar assets and liabilities in active markets, quoted market prices for
    identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived
    from or corroborated by observable market data.
●
Level 3 — inputs
    to the valuation methodology are unobservable.
Unless
otherwise disclosed, the fair value of the Company's financial instruments including cash, notes and accounts receivable, due from
related parties, prepayments, deposits and other current assets, notes and accounts payable, customer deposits, salaries and benefits
payables, due to related party and taxes payable approximates their recorded values due to their short-term maturities. The fair value
of the long-term prepayments, deposits and other assets and loans to third parties approximate their carrying amounts because the deposits
were paid in cash.
The
Company elected the fair value option to account for its convertible loan. The Company engaged an independent valuation firm to perform
the valuation. The fair value of the convertible loans is calculated using the binomial tree model. The convertible loans are classified
as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity
and reflect the Company's own assumptions in measuring fair value. Significant estimates used in developing the fair value of the
convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected
timing of conversion. Refer to Note 9 for additional information.
As
the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a
change in these inputs could result in a significant change in the fair value measurement.
Accounts
receivable, net
Accounts
receivable, net, is stated at the original invoiced amount net of write-offs and allowance for doubtful accounts. The Company reviews
the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances.
Past-due balances over 90 days are reviewed individually for collectability. In evaluating the collectability of individual accounts
receivable balances, the Company considers several factors, including the age of the balance, the customer's payment history, current
credit-worthiness, and current economic trends. Accounts receivable balances are written off after all collection efforts have been exhausted.
Typically, the Company includes unbilled receivables in accounts receivable for contracts on which revenue has been recognized, but for
which the customer has not yet been billed. Unbilled receivables, substantially all of which are expected to be billed within one year
are stated at their estimated realizable value and consist of costs and fees billable on contract completion or the occurrence of contractual
payment phase.
83
Capitalized
development costs
The
Company follows the provisions of Accounting Standards Codification ("ASC") 985-20, "Costs of Software to be Sold,
Leased, or Marketed." ASC 985-20 provides guidance on capitalization of the costs of software developed or obtained for sold, leased,
or marketed. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred
during the application development stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if
it is determined that these upgrades or enhancements add additional functionality to the application. The capitalized development cost
is amortized on a straight-line basis over the estimated useful life, which is generally five years. Management evaluates the useful
lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact
the recoverability of these assets.
Impairment
for long-lived assets
Long-lived
assets, including property, equipment, furniture and fixtures and intangible assets with finite lives are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When these events occur, the
Company measures impairment by comparing the carrying values of the long-lived assets to the estimated undiscounted future cash flows
expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less
than the carrying amounts of the assets, the Company would recognize an impairment loss based on the excess of the carrying value over
the assessed discounted cash flow amount.
Long-term
investments
Long-term
investments are primarily consisted of equity investments in privately held entities accounted for using the measurement alternative
and equity investments accounted for using the equity method. On January 1, 2022, the Company adopted ASU 2016-01 Financial Instruments-Overall
(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company
started to record equity investments at fair value, with gains and losses recorded through net earnings. And the Company elected to measure
certain equity investments without readily determinable fair value at cost, less impairments, plus or minus observable price changes
and assess for impairment quarterly.
Equity
investments without readily determinable fair values
After
the adoption of this new accounting standard, the Company elected to record equity investments without readily determinable fair values
and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring
basis, and report changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity
investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment
of the same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known.
Equity
investments with readily determinable fair values
Equity
investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted
prices in active markets at the reporting date.
Equity
investments accounted for using the equity method
The
Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise
control, using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss
for its share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary
impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the
entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination,
particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes
in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any
identified impairment is other-than-temporary.
84
Revenue
recognition
The
Company adopted ASC Topic 606 Revenue from Contracts with Customers ("ASC 606") on January 1, 2019 using the modified retrospective
approach. Revenues for the years ended December 31, 2022, 2021 and 2020 were presented under ASC 606. There is no adjustment to the opening
balance of retained earnings at January 1, 2019 since there was no change to the timing and pattern of revenue recognition upon adoption
of ASC 606. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company's customers
in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services and is recorded net
of value-added tax ("VAT"). To achieve that core principle, the Group applies the following steps:
Step
1: Identify the contract (s) with a customer
Step
2: Identify the performance obligations in the contract
Step
3: Determine the transaction price
Step
4: Allocate the transaction price to the performance obligations in the contract
Step
5: Recognize revenue when (or as) the entity satisfies a performance obligation
The
Company derives its revenues from four sources: (1) revenue from application development services, (2) revenue from consulting and technical
support services, (3) revenue from subscription services, (4) trading revenue. All of the Company's contracts with customer do
not contain cancelable and refund-type provisions.
(1)
Revenue from application development service
The
Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform
services including project planning, project design, application development and system integration based on customers' specific
needs. These services also require significant production and customization. Upon delivery of the services, customer acceptance is generally
required. In the same contract, the Company is generally required to provide post-contract customer support ("PCS') for a
period from three months to three years ("PCS period") after the customized application development services are delivered.
The type of services for PCS clause is generally not specified in the contracts or as stand-ready services on when-and-if-available basis.
The unspecified PCS is stand-ready service on when-and-if-available basis. It grants the customers on line and telephone access to technical
support personnel during the term of the service. Specified PCS includes specified service term in the contract such as training.
The
Company's application development service revenues are generated primarily from contracts with PRC government or related agencies
and state-owned enterprises. The contracts contain negotiated billing terms which generally include multiple payment phases throughout
the contract term and a significant portion (30% - 50%) of contract amount usually is billed upon the completion of the related projects.
Pursuant to the contract terms, the Company has enforceable right on payments for the work performed.
The
Company sometimes provides a warranty for its application development service contracts. The warranty period is typically 12-36 months
upon the completion of the application development service. In accordance with ASC 606-10-25-19, the Company believes the warranty provision
in the contracts generally represents service-type warranty, which is a distinct performance obligation and the Company also provides
the similar service on standalone basis and customers can benefit from the related service-type warranty service. For the service warranty
component, the customer simultaneously receives and consumes the benefits provided by the company performance over the warranty term,
therefore, the service warranty is satisfied over time. The revenue allocated to the service warranty is recognized over the warranty
period.
85
The
Company assesses that application development service, PCS or specific service and service-type warranty service, if applicable, are
distinct performance obligations in the application development service contracts. The Company provides these services on standalone
basis and customers are able to benefit from each of the service on its own. In addition, the timing of delivery of these performance
obligations can be separately identifiable in the contracts. The transaction price is allocated to these identified performance obligations
based on the relative standalone selling prices. The transaction price allocated to PCS or unspecific service and service-type warranty,
if applicable, on a straight-line method over the contractual period. Revenue allocated to specified PCS is recognized as the related
services are rendered. The transaction price allocated to application development service is recognized over time as the Company's
performance creates or enhances the project controlled by the customer and the control is transferred continuously to our customers.
The Company uses an input method based on cost incurred as the Company believes that this method most accurately reflects the Company's
progress toward satisfaction of the performance obligation, which usually takes less than one year. Under this method, the transaction
price allocated to application development service is recognized as work is performed based on the ratio of costs incurred to date to
the total estimated costs at completion of the performance obligations.
Incurred
costs include all direct material, labor and subcontract costs, and those indirect costs related to application development performance,
such as indirect labor, supplies, and tools. Cost-based input method requires the Company to make estimates of revenues and costs to
complete the construction. In making such estimates, significant judgment is required to evaluate assumptions related to the costs to
complete the application development, including materials, labor, and other system costs. The Company's estimates are based upon
the professional knowledge and experience of our engineers and project managers to assess the contract's schedule, performance,
technical matters. The Company has adequate cost history and estimating experience, and with respect to which management believes it
can reasonably estimate total development costs. If the estimated costs are greater than the related revenues, the Company recognizes
the entire estimated loss in the period the loss becomes known and can be reasonably estimated. Changes in estimates for application
development services include but not limited to cost forecast changes and change orders. The cumulative effect of changes in estimates
is recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. To date, the
Company has not incurred a material loss on any contracts. However, as a policy, provisions for estimated losses on such engagements
will be made during the period in which a loss becomes probable and can be reasonably estimated. If contract modifications result in
additional goods or services that are distinct from those transferred before the modification, they are accounted for prospectively as
if the Company entered into a new contract. If the goods or services in the modification are not distinct from those in the original
contract, sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs and
contract values.
In
certain application development service arrangements, the Company sells and delivers IT equipment on standalone basis prior to the delivery
of the services. In these cases, the Company controls the IT equipment before they are transferred to the customer. The Company has the
right to direct the suppliers and control the goods or assets transferred to its customers. Thus, the Company considers it should recognize
revenue as a principal in the gross amount of consideration to which it is entitled in exchange for the IT equipment delivered. The Company
assesses the sale of equipment is separately identifiable from other promises in the contract and it is distinct performance obligation
within the context of the contract. Accordingly, the revenue from the related IT equipment based on its relative standalone selling price
is recognized upon customer acceptance after delivery.
(2)
Revenue from consulting and technical support services
Revenue
from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional
consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date
its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract
term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance
obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis
as customers receive and consume benefits of such services.
(3)
Revenue from subscription services
Revenue
from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications
for a subscribed period. The Company's monthly or quarterly billing to customer is on the basis of number of uses or the actual
usage by the customers. The subscription arrangements are considered service contracts because customers do not have the right to take
possession of the software and can only benefit from the software when provided the right to access the software. Accordingly, the subscription
services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract
term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.
(4)
Trading revenue
The
Company started trading business (sales of consumables) for the year ended December 31, 2021 and recognized revenue at a point in time
when control of such products transfers to the customer, which generally occurs upon shipment or delivery depending on the terms of the
contracts with the customer. Product sale contracts typically include a single performance obligation and there are no rights of return.
The transaction price is based on the fixed contractual price with the customer. Billings to the customer for the sale of products occur
at the time the products are transferred to the customer. Revenue from trading business accounted for 31.8% of the Company's revenue
for the year ended December 31, 2022.
86
Revenue
includes reimbursements of travel and out-of-pocket expense, with equivalent amounts of expense recorded in cost of revenue. The Company
reports revenues net of value added tax ("VAT"). The Company's subsidiaries in PRC are subject to a 6% to 13% value
added tax ("VAT") and related surcharges on the revenues earned from providing services and products.
Practical
Expedient and Exemptions
The
Company does not disclose the value of unsatisfied performance obligations within one year by applying the right to invoice practical
expedient provided by ASC 606-10-55-18.
Contract
costs
Contract
costs include contract acquisition costs and contract fulfillment costs which are all recorded within prepayments, deposits, and other
assets in the consolidated balance sheets.
Contract
acquisition costs consist of incremental costs incurred by the Company to originate contracts with customers. Contract acquisition
costs, which generally include costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental
costs are expected to be recovered over the contract period. All other costs incurred regardless of obtaining a contract are expensed
as incurred. Contract acquisition costs are amortized over the period the costs are expected to contribute directly or indirectly
to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of goods or services to
the customer to which the costs relate. Contract fulfillments costs consist of costs incurred by the Company to fulfill a contract
with a customer and are capitalized when the costs generate or enhance resources that will be used in satisfying future performance obligations
of the contract and the costs are expected to be recovered. Capitalized contract fulfillment costs generally include contracted
services, direct labor, materials, and allocable overhead directly related to resources required to fulfill the contract. Contract
fulfillment costs are recognized in cost of revenue during the period that the related costs are expected to contribute directly or indirectly
to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of goods or services to the
customer to which the costs are related. There were no contract fulfillment cost and contract acquisition costs as of December 31, 2022
and 2021.
Contract
balance
The
accounts receivable includes both unbilled accounts receivable and billed accounts receivable. The Company records unbilled accounts
receivable for revenue that has been recognized in advance of billing the customer, which is common for application development service
contracts. The unbilled accounts receivable represents the Company's right to consideration in exchange for the service that the
Company has performed to the customer before payment is due and the unbilled account receivable will be reclassified into billed accounts
receivable when the Company has the right to invoice. Contract liabilities are presented as customer deposits and deferred revenue on
the consolidated balance sheet. Contract liabilities relate to payments received in advance of completion of performance obligations
under a contract. Contract liabilities are recognized as revenue upon the completion of performance obligations. As of December 31, 2022
and 2021, the balance of customer deposits amounted to $483,735 and $575,303, respectively. As of December 31, 2022 and 2021 the balance
of deferred revenue amounted to $893,263 and $1,344,637, respectively.
Income
taxes
The
Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized
when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial
statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount expected to be realized.
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. The amount recognized is the largest amount of tax benefit that is greater than 50% likely 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 tax are classified as income tax expense in the period incurred. No significant penalties
or interest relating to income taxes have been incurred during the years ended December 31, 2022 and 2021. All of the tax returns of
the Company's subsidiary in China remain subject to examination by the tax authorities for five years from the date of filing.
87
C.
Item
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors and Senior Management
Below
is a list of our directors, senior management and any employees upon whose work we are dependent as of the date of this Annual Report,
and a brief account of the business experience of each of them. The business address for our directors and officers is Advanced Business
Park, 9th Fl, Bldg C2, 29 Lanwan Lane, Hightech District, Zhuhai, Guangdong 519080, China
Name
Age
Position
Stewart Lor
59
CEO, President, and Chairman of the Board
Yuxia Xu
49
Chief Financial Officer and Chief Operating Officer
Jing Deng
37
Chief Product Officer
Xuzhi Zhou
48
Chief Business Development Officer
Wei Jiang
(1)(4)
50
Independent Director
Mr. Haoqing Su
(2)
60
Independent Director
Jian Sun
(3)
44
Independent Director
(1)
Chair of the Audit Committee.
(2)
Chair of the Nominating
    Committee.
(3)
Chair of the Compensation
    Committee.
(4)
Audit Committee financial
    expert.
Stewart
Lor
is a co-founder of our Company and served as our co-CEO and co-Chairman of the Board from October 2019 to July 2022. After
Mr. Ban Lor's resignation from his position as the co-CEO and co-Chairman of the Board on July 29, 2022, Mr. Stewart Lor has been
serving as our sole CEO and Chairman of the Board. Mr. Lor has been serving on our Board and as our CFO since August 2018, and as our
President since October 2019. Mr. Lor ceased to act as the CFO of the Company on April 15, 2022. Previously, he served on our Board and
as our Chief Operating Officer from October 1997 to September 2006. Mr. Lor served as President of Lorons International Corporation from
August 1988 to October 1995. He had served various executive positions at Cmark Holdings Ltd. and Fanz Co., Ltd. from November 2006 to
September 2017. He holds a B.S. in Biochemistry from State University of New York at Stony Brook. We believe he is qualified to serve
on the Board because of the perspective and experience he brings as our cofounder.
Yuxia
Xu
is appointed as Chief Financial Officer and Chief Operating Officer of the Company, with effect from May 1, 2022, and appointed
as an executive director of the Company on October 28, 2022. Ms. Xu is a seasoned and proven professional in the fields of capital markets,
accounting management, information technology and management consulting. She had served as a Senior Consultant to the Company since 2017
and had previously held various management and operations positions, including: Chief Operating Officer at Fanz Corporation, an entertainment
technology company; Managing Director at Cmark Capital, a financial services and investment firm; Vice President at Ntechnology, a software
provider and Senior Software Engineer at Goldenspider, an accounting software company. Ms. Xu holds a Master of Science in Applied Mathematics
from Dalian University of Technology.
88
Jing
Deng
currently serves as the Chief Product Officer at Powerbridge Technologies. Prior to joining the Company, he served various
management positions in technology operations, business development, product design and applications development at software and technology
companies including Kingdee Software and Ygsoft Corporation. Mr. Deng holds a Bachelor's degree in Software Engineering from Beijing
Institute of Technology.
Xuzhi
Zhou
currently serves as the Chief Business Development Officer at Powerbridge Technologies. Previously, Mr. Zhou had served
various management positions in logistics management, financial services, supply chain, platform services and business development for
Chinasoft Resource, ZTE Communications and Hoolinks Technologies. Mr. Zhou holds a Bachelor's degree in Computer Science from Shanxi
University.
Haoqing
Su
is appointed as an Independent Director of the Board and serves as Chairman of the Nominating Committee and Member of the
Compensation Committee and the Audit Committee. Mr. Su cofounded and served in various executive and operations positions in several
internationally based companies in international trade of auto parts, manufacturing of textile products, consumer food and beverage service,
and investment consulting and management. He is an avid investor and collector of antique collectibles and has a vast collection of antique
bronze and jade, ancient porcelain and coins, traditional paintings and other antique collectibles. He holds a Bachelor degree in Physical
Education from Guangzhou Sport University.
Wei
Jiang
is an independent director of the Company. Ms. Jiang has over twenty years of experiences in the finance and accounting
field. Previously, she served as a CFO at Cmark Capital, an investment management firm, Senior Accountant at Aluminum Corporation of
China, an aluminum producer and distributor, and Financial Manager at Hiking Group, a publicly listed company. Ms. Jiang holds a bachelor's
degree in Financial Management from China University of Petroleum and is a Certified Accountant.
Jian
Sun
is an independent director of the Company. Mr. Sun has multiple years of experience in financial investment and management.
Mr. Sun is an investor and expert in blockchain and will provide strategic guidance to the Company on its blockchain business, including
financial operations, investment management and strategic partnerships. Mr. Sun holds a master's degree from Australian National
University, and he also serves as the co-president of CUC China-US Blockchain Association.
Mr.
Wei Guan resigned from his position as the independent Director of the Company, effective from April 18, 2022.
Mr.
Ban Lor resigned from his position as the Co-Chief Executive Officer and Co-Chairman of the Board, effective from July 30, 2022.
Mr.
Ruizhong Jiang resigned from his position as the independent Director of the Company for personal reason effective from October 28, 2022.
89
Mr.
Tianfei Feng resigned from his position as the Chief Research & Development Officer of the Company, effective from February 28, 2022.
Mr. Liping Shu resigned from his position as the Chief Marketing Officer of the Company, effective from April 15, 2022.
None
of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the
ability or integrity of any of our directors, director nominees or executive officers.
Limitation
on Liability and Other Indemnification Matters
The
Companies Act does not limit the extent to which the Fourth Amended and Restated Memorandum and Articles of Association may provide for
indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary
to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Fourth Amended
and Restated Memorandum and Articles of Association permit indemnification of officers and directors for losses, damages, costs and expenses
incurred in their capacities as such unless such losses or damages arise from dishonesty of such directors or officers willful default
of fraud. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling
us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
B.
Compensation of Directors and Executive Officers
Executive
Compensation
Summary
Compensation Table
The
following table sets forth all cash compensation paid by us, as well as certain other compensation paid or accrued, in fiscal 2022, 2021
and 2020 to each of the following named executive officers.
Name/principal position
Year
Salary
Equity
Compensation
All Other
Compensation (4)
Total
Paid
Ban Lor/(former) co-CEO (1)
2020
215,451
8,034
-
223,485
2021
220,513
100,822
-
321,335
2022
89,800
-
-
89,800
Stewart Lor/co-CEO/CEO (2)
2020
198,086
68,292
-
266,378
2021
200,111
100,822
-
300,933
2022
116,400
-
1,000,000
1,116,400
Yuxia Xu/CFO and Chief Operating Officer (3)
2021
-
-
-
-
2022
-
-
600,000
600,000
(1)
Appointed
Chairman, President and CEO effective as of August 2018 and resigned as President as of October 2019, resigned as the Co-Chief Executive
Officer and Co-Chairman of the Board as of July 30, 2022.
(2)
Appointed
CFO effective as of August 2018 and appointed as co-Chairman and co-CEO as of October 2019. Stewart Lor ceased to act as CFO in April
2022.
(3)
Appointed
CFO and Chief Operating Officer, with effect from May 1, 2022.
(4)
Amounts reported in this column refer to the cash bonus granted
to CEO and CFO provided by the Company with respect to their contribution to date approved by Compensation Committee of the Company.
Cash bonuses are paid in accordance with general compensation plan of the Company to reward and further incentive officers for achievement
of the Company's business strategy and development goals.
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Under
PRC laws, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month
prior to the date on which the employment agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate
an employment agreement in the absence of cause, then we are obligated to pay the employee one month's salary for each year we
have employed the employee. We are, however, permitted to terminate an employee for cause without notice or penalty to our company, where
the employee has committed a crime or the employee's actions or inactions have resulted in a material adverse effect to us.
Employment
Agreements
We
have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is
employed for a specified time period. The term will automatically extend for additional 12-month periods unless a party to the agreement
terminates it upon 3-months' notice or proposes to re-negotiate the terms of the employment with the other party within 3 months
prior to the expiration of the applicable term, or unless the employment is terminated earlier pursuant to the terms of the agreement.
Each
executive officer has agreed to hold, both during and after the termination or expiry or her employment agreement, in strict confidence
and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable
law, any of our confidential information or trade secrets, any confidential information or trade secrets of our clients or prospective
clients, or the confidential or proprietary information of any third party received by us and for which we have confidential obligations.
The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive,
develop or reduce to practice during the executive officer's employment with us and to assign all right, title and interest in
them to us, and assist us in obtaining and enforcing patents. Copyrights and other legal rights for these inventions, designs and trade
secrets.
In
addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or
her employment and typically for one year following the last date of employment. Specifically, each executive officer has agreed not
to (i) solicit from any customer doing business with us during the effective term of the employment agreement business of the same or
of a similar nature to our business; (ii) solicit from any of our known potential customer business of the same or of a similar nature
to that which has been the subject of our known written or oral bid, offer or proposal, or of substantial preparation with a view to
making such a bid, proposal or offer; (iii) solicit the employment or services of, or hire or engage, any person who is known to be employed
or engaged by us; or (iv) otherwise interfere with our business or accounts, including, but not limited to with respect to any relationship
or agreement between any vendor or supplier and us.
Director
Compensation
The
directors may receive such remuneration as our Board may determine from time to time. Each director is entitled to be repaid or prepaid
for all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our Board or
committees of our Board or general meetings or separate meetings of any class of shares or of debenture of the Company or otherwise in
connection with the discharge of his or her duties as a director. Employee directors are entitled to receive $4,500 payable quarterly
for their services. Non-employee directors are entitled to receive stock option to purchase certain number of Ordinary Shares under the
Company's 2018 Stock Option Plan.
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2018
Stock Option Plan
We
adopted the 2018 Stock Option Plan (the "2018 Plan") on April 4, 2019 (the "Effective Date"), which was further
amended by the First Amendment to the 2018 Plan (the "First Amendment", and collectively referred to as the "Plan"
with the "2018 Plan"). The Plan is a stock-based compensation plan that provides for discretionary grants of stock options
to key employees, directors and consultants of the Company. The purpose of the Plan is to recognize contributions made to our Company
and its subsidiaries by such individuals and to provide them with additional incentive to achieve the objectives of our Company. Section
3(a) and 6(f) are amended as the following. The total number of Ordinary Shares issuable upon the exercise of all outstanding Options
granted under the Plan shall not exceed 20% of the total number of outstanding Ordinary Shares.
On
April 4, 2019, the Board approved several restricted stock options grants to the members of executive management and the Board of the
Company pursuant to the terms of the Plan. Specifically, the Company granted an aggregate of 1,050,500 stock options to key employees
and directors under the Plan. Stock options granted to key employees and directors generally have a term of three years, but are subject
to earlier termination in connection with termination of continuous service to the Company. Stock options are valid for a period of 10
years from April 4, 2019 to April 5, 2029. As at the grant date of April 4, 2019, the weighted-average fair value per share was $5.00
and the estimated total fair value of the restricted shares granted was $5,252,500. No grants were made in fiscal year 2020.
On
February 23, 2020, the Board approved to register all the shares issuable under the Company's 2018 Amended Option Plan in a registration
statement on a Form S-8 (File No. 333-253408), representing 9,155,464 ordinary shares issuable under our Amended 2018 Stock Option Plan
(the "
First Amendment"
). The Company has issued certain options to the employees, advisors, and consultants (collectively
the "Participants") of the Company under the Amended Plan to purchase in an aggregate amount of 9,155,464 Ordinary Shares
the grants have been made under the plan as of the date hereof. The following is a summary of the Plan and is qualified by the full text
of the Plan.
On
June 16. 2022, the Board approved to the proposal to modify the Company's Amended 2018 Stock Option Plan (the "
Second
Amendment
", and collectively with the 2018 Plan and the First Amendment, the "
Amended 2018 Plan
") by supplementing
various clauses in relation to the grant of Restricted Shares and Restricted Shares Units to the employees, directors and consultants.
On
July 8, 2022, the Board approved to register all the shares issuable under the Company's Amended 2018 Stock Option Plan in a registration
statement on a Form S-8 (File No. 333-266092), representing 19,970,545 ordinary shares issuable under our Amended 2018 Plan. The Company
has granted certain Restricted Shares and Restricted Shares Units to the Participants of the Company under the Amended Plan to purchase
in an aggregate amount of 12,000,000 Ordinary Shares and the grants have been made under such plan as of the date hereof.
On
January 20, 2023, the Board approved to register all the shares issuable under the Company's Amended 2018 Plan in a registration
statement on a Form S-8 (File No. 333-269513) representing additional 62,273,499 Ordinary Shares of the Company reserved for issuance
under the Amended 2018 Plan, which are in addition to the 19,970,545 Ordinary Shares registered on the Prior Registration Statement.
Accordingly, the number of ordinary shares of the Company issuable upon the exercise of all outstanding options granted under the Amended
2018 Plan is 82,244,044 ordinary shares.
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Administration
.
The Plan will be administered by our Board, or, once constituted, the Compensation Committee of the Board (we refer to body administering
the Plan as the "Committee").
Number
of Ordinary Shares.
The number of Ordinary Shares that may be issued under the Plan is the total number of Ordinary Shares in the
capital of the Company issuable upon the exercise of all outstanding Options granted under this Plan shall not at any time exceed 20%
of the total number of outstanding Ordinary Shares at the time of issuance, from time to time. If there is a forfeiture or termination
without the delivery of Ordinary Shares or of other consideration of any option made under the Plan, the Ordinary Shares underlying such
option, or the number of Ordinary Shares otherwise counted against the aggregate number of Ordinary Shares available under the Plan with
respect to the option, to the extent of any such forfeiture or termination, shall again be, or shall become, available for granting options
under the Plan. The number of Ordinary Shares issuable under the Plan is subject to adjustment, in the event in the event of any reorganization,
recapitalization, stock split, stock distribution, merger, consolidation, split-up, spin-off, combination, subdivision, consolidation
or exchange of shares, any change in the capital structure of the company or any similar corporate transaction. Except as the Board or
the Committee determines, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Option. In the
event of a spin-off transaction, the Board or the Committee may in its discretion make such adjustments and take such other action as
it deems appropriate with respect to outstanding Options under the Plan.
Eligibility
.
All persons as the Board or the Committee may select from among the employees, directors, and consultants of the Company.
Stock
Options
. The Board or Committee shall determine the provisions, terms, and conditions of each option including, but not limited to,
the option vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, shares, cashless
settlement, or other consideration) upon settlement of the option, payment contingencies and the exercise price; each option will last
for the term stated in the option agreement, provided, however that in the case of an option that is to qualify as an Incentive Share
Option as such term is defined in Section 422 of the Code, the term shall not exceed ten (10) years. It is intended that stock options
qualify as "performance based compensation" under Section 162(m) of the Code and thus be fully deductible by us for federal
income tax purposes, to the extent permitted by law.
Payment
for Stock Options and Withholding Taxes
. The Board or Committee may make one or more of the following methods available for payment
of an option, including the exercise price of a stock option, and for payment of the minimum required tax obligation associated with
an award: (i) cash; (ii) cheque ; (iii) with respect to options, payment through a broker-dealer sale and remittance procedure
pursuant to which the optionee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate
sale of some or all of the purchased Ordinary Shares and remit to the Company sufficient funds to cover the aggregate exercise price
payable for the purchased Ordinary Shares and (B) shall provide written directives to the Company to deliver the certificates for the
purchased Ordinary Shares directly to such brokerage firm in order to complete the sale transaction; (iv) cashless election; or
(v) any combination of the foregoing methods of payment.
No
Ordinary Shares shall be delivered under the Plan to any optionee or other person until such optionee or other person has made arrangements
acceptable to the Board or Committee for the satisfaction of any national, provincial or local income and employment tax withholding
obligations. Upon exercise of an option the Company shall have the right, but not the obligation (except as required by the applicable
laws), to withhold or collect from optionee an amount sufficient to satisfy such tax obligations. The optionee will be solely responsible
for his/her own tax obligations.
93
Transferability
of Option
. Options shall be transferable (i) at will and by the laws of succession and distribution; (ii) during the lifetime of
the Optionee, to the extent and in the manner authorized by the Administrator; and (iii) upon delivery of a written assignment of the
Options duly executed by the Optionee at the principal office of the Company, along with the Options and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. The Optionee shall surrender its Options to the Company within seven (7) calendar
days of the date on which the Optionee delivers the assignment form to the Company assigning its Options. Upon such surrender and, if
required, such payment, the Company shall execute and deliver new Options in the name of the assignee and shall promptly cancel the surrendered
Options. Notwithstanding the foregoing, the Optionee may designate one or more beneficiaries of the Optionee's Option in the event
of the Optionee's death on a beneficiary designation form provided by the Administrator"
Amendment
of Award Agreements; Amendment and Termination of the Plan; Term of the Plan
. The Board may at any time amend, suspend or terminate
the Plan; provided, however, that no such amendment shall be made without the approval of the Company's shareholders to the
extent such approval is required by applicable laws, or if such amendment would adversely affect the right of any participant under any
agreement in any material way without the written consent of the participant. No option may be granted during any suspension of the Plan
or after termination of the Plan. No suspension or termination of the Plan shall adversely affect any rights under options already granted
to an optionee. The Plan has become effective on the date of the effectiveness of the Company's initial public offering. It shall
continue in effect for a term of ten (10) years unless sooner terminated or unless renewed for another period not to exceed ten (10)
years pursuant to shareholder approval.
On
May 26, 2021, the Board approved to issue certain options to its employees, advisors, and consultants of the Company under the Amended
Plan to purchase in an aggregate amount of 7,604,964 ordinary shares, par value $0.00166667 per share to be governed by the terms and
conditions set forth in a form of option agreement.
Notwithstanding
the foregoing, neither the Plan nor any outstanding option agreement can be amended in a way that results in the repricing of a stock
option. Repricing is broadly defined to include reducing the exercise price of a stock option or cancelling a stock option in exchange
for cash, other stock options with a lower exercise price or other stock awards. (This prohibition on repricing without shareholder approval
does not apply in case of an equitable adjustment to the awards to reflect changes in the capital structure of the company or similar
events.)
C.
Board Practices
Composition
of Board; Risk Oversight
Our
Board presently consists of five (5) directors. Pursuant to our Fourth Amended and Restated Memorandum and Articles of Association, the
number of our board shall not be less than two (2). At any one time, at least majority of the Board shall be independent directors. Our
shareholders may elect new director either to fill in a vacancy or add additional member to the Board via ordinary resolutions and the
directors may appoint any new director to fill a vacancy or as a member to the Board until the next annual meeting of the Company. The
directors have been divided into two classes, being the class I directors (the "Class I Directors") and the class II directors
(the "Class II Directors") immediately prior to the consummation of Company's IPO. The number of directors in each
class shall be as nearly equal as possible. The Class I Directors shall stand elected for a term expiring at the Company's initial
meeting after the adoption of the Fourth Amended and Restated Memorandum and Articles of Association and the Class II Directors shall
stand elected for a term expiring at the Company's third annual general meeting following the initial meeting. Directors elected
to succeed those Class I Directors whose terms expire shall be elected for a term of office to expire at the first annual general meeting
following their election and directors elected to succeed those Class II Directors whose terms expire shall be elected for a term of
office to expire at the third annual general meeting following their election. The initial members of Class I Directors are Yuping Ouyang
and Bo Wu. The initial members of Class II Directors are Ban Lor and Stewart Lor. A director will be removed from office automatically
if, among other things, the director becomes bankrupt or has a receiving order made against him or suspends payment or compounds with
his creditors, or becomes of unsound mind or dies. Except for the sibling relationship between Mr. Ban Lor and Mr. Stewart Lor, there
is no family relationships between any of our executive officers and directors. Officers are elected by, and serve at the discretion
of the Board. Our Board may meet for the dispatch of business, adjourn and otherwise regulate its meetings as it considers appropriate.
94
Under
the NASDAQ rules, we are required to maintain a Board comprised of at least 50% independent directors, and an audit committee of at least
three members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Exchange Act. There are
no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us
in a general meeting. There are no other arrangements or understandings pursuant to which our directors are selected or nominated. However,
the NASDAQ rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. We have utilized
the exemption afforded by Nasdaq Listing Rule 5615(a)(3) to follow home country practice in lieu of certain requirements, including (i)
the independence requirements for compensation committee and nomination committee as provided in Nasdaq Listing Rule 5605(d) and (e);
(ii) the requirement that a majority of the board must be independent as provided in Nasdaq Listing Rule 5615(b)(1); (iii) the requirement
to hold annual general meeting as provided in Nasdaq Listing Rule 5620(a); and and (iv) the requirement to obtain shareholder approval
prior to a plan or other equity compensation arrangement is established or materially amended as provided in Nasdaq Listing Rule 5635(c).
Under
our Fourth Amended and Restated Memorandum and Articles of Association, we shall hold an annual general meeting in each year other than
the year in which the Fourth Amended and Restated Memorandum and Articles of Association were adopted and shall specify the meeting as
such in the notices calling it. The annual general meeting shall be held at such time and place as the Board shall appoint.
Our
Board plays a significant role in our risk oversight. The Board makes all relevant company decisions. As such, it is important for us
to have our CEO serve on the board as he plays key roles in the risk oversight or the Company. As a smaller reporting company with a
small Board, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.
Director
Independence
Our
Board has reviewed the independence of our directors, applying the NASDAQ independence standards. Based on this review, the board determined
that each of Wei Jiang, Haoqing Su and Jian Sun are "independent" within the meaning of the NASDAQ rules. In making this
determination, our board considered the relationships that each of these non-employee directors has with us and all other facts and circumstances
our board deemed relevant in determining their independence. As required under applicable NASDAQ rules, we anticipate that our independent
directors will meet on a regular basis as often as necessary to fulfill their responsibilities, including at least annually in executive
session without the presence of non-independent directors and management.
Board
Committees
Currently,
three committees have been established under the Board: the Audit Committee, the Compensation Committee and the Nominating Committee.
The
Audit Committee is responsible for overseeing the accounting and financial reporting processes of our company and audits of the financial
statements of our Company, including the appointment, compensation and oversight of the work of our independent auditors. The Compensation
Committee of the Board reviews and makes recommendations to the Board regarding our compensation policies for our officers and all forms
of compensation, and also administers our incentive compensation plans and equity-based plans (but our Board retains the authority to
interpret those plans). The Nominating Committee of the Board is responsible for the assessment of the performance of the Board, considering
and making recommendations to the Board with respect to the nominations or elections of directors and other governance issues. The nominating
committee considers diversity of opinion and experience when nominating directors.
Audit
Committee
The
Audit Committee is responsible for, among other matters:
●
appointing,
    compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm;
●
discussing
    with our independent registered public accounting firm the independence of its members from its management;
●
reviewing
    with our independent registered public accounting firm the scope and results of their audit;
●
approving
    all audit and permissible non-audit services to be performed by our independent registered public accounting firm;
●
overseeing
    the financial reporting process and discussing with management and our independent registered public accounting firm the interim
    and annual financial statements that we file with the SEC;
●
reviewing
    and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory
    requirements;
95
●
coordinating
    the oversight by our Board of our code of business conduct and our disclosure controls and procedures;
●
establishing
    procedures for the confidential and anonymous submission of concerns regarding accounting, internal controls or auditing matters;
    and
●
reviewing
    and approving related-party transactions.
Currently,
our Audit Committee consists of three members, Wei Jiang, Jian Sun and Haoqing su, with Wei Jiang serving as the chairman of the Audit
Committee. Our Board has affirmatively determined that each of the members of the Audit Committee meets the definition of "independent
director" for purposes of serving on an Audit Committee under Rule 10A-3 of the Exchange Act and NASDAQ rules. In addition, our
Board has determined that Wei Jiang qualifies as an "audit committee financial expert" as such term is currently defined
in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules.
Compensation
Committee
The
Compensation Committee is responsible for, among other matters:
●
reviewing
    and approving, or recommending to the Board to approve the compensation of our CEO and other executive officers and directors;
●
reviewing
    key employee compensation goals, policies, plans and programs;
●
administering
    incentive and equity-based compensation;
●
reviewing
    and approving employment agreements and other similar arrangements between us and our executive officers; and
●
appointing
    and overseeing any compensation consultants or advisors.
Our
Compensation Committee consists of three members, Wei Jiang, Haoqing Su and Jian Sun, with Jian Sun serving as the chair of Compensation
Committee. Our Board has affirmatively determined that each of the members of the Compensation Committee meets the definition of "independent
director" for purposes of serving on Compensation Committee under NASDAQ rules.
Nominating
Committee
The
Nominating Committee is responsible for, among other matters:
●
selecting
    or recommending for selection candidates for directorships;
●
evaluating
    the independence of directors and director nominees;
●
reviewing
    and making recommendations regarding the structure and composition of our Board and the Board committees;
●
developing
    and recommending to the Board with corporate governance principles and practices;
●
reviewing
    and monitoring the Company's Code of Business Conduct and Ethics; and
●
overseeing
    the evaluation of the Company's management.
Our
Nominating Committee consists of consists of three members, Jian Sun, Hoaqing Su and Wei Jiang, with Haoqing Su serving as chair of the
Nominating Committee. Our Board has affirmatively determined that each of the members of the Nominating Committee meets the definition
of "independent director" for purposes of serving on a Nominating Committee under NASDAQ rules.
96
Duties
of Directors
Under
Cayman Islands law, our directors have a duty to act honestly, in good faith and in our best interests. Our directors also have a duty
to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling
their duty of care to us, our directors must ensure compliance with our Fourth Amended and Restated Memorandum and Articles of Association.
We have the right to seek damages if a duty owed by our directors is breached.
The
functions and powers of our Board include, among others:
●
appointing
    officers and determining the term of office of the officers;
●
giving
    to any person the right or option of requiring at a future date that an allotment shall be made to him of any share at par or at
    such premium as may be agreed;
●
exercising
    the borrowing powers of the Company and mortgaging the property of the Company;
●
giving
    to any Directors, officers or employees of the Company an interest in any particular business or transaction or participation in
    the profits thereof or in the general profits of the Company either in addition to or in substitution for a salary or other remuneration;
    and
●
resolving
    that the Company be deregistered in the Cayman Islands and continued in a named jurisdiction outside the Cayman Islands subject to
    the provisions of the Companies Act.
Interested
Transactions
A
director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or
she is interested. A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or
she is interested in a transaction we have entered into or are to enter into. A general notice or disclosure to the board or otherwise
contained in the minutes of a meeting or a written resolution of the board or any committee of the Board that a director is a shareholder,
director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or
company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any
particular transaction.
Remuneration
and Borrowing
The
directors may receive such remuneration as our Board may determine from time to time. For the services rendered by the independent
director in any capacity the company will a cash fee in the amount of USD$1,500 per month. Each director is entitled to be repaid or
prepaid for all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our
Board or committees of our Board or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director.
The Compensation Committee will assist the directors in reviewing and approving the compensation structure for the directors. Our Board
may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof,
to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation
of the Company or of any third party.
D.
Employees
As
of the date of this Annual Report, we had a total of 177 full-time employees, of which 90 are in research and development, 17 are in
sales and marketing, 38 are in technical and customer services, and 32 are in general administration.
We
have standard employment, comprehensive confidentiality and non-compete agreements with our management and standard confidentiality and
non-compete terms with all other employees. As required by the laws and regulations in China, we participate in various social security
plans that are organized by municipal and provincial governments, including pension insurance, medical insurance, unemployment insurance,
maternity insurance, job-related injury insurance and housing fund. We are required by PRC laws to make contributions to employee social
security 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.
We
believe that we maintain a good working relationship with our employees, and we have not experienced any labor disputes. None of our
employee is represented by a labor union or covered by collective bargaining agreements. We have not experienced any work stoppages.
E.
Share Ownership
See
Item 7 below.
97
Item
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major Shareholders
The
following tables set forth certain information with respect to the beneficial ownership of our Ordinary Shares for:
●
each
    stockholder known by us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares;
●
each
    of our directors;
●
each
    of our named executive officers; and
●
all
    of our directors and executive officers as a group.
We
have determined beneficial ownership in accordance with the rules of the SEC. Under such rules, beneficial ownership includes any shares
over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right
to subscribe for within 60 days of the date of this Annual Report through the exercise of any warrants or other rights. Except as indicated
by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below
have sole voting and investment power or the power to receive the economic benefit with respect to all Ordinary Shares that they beneficially
own, subject to applicable community property laws. None of the stockholders listed in the table are a broker-dealer or an affiliate
of a broker dealer. None of the stockholders listed in the table are located in the United States and none of the Ordinary Shares held
by them are located in the United States. Applicable percentage ownership is based on 935,444,817 Ordinary Shares outstanding as of April
21, 2023. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Powerbridge, c/o Advanced
Business Park, 9th Fl, Bldg C2, 29 Lanwan Lane, Hightech District, Zhuhai, Guangdong 519080, China.
Beneficial Ownership
Name of Beneficial Owner
Ordinary Shares
Percentage
Stewart Lor
(1)
59,647,297
6.38
%
Haoqing Su
(2)
30,895,121
3.30
%
Wei Jiang
(3)
*
*
Yuxia Xu
(4)
*
*
Xuzhi Zhou
*
*
Jing Deng
*
*
Jian Sun
*
*
All directors and executive officers as a group
90,542,418
9.68
%
HOGSTREAM INTERNATIONAL LTD.
(1)
59,647,297
6.38
%
5% or greater beneficial owners as a group
59,647,297
6.38
%
*
Less
    than 1%.
(1)
Includes
    (i) 59,647,297Ordinary Shares held by Hogstream International Ltd., a British Virgin Islands company wholly-owned by Stewart Lor
    ("Hogstream"). Mr. Lor maintains sole voting control over the shares held by Hogstream, the principal office address
    of which is at Sertus Incorporation (BVI) Limited, Sertus Chambers, P.O. Box 905, Quastsky Building, Road Town, Tortola, British
    Virgin Islands. (ii) Argo Advisory entered into a share purchase agreement dated April 14, 2022 with Hogstream pursuant to which
    Argo Advisory agreed to transfer 10,000,000 Ordinary Shares to Hogstream at a unit price calculated pursuant to the previous day's
    closing price per share after a discount of 20%, for a total consideration of USD$2,536,000. Argo Advisory subsequently transferred
    the above-mentioned 10,000,000 Ordinary Shares to Hogstream on April 20, 2022. (iii) On December 8, 2022, two shareholders entered
    into separate security purchase agreements with Hogstream, pursuant to which each of the two shareholders agreed to sell 9,251,125
    Ordinary Shares to Hogstream at a price of US$0.087 per share for an aggregate total consideration of US$1,614,876. Upon the closing
    of the transactions on December 16, 2022, the two shareholderstransferred an aggregate 18,502,250 Ordinary Shares to Hogstream. (iv)
    An aggregate of 29,835,664 Ordinary Shares acquired by Hogstream, of which (iv.i) 505,920 Ordinary Shares were acquired in the open
    market in December 2022; and (iv.ii) 13,966,544 Ordinary Shares were acquired pursuant to the security purchase agreement dated March
    10, 2023, entered between Hogstream and an existing shareholder of the Issuer; and (iv.iii) 15,363,200 Ordinary Shares were acquired
    pursuant to the security purchase agreement dated March 10, 2023, entered between Hogstream and an existing shareholder of the Issuer.
    Reference is made to the Company's report on Amendment No.4 to the Schedule 13D jointly filed by Stewart Lor and Hogstream
    with the Securities and Exchange Commission on March 22, 2023 for more details on the transaction.
98
(2)
Includes
    (i) 5,814,851 ordinary shares was acquired by Mr. Su pursuant to the security purchase agreement dated December 16, 2022, entered
    between Mr.Su, other Boxinrui's shareholders and Powerbridge Cayman; (ii) 25,080,270 ordinary shares was acquired by Mr. Su
    pursuant to the security purchase agreement dated March 28, 2023, entered between Mr.Su, other Boxinrui's shareholders and
    Powerbridge Cayman.
(3)
Includes
    828,000 Ordinary Shares underlying share options held by Wei Jiang that is exercisable within 60 days after the date of this Annual
    Report.
(4)
Includes
    744,964 Ordinary Shares underlying share options held by Yuxia Xu that is exercisable within 60 days after the date of this Annual
    Report.
As
of the date of this Annual Report, there were 52 holders of record entered in our share register. The number of individual holders of
record is based exclusively upon our share register and does not address whether a share or shares may be held by the holder of record
on behalf of more than one person or institution who may be deemed to be the beneficial owner of a share or shares in our company.
To
our knowledge, no other shareholder beneficially owns more than 5% of our shares. Our Company is not owned or controlled directly or
indirectly by any government or by any corporation or by any other natural or legal person severally or jointly. Our major shareholders
do not have any special voting rights. There are no arrangements, known to us, the operation of which may at a subsequent date result
in a change in control of our Company.
B.
Related Party Transactions
The
following is a description of transactions since the beginning of the Company's preceding three financial years up to the date
hereof, in which the amount involved in the transaction exceeded or will exceed the lesser of $120,000 or one percent of the average
of our total assets as at the year-end for the last two completed fiscal years, and to which any of our directors, executive officers
or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with,
any of these individuals, had or will have a direct or indirect material interest.
Due
from related party
.
As of December 31,
2022
2021
Guangzhou Jiatu Culture Media Co., Ltd.
(1)
$
-
$
132,345
Shanghai Stamp Technology Co., Ltd.
(2)
172,811
-
Ling Lor
(2)
-
8,661
Ban Lor
(2)
37,638
706,148
Stewart Lor
(2)
1,566,478
781,284
Yuxia Xu
(2)
363,666
-
Subtotal
2,140,593
1,628,438
Less: allowance for doubtful accounts
-
(132,345
)
Due from related parties, net
$
2,140,593
$
1,496,093
(1)
In
    2020, the Company had consulting fee prepayment of $132,345 to Guangzhou Jiatu Culture Media Co., Ltd. as of December 31, 2021, which
    the Company has significant influence over with.  Both parties negotiated to terminate the consulting service. The balance
    of $132,345 as of December 31, 2021 was fully allowanced in 2021. From April to June 2022, Guangzhou Jiatu Culture Media Co., Ltd.
    continued to provide equivalent services, so the allowance was recovered.  On June 2, 2022, the Company's CFO sold
    the equity interest in Jiatu Culture Media Co., Ltd., so Jiatu Culture Media Co., Ltd. no longer considered as a related party.
(2)
From
    time to time, the Company advances funds to senior management for business purpose.
(3)
From
    time to time, the Company advances funds to senior management for business purpose.
99
Due
to related party
.
As of December 31,
2022
2021
Hong Yu
(1)
$
118,114
$
108,990
Hybridge Holding Limited
(1)
-
109,872
Subtotal
$
118,114
$
218,862
(1)
The
    above balances represent unpaid loan and expenses to these related parties.
Accounts
payable-related party
As of December 31,
2022
2021
Guangzhou Guangrui
(1)
$
-
$
734,263
Subtotal
$
-
$
734,263
(1)
As
the disposal of Shantou Hongrui in Febuary 2022, Guangzhou Guangrui was no longer considered as a related party and the balance was reclassified
to account payable.
Related
party transactions
For the years ended
2022
2021
2020
Guangzhou Guangrui
(1)
Service fees
$
-
$
725,362
$
-
Guangzhou Jiatu Culture Media Co., Ltd.
(2)
Service fees
$
62,667
$
-
$
-
Stewart Lor
Interest income
$
117,569
$
-
$
-
Yuxia Xu
Interest income
$
22,802
$
-
$
-
Shanghai Stamp Technology Co., Ltd.
Interest income
$
1,771
$
-
$
-
(1)
As
the disposal of Shantou Hongrui in Febuary 2022, Guangzhou Guangrui was no longer considered as a related party.
(2)
On
June 2, 2022, the Company's CFO sold the equity interest in Jiatu Culture Media Co., Ltd., so Jiatu Culture Media Co., Ltd. no
longer considered as a related party.
100
Short
term bank loan
On
November 4, 2021, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $880,239 for a term
of one year and at a fixed annual interest rate of 4.5675%. The bank loan was guaranteed by a third party. The loan was fully repaid
upon maturity.
On
November 11, 2021, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $688,979 for a term
of one year and at a fixed annual interest rate of 4.5675%. The bank loan was guaranteed by a third party. The loan was fully repaid
upon maturity.
On
January 28, 2022, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $1,449,864 for a term
of one year and at a fixed annual interest rate of 4.70%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and
pledged approximately $2.4 million fixed assets as the collateral to secure the loan. The loan was fully repaid upon maturity subsequently.
On
December 16, 2022, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $724,932 for a term
of one year and at a fixed annual interest rate of 4.10%. The bank loan was guaranteed by the Company's CEO and CEO's spouse.
On
March 9, 2021, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $470,765 for a term of one year
and at a fixed annual interest rate of 4.50%. The bank loan was guaranteed by Mr. Ban Lor. The loan was fully repaid upon maturity.
On
June 10, 2022, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $724,932 for a term of one year
and at a fixed annual interest rate of 4.50%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and pledged approximately
$1.8 million fixed assets as the collateral to secure the loan. On December 30, 2022, the Company partially repaid $289,973 in advance.
On
July 15, 2022, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $724,932 for a term of one year
and at a fixed annual interest rate of 4.50%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and pledged approximately
$1.8 million fixed assets as the collateral to secure the loan. On December 30, 2022, the Company fully repaid the loan in advance.
On
March 10, 2021, Powerbridge Zhuhai entered into a loan agreement with Guangfa Bank to obtain a loan of $2,353,828 for a term of one year
and at a fixed annual interest rate of 5.3%. The bank loan was guaranteed by Mr. Ban Lor and the company's account receivable of
some programs was pledged to secure the loan. The loan was fully repaid upon maturity.
On
January 16, 2023, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $520,174 for a term
of one year and at a fixed annual interest rate of 4.20%. The bank loan was guaranteed by the Company's CEO, CEO's spouse
and a third party.
On
January 19, 2023, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $1,449,864 for a term
of one year and at a fixed annual interest rate of 4.20%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and
pledged approximately $2.4 million fixed assets as the collateral to secure the loan.
On
March 14, 2023, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $ 204,758 for a term
of one year and at a fixed annual interest rate of 4.20%. The bank loan was guaranteed by the Company's CEO, CEO's spouse
and a third party.
101
C.
Interests of Experts and Counsel
Not
applicable.
Item
8. FINANCIAL INFORMATION
A.
Consolidated Statements and Other Financial Information
See
Item 18 for our audited consolidated financial statements.
Legal
Proceedings
From
time to time, we are subject to legal proceedings, investigations and claims incidental to the conduct of our business. We are not currently
a party to any legal proceedings or investigations which, in the opinion of our management, is likely to have a material adverse effect
on our business, financial condition or results of operations.
Dividend
Policy
The
holders of our Ordinary Shares are entitled to dividends out of funds legally available when and as declared by our Board. Our Board
has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future
to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other
payments from our operating subsidiaries and other holdings and investments. In addition, our operating subsidiaries may, from time to
time, be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan
agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions.
In the event of our liquidation, dissolution or winding up, holders of our Ordinary Shares are entitled to receive, ratably, the net
assets available to shareholders after payment of all creditors.
B.
Significant Changes
Except
as disclosed elsewhere in this Annual Report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this Annual Report.
Item
9. THE OFFER AND LISTING
A.
Offering and Listing Details.
The
Registration Statement became effective on March 28, 2019. Our Ordinary Shares are currently listed on NASDAQ Capital Market under the
symbol "PBTS".
B.
Plan of Distribution
Not
applicable.
C.
Markets
Our
Ordinary Shares are currently listed on NASDAQ Capital Market under the symbol "PBTS".
D.
Selling Shareholders
Not
applicable.
102
E.
Dilution
Not
applicable.
F.
Expenses of the Issue
Not
applicable.
Item
10. ADDITIONAL INFORMATION
A.
Share Capital
Not
applicable.
B.
Amended and Restated Memorandum and Articles of Association
Our
Fourth Amended and Restated Memorandum and Articles of Association were filed as Exhibit 10.1 of Form 6-K filed on November 6, 2020
and are hereby incorporated by reference into this Annual Report. The following description of our memorandum and articles of
association, as amended and restated from time to time, are summaries and do not purport to be complete. Reference is made to our
Fourth Amended and Restated Memorandum and Articles of Association, effective on September 30, 2020 (respectively, the
"Memorandum" and the "Articles"). We were incorporated as an exempted company with limited liability under
the Companies Act (2018 Revision) of the Cayman Islands, now the Companies Act (Revised) ("Cayman Companies Act"), on
July 27, 2018. A Cayman Islands exempted company:
●
is
    a company that conducts its business mainly outside the Cayman Islands;
●
is
    prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted
    company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise
    in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);
●
does
    not have to hold an annual general meeting;
●
does
    not have to make its register of members open to inspection by shareholders of that company;
●
may
    obtain an undertaking against the imposition of any future taxation;
●
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.
All
of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Our Ordinary Shares are issued in registered form, and
are issued when registered in our register of members. Unless and until the directors resolve to issue share certificates, no share certificate
shall be issued, and the records of the shareholdings of each shareholder shall be in uncertified book entry form. Our shareholders who
are non-residents of the Cayman Islands may freely hold and vote their Ordinary Shares. We may not issue shares or warrants to bearer.
As
of the date of this Annual Report, the authorized share capital of the Company is US $16,666,700 divided into 10,000,000,000 shares of
US $0.00166667 par value each. Subject to the provisions of the Cayman Companies Act and the provisions, if any, of the Articles, and
any directions given by any ordinary resolution and the rights attaching to any class of existing shares, the directors may issue, allot,
grant options over or otherwise dispose of shares (including any fractions of Shares) and other securities of our company at such times,
to such persons, for such consideration and on such terms as the directors may determine. Such authority could be exercised by the directors
to allot shares which carry rights and privileges that are preferential to the rights attaching to ordinary shares provided that if such
operates to vary the rights of holders of ordinary shares then the sanction of a special resolution of the affected class is required.
No share may be issued at a discount except in accordance with the provisions of the Cayman Companies Act. The directors may refuse to
accept any application for shares, and may accept any application in whole or in part, for any reason or for no reason.
103
Ordinary
Shares
General.
The
unissued shares of the Company shall be at the disposal of the Board, under its absolute discretion, at such times and for such consideration
and upon such terms and conditions and for any reason, without limitation, but so that no shares shall be issued at a discount to par
value. Except as otherwise expressly provided in the resolution or resolutions providing for the establishment of any class or series
of preferred shares, no vote of the holders shall be a prerequisite to the issuance of any shares of any class or series of the preferred
shares authorized by and complying with the conditions of the Memorandum and Articles of Association. The board may issue options, warrants,
convertible securities or other similar nature securities.
Dividends
. The
holders of our Ordinary Shares are entitled to such dividends as may be declared by our Board. Our Fourth Amended and Restated Memorandum
and Articles of Association provide that our Board may declare and pay dividends out of the profits of the Company, realized or unrealized,
or from any reserve set aside from profits which the directors determine is no longer needed, or out of share premium account or any
other fund or account which can be authorized for this purpose in accordance with the Law.
Voting
Rights.
In respect of all matters subject to a shareholder's vote, at any general meeting on a show of hands every
Shareholder present in person (or being a corporation, is presented by a duly authorized representative), or by proxy shall have one
vote and on a poll every Shareholder present in person or by proxy or, in the case of a Shareholder being a corporation, by its duly
authorized representative shall have one vote for every share of which he is the holder but so that no amount paid up or credited as
paid up on a share in advance of calls or instalments is treated for the foregoing purposes as paid up on the share. A quorum required
for a meeting of shareholders consists of one shareholder who holds at least one-third of our issued voting shares. Shareholders'
meetings may be held annually. Each general meeting, other than an annual general meeting, shall be an extraordinary general meeting.
Extraordinary general meetings may be called by a majority of our Board or upon a requisition of shareholders holding at the date of
deposit of the requisition not less one-tenth of such of the paid-up share capital of our Company that carries the right to vote at a
general meeting, forthwith proceed to convene an extraordinary general meeting. An ordinary resolution to be passed at a meeting by the
shareholders requires the affirmative vote of a simple majority of the votes attaching to the Ordinary Shares cast at a meeting, while
a special resolution requires the affirmative vote of no less than two-thirds of the votes attaching to the Ordinary Shares cast at a
meeting. A special resolution will be required for important matters such as making changes to our Fourth Amended and Restated Memorandum
and Articles of Association.
Transfer
of Ordinary Shares.
Subject to the restrictions set out below, any of our shareholders may transfer all or any of his or
her Ordinary Shares by an instrument of transfer in the usual or common form prescribed by the NASDAQ Stock Market (the "Designated
Stock Exchange") or in or any other form approved by our Board. Our Board may, in its absolute discretion, decline to register
any transfer of any Ordinary Shares only where such share is not a fully paid up share (and being transferred to a person of whom it
does not approve), or any share issued under any share incentive scheme for employees or pursuant to any other agreement, contract or
other such arrangement. If the Board refuses to register a transfer of any share, it shall, within three months after the date on which
the transfer was lodged with the Company, send to each of the transferor and transferee notice of the refusal. The registration of transfers
of shares or of any class of shares may, subject to compliance with any notice requirement of the Designated Stock Exchange, be suspended
at such times and for such periods (not exceeding in the whole thirty (30) days in any year) as the Board may determine.
Inspection
of Books and Records
. Holders of our Ordinary Shares have no general right under our Fourth Amended and Restated Memorandum
and Articles of Association to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide
our shareholders with annual audited financial statements. See "Where You Can Find Additional Information".
104
Issuance
of Additional Shares.
Our memorandum of association authorizes our Board to issue additional Ordinary Shares from time to
time as our Board shall determine, to the extent of available authorized but unissued shares. Our memorandum of association also authorizes
our Board to establish from time to time one or more series of preference shares and to determine, with respect to any series of preference
shares, the terms and rights of that series, including:
●
the
    designation of the series to be issued;
●
the
    number of shares of the series;
●
the
    dividend rights, conversion rights, voting rights; and
●
the
    liquidation preferences.
Our
Board may issue preference shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares
may dilute the voting power of holders of Ordinary Shares.
Anti-Takeover
Provisions.
Some provisions of our Fourth Amended and Restated 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 to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions
of such preference shares without any further vote or action by our shareholders.
Differences
in Corporate Law
The
Companies Act is modeled after that of English law but does not follow many recent English law statutory enactments. In addition, the
Companies Act differs from laws which applicable to United States corporations and their shareholders. Set forth below is a summary of
some of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to the companies
incorporated in the State of Delaware.
Mergers
and Similar Arrangements.
The Companies Act permits mergers and consolidations between Cayman Islands companies and between
Cayman Islands companies and non-Cayman Islands companies. For these purposes, a "merger" means the merging of two or more
constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company,
and a "consolidation" means the combination of two or more constituent companies into a consolidated company and the vesting
of the undertaking, property and liabilities of such companies to the consolidated company.
In
order to effect a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation,
which must then be authorized by a special resolution of the shareholders of each constituent company, and such other authorization,
if any, as may be specified in such constituent company's articles of association.
The
plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with, inter alia, a declaration
as to the solvency of each constituent company, a list of the assets and liabilities of each constituent company and an undertaking that
a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that
notification of the merger and consolidation will be published in the Cayman Islands Gazette. Dissenting shareholders have the right
to be paid the fair value of their shares if they follow the required procedures under the Companies Act subject to certain exceptions.
The fair value of the shares will be determined by the Cayman Islands court if it cannot be agreed among the parties. Court approval
is not required for a merger or consolidation effected in compliance with these statutory procedures.
In
addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement
is approved, for a creditor-led arrangement, by a majority in number of each class of creditors with whom the arrangement is to be made, and, in either a shareholder or a creditor arrangement, three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and
voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently
the arrangement must be sanctioned by the Grand Court of the Cayman Islands.
105
While
a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can
be expected to approve the arrangement if it determines that:
●
the
    statutory provisions as to the required majority vote have been met;
●
the
    shareholders have been fairly represented at the meeting in question;
●
the
    arrangement is such that an intelligent and honest man of that class acting in respect of his interest would reasonably approve;
    and
●
the
    arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.
When
a take-over offer is made and accepted by holders of not less than 90% of the shares within four months, the offer, or may, within a
two-month period conversing on the expiration of such four months period, require the holders of the remaining shares to transfer such
shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless
there is evidence of fraud, bad faith or collusion.
If
the arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights,
which would otherwise ordinarily be available to the dissenting shareholders of United States corporations, providing rights to receive
payment in cash for the judicially determined value of the shares.
Shareholders'
Suits.
In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company and as a general
rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood
be of persuasive authority in the Cayman Islands, there are exceptions to the foregoing principle, including when:
●
a
    company acts or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholders;
●
the
    act complained of, although not ultra vires, could only be duly effected if authorized by more than a simple majority vote that has
    not been obtained; and
●
those
    who control the company are perpetrating a "fraud on the minority".
Indemnification
of Directors and Executive Officers and Limitation of Liability
. The Companies Act does not limit the extent to which a
company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent
any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against
civil fraud or the consequences of committing a crime. Our Fourth Amended and Restated Memorandum and Articles of Association permit
indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses
or damages arise from dishonesty of such directors or officers willful default of fraud. This standard of conduct is generally the same
as permitted under the Delaware General Corporation Law for a Delaware corporation. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have
been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable.
106
Directors'
Fiduciary Duties.
Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation
and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director
act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director
must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction.
The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation.
He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that
the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling
shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed
basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption
may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by
a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company
and therefore it is considered that he or she owes the following duties to the company: a duty to act bona fide in the best interests
of the company, a duty not to make a profit based on his or her position as director (unless the company permits him or her to do so)
and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest
or his or her duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It
was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may
reasonably be expected from a person of his or her knowledge and experience. However, courts are moving towards an objective standard
with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.
Shareholder
Action by Written Consent.
Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders
to act by written consent by amendment to its certificate of incorporation. Cayman Islands law provides that shareholders may approve
corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to
vote on such matter at a general meeting without a meeting being held. Our Fourth Amended and Restated Memorandum and Articles of Association
provides that anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of
the shareholders may be done without a meeting by written resolution in accordance with such Third Amended and Restated Memorandum and
Articles of Association. A written resolution is passed when it is signed by (or in the case of a shareholder that is a corporation,
on behalf of) all the shareholders, or all the shareholders of the relevant class thereof, entitled to vote thereon, or in the case of
an ordinary resolution, the requisite majority, and may be signed in as many counterparts as may be necessary.
Shareholder
Proposals.
Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual
meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called
by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from
calling special meetings. The Companies Act provides shareholders with only limited rights to requisition a general meeting and does
not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in articles
of association. Our Fourth Amended and Restated Memorandum and Articles of Association allow our shareholders holding not less than 10%
of the share capital in issue to requisition a shareholder's meeting. Other than this right to requisition a shareholders'
meeting, a shareholder may give notice to the Company of business proposed to be brought before an annual general meeting. As an exempted
Cayman Islands company, we are not obliged by law to call shareholders' annual general meetings.
Cumulative
Voting.
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless
the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation
of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder
is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There
are no prohibitions in relation to cumulative voting under the Companies Act but our Fourth Amended and Restated Memorandum and Articles
of Association do not provide for cumulative voting.
Removal
of Directors.
Under the Delaware General Corporation Law, a director of a corporation with a may be removed with the approval
of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our Fourth
Amended and Restated Memorandum and Articles of Association, directors may be removed by way of a special resolution of our shareholders
at any time before the expiration of his or her period of office.
107
Transactions
with Interested Shareholders.
The Delaware General Corporation Law contains a business combination statute applicable to
Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its
certificate of incorporation, it is prohibited from engaging in certain business combinations with an "interested shareholder"
for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person
or a group who or which owns or owned 15% or more of the target's outstanding voting share within the past three years. This has
the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not
be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested
shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming
an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition
transaction with the target's board of directors. The Companies Act has no comparable statute. As a result, we cannot avail ourselves
of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate
transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide
in the best interests of the company and for a proper corporate purpose and not with the effect of constituting a fraud on the minority
shareholders.
Dissolution;
Winding up.
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve,
dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated
by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows
a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions
initiated by the board. Under the Companies Act, a company may be wound up by either an order of the courts of the Cayman Islands or
by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its
members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of
the court, just and equitable to do so. Under the Companies Act and our Fourth Amended and Restated Memorandum and Articles of Association,
our Company may be dissolved, liquidated or wound up by a special resolution of our shareholders.
Variation
of Rights of Shares.
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares
with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.
Under the Companies Act and our Fourth Amended and Restated Memorandum and Articles of Association, if our share capital is divided into
more than one class of shares, we may vary the rights attached to any class with the sanction of a special resolution passed at a separate
general meeting of the holders of the shares of that class.
Amendment
of Governing Documents.
Under the Delaware General Corporation Law, a corporation's governing documents may be amended
with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.
As permitted by the Companies Act, our Fourth Amended and Restated Memorandum and Articles of Association may only be amended with a
special resolution of our shareholders.
Rights
of Non-resident or Foreign Shareholders.
There are no limitations imposed by our Fourth Amended and Restated Memorandum
and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In
addition, there are no provisions in our Fourth Amended and Restated Memorandum and Articles of Association governing the ownership threshold
above which shareholder ownership must be disclosed.
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 "Item
4. Information on the Company", "Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources",
"Item 7. Major Shareholders and Related Party Transactions — B. Related Party Transactions", or elsewhere in this Annual
Report on Form 20-F.
108
D.
Exchange Controls
Under
Cayman Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions
that affect the remittance of dividends, interest or other payments to nonresident holders of our shares.
E.
Taxation
The
following summary of the material Cayman Islands, PRC and U.S. federal income tax consequences of an investment in our Ordinary Shares
is based upon laws and relevant interpretations thereof in effect as of the date of this Annual Report, all of which are subject to changes.
This summary does not deal with all possible tax consequences relating to an investment in our Ordinary Shares, such as the tax consequences
under state, local and other tax laws.
Cayman
Islands Taxation
The
Cayman Islands currently levy 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 the Company 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 the Company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
Material
PRC Income Tax Considerations
Under
the new EIT Law and the Implementing Rules, an enterprise established outside of the PRC with "de facto management bodies"
within the PRC is considered as a resident enterprise and will be subject to a PRC income tax rate of 25% on its global income. According
to the Implementing Rules, "de facto management bodies" refer to "establishments that carry out substantial and overall
management and control over the manufacturing and business operations, personnel, accounting, properties, etc. of an enterprise".
Accordingly, our holding company may be considered a resident enterprise and may therefore be subject to a PRC income tax on our global
income. The State Administration of Taxation issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated
Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, on April 22, 2009. Circular 82
provides certain specific criteria for determining whether the "de facto management body" of a Chinese-controlled offshore
incorporated enterprise is located in China. Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises
and not those invested in by individuals or foreign enterprises, the determining criteria set forth in Circular 82 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 offshore enterprises, regardless of whether they are controlled by PRC enterprises or controlled by or invested
in by individuals or foreign enterprises. If we are considered a resident enterprise and earn income other than dividends from our PRC
subsidiary, such PRC income tax on our global income could significantly increase our tax burden and materially and adversely affect
our cash flow and profitability.
We
do not believe that Powerbridge meets all of the conditions required for PRC resident enterprise. The Company is a company incorporated
outside the PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located,
and its records (including the resolutions of its Board and the resolutions of its shareholders) are maintained, outside the PRC. For
the same reasons, we believe our other entities outside of China are not PRC resident enterprises either. 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". There can be no assurance that the PRC government will ultimately take a view that is
consistent with ours.
However,
if the PRC tax authorities determine that Powerbridge is a PRC resident enterprise for enterprise income tax purposes, we may be required
to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. Such 10% tax rate could
be reduced by applicable tax treaties or similar arrangements between China and the jurisdiction of our shareholders. For example, for
shareholders eligible for the benefits of the tax treaty between China and Hong Kong, the tax rate is reduced to 5% for dividends if
relevant conditions are met. In addition, non-resident enterprise shareholders may be subject to a 10% PRC tax on gains realized on the
sale or other disposition of ordinary shares, if such income is treated as sourced from within the PRC.
109
It
is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC
individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends
or gains, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is
also unclear whether non-PRC shareholders of the 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 the Company is treated as a PRC resident enterprise.
Provided
that our Cayman Islands holding company, Powerbridge, is not deemed to be a PRC resident enterprise, our shareholders who are not PRC
residents will not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of
our shares. However, 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. As a result, gains derived from such indirect transfer may be
subject to PRC enterprise income tax, and the transferee would be obligated to withhold the applicable taxes, currently at a rate of
10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being
required to file a return and being taxed under Circular 7, and we may be required to expend valuable resources to comply with Bulletin
37, or to establish that we should not be taxed under Circular 7 and Bulletin 37.
Prospective
investors should consult with their own tax advisors regarding the applicability of any such taxes, the effects of any applicable income
tax treaties, and any available foreign tax credits.
Material
U.S. Tax Considerations
The
following is a summary of the material U.S. federal income tax consequences of owning and disposing of our Ordinary Shares. The discussion
below of the U.S. federal income tax consequences to "U.S. Holders" will apply to a beneficial owner of our shares that is
for U.S. federal income tax purposes:
●
an
    individual citizen or resident of the United States;
●
a
    corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) in or under
    the laws of the United States, any state thereof or the District of Columbia;
●
an
    estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or
●
a
    trust if (i) a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons are
    authorized to control all substantial decisions of the trust; or (ii) it has a valid election in effect under applicable U.S. Treasury
    regulations to be treated as a U.S. person.
If
a beneficial owner of our shares is not described as a U.S. Holder in one of the four bullet points above and is not an entity treated
as a partnership or other pass-through entity for U.S. federal income tax purposes, such owner will be considered a "Non-U.S. Holder".
The U.S. federal income tax consequences applicable to Non-U.S. Holders is described below under the heading "Tax Consequences
to Non-U.S. Holders of Ordinary Shares".
This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), its legislative history, existing Treasury
regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These authorities are subject
to changes or differing interpretations, possibly on a retroactive basis.
110
This
discussion does not address all aspects of U.S. federal income taxation that may be relevant to us or to any particular holder of our
shares based on such holder's individual circumstances. In particular, this discussion considers only holders that own our shares
as capital assets within the meaning of Section 1221 of the Code. This discussion also does not address the potential application of
the alternative minimum tax or the U.S. federal income tax consequences to holders that are subject to special rules, including:
●
financial
    institutions or financial services entities;
●
broker-dealers;
●
taxpayers
    who have elected mark-to-market accounting;
●
tax-exempt
    entities;
●
governments
    or agencies or instrumentalities thereof;
●
insurance
    companies;
●
regulated
    investment companies;
●
real
    estate investment trusts;
●
certain
    expatriates or former long-term residents of the United States;
●
persons
    that actually or constructively own 5% or more of our voting shares;
●
persons
    that acquired our shares pursuant to the exercise of employee stock options, in connection with employee stock incentive plans or
    otherwise as compensation;
●
persons
    that hold our shares as part of a straddle, constructive sale, hedging, conversion or other integrated transaction; or
●
persons
    whose functional currency is not the U.S. dollar.
This
discussion does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, or state, local or non-U.S.
tax laws. Additionally, this discussion does not consider the tax treatment of partnerships or other pass-through entities or persons
who hold our securities through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income
tax purposes) is the beneficial owner of our shares, the U.S. federal income tax treatment of a partner in the partnership will generally
depend on the status of the partner and the activities of the partnership. This discussion also assumes that any distribution made (or
deemed made) in respect of our shares and any consideration received (or deemed received) by a holder in connection with the sale or
other disposition of such shares will be in U.S. dollars.
We
have not sought, and will not seek, a ruling from the Internal Revenue Service (or "IRS"), or an opinion of counsel as to
any U.S. federal income tax consequence described herein. The IRS may disagree with one or more aspects of the discussion herein, and
its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative
rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.
BECAUSE
OF THE COMPLEXITY OF THE TAX LAWS AND BECAUSE THE TAX CONSEQUENCES TO ANY PARTICULAR HOLDER OF OUR SECURITIES MAY BE AFFECTED BY MATTERS
NOT DISCUSSED HEREIN, EACH HOLDER OF OUR SECURITIES IS URGED TO CONSULT WITH ITS TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES
OF THE OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND NON-U.S. TAX LAWS, AS
WELL AS U.S. FEDERAL TAX LAWS AND APPLICABLE TAX TREATIES.
111
Tax
Consequences to U.S. Holders of Ordinary Shares
Taxation
of Distributions Paid on Ordinary Shares
Subject
to the passive foreign investment company (or "PFIC"), rules discussed below, a U.S. Holder generally will be required to
include in gross income as ordinary income the amount of any cash dividend paid on our Ordinary Shares. A cash distribution on such shares
will be treated as a dividend for U.S. federal income tax purposes to the extent the distribution is paid out of our current or accumulated
earnings and profits (as determined for U.S. federal income tax purposes). Any distributions in excess of such earnings and profits generally
will be applied against and reduce the U.S. Holder's basis in its Ordinary Shares and, to the extent in excess of such basis, will
be treated as gain from the sale or exchange of such Ordinary Shares. With respect to corporate U.S. Holders, dividends on our shares
will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received
from other domestic corporations.
With
respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends on our shares will be taxed at the lower long-term
capital gains rate applicable to qualified dividend income (see "— Taxation on the Disposition of Ordinary Shares"
below), provided that (1) our Ordinary Shares are readily tradable on an established securities market in the United States or, in the
event we are deemed to be a Chinese "resident enterprise" under the EIT Law, we are eligible for the benefits of the Agreement
between the Government of the United States of America and the Government of the People's Republic of China for the Avoidance of
Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income, or the "U.S.-PRC Tax Treaty"; (2) we are
not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year; and (3) certain
holding period requirements are met. Under published IRS authority, shares are considered for purposes of clause (1) above to be readily
tradable on an established securities market in the United States only if they are listed on certain exchanges, which presently include
the Nasdaq Stock Market. U.S. Holders should consult their own tax advisors regarding the tax treatment of any dividends paid with respect
to our Ordinary Shares, including the effects of any change in law after the date of this Annual Report.
If
PRC taxes apply to dividends paid to a U.S. Holder on our Ordinary Shares, such U.S. Holder may be entitled to a reduced rate of PRC
tax under the U.S-PRC Tax Treaty. In addition, such PRC taxes may be treated as foreign taxes eligible for credit against such holder's
U.S. federal income tax liability (subject to certain limitations). U.S. Holders should consult their own tax advisors regarding the
creditability of any such PRC tax and their eligibility for the benefits of the U.S.-PRC Tax Treaty.
Taxation
on the Disposition of Ordinary Shares
Upon
a sale or other taxable disposition of our Ordinary Shares, and subject to the PFIC rules discussed below, a U.S. Holder will recognize
capital gain or loss in an amount equal to the difference between the amount realized in U.S. dollars and the U.S. Holder's adjusted
tax basis in the Ordinary Shares. Capital gains recognized by U.S. Holders generally are subject to U.S. federal income tax at the same
rate as ordinary income, except that long-term capital gains recognized by non-corporate U.S. Holders are generally subject to U.S. federal
income tax at a maximum rate of 20%. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder's holding
period for the Ordinary Shares exceeds one year. The deductibility of capital losses is subject to various limitations. If PRC taxes
would otherwise apply to any gain from the disposition of our Ordinary Shares by a U.S. Holder, such U.S. Holder may be entitled to a
reduction in or elimination of such taxes under the U.S.-PRC Tax Treaty. Any PRC taxes that are paid by a U.S. Holder with respect to
such gain may be treated as foreign taxes eligible for credit against such holder's U.S. federal income tax liability (subject
to certain limitations that could reduce or eliminate the available tax credit). U.S. Holders should consult their own tax advisors regarding
the creditability of any such PRC tax and their eligibility for the benefits of the U.S.-PRC Tax Treaty.
112
Passive
Foreign Investment Company Rules
A
foreign (i.e., non-U.S.) corporation will be a PFIC if at least 75% of its gross income in a taxable year of the foreign corporation,
including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value,
is passive income. Alternatively, a foreign corporation will be a PFIC if at least 50% of its assets in a taxable year of the foreign
corporation, ordinarily determined based on fair market value and averaged quarterly over the year, including its pro rata share of the
assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce,
passive income. Passive income generally includes dividends, interest, rents and royalties (other than certain rents or royalties derived
from the active conduct of a trade or business) and gains from the disposition of passive assets.
Based
on our current composition and assets, we do not expect to be treated as a PFIC under the current PFIC rules. We must make a separate
determination each year as to whether we are a PFIC. As such, our PFIC status, will not be determinable until after the end of each taxable
year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable
year. Depending on the amount of cash we raise in the IPO, together with any other assets held for the production of passive income,
it is possible that, for our 2019 taxable year or for any subsequent taxable year, more than 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. If we are determined
to be a PFIC and a U.S. Holder did not make either a timely qualified electing fund (or "QEF"), election for our first taxable
year as a PFIC in which the U.S. Holder held (or was deemed to hold) Ordinary Shares, or a mark-to-market election, as described below,
such holder generally will be subject to special rules with respect to:
●
any
    gain recognized by the U.S. Holder on the sale or other disposition of its Ordinary Shares; and
●
any
    "excess distribution" made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year
    of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the
    Ordinary Shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder's holding period
    for the Ordinary Shares).
Under
these rules,
●
the
    U.S. Holder's gain or excess distribution will be allocated ratably over the U.S. Holder's holding period for the Ordinary
    Shares;
●
the
    amount allocated to the U.S. Holder's taxable year in which the U.S. Holder recognized the gain or received the excess distribution,
    or to the period in the U.S. Holder's holding period before the first day of our first taxable year in which we are a PFIC,
    will be taxed as ordinary income;
●
the
    amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed
    at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
●
the
    interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such year
    of the U.S. Holder.
In
general, a U.S. Holder may avoid the PFIC tax consequences described above in respect to our Ordinary Shares by making a timely QEF election
to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary
income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our
taxable year ends. There can be no assurance, however, that we will pay current dividends or make other distributions sufficient for
a U.S. Holder who makes a QEF election to satisfy the tax liability attributable to income inclusions under the QEF rules, and the U.S.
Holder may have to pay the resulting tax from its other assets. A U.S. Holder may make a separate election to defer the payment of taxes
on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.
The
QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder
generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment
Company or Qualified Electing Fund), to a timely filed U.S. federal income tax return for the tax year to which the election relates.
Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions
are met or with the consent of the IRS. In order to comply with the requirements of a QEF election, a U.S. Holder must receive certain
information from us. Upon request from a U.S. Holder, we will endeavor to provide to the U.S. Holder no later than 90 days after the
request such information as the IRS may require, including a PFIC annual information statement, in order to enable the U.S. Holder to
make and maintain a QEF election. However, there is no assurance that we will have timely knowledge of our status as a PFIC in the future
or of the required information to be provided.
113
If
a U.S. Holder has made a QEF election with respect to our Ordinary Shares, and the special tax and interest charge rules do not apply
to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to
hold) such shares), any gain recognized on the appreciation of our Ordinary Shares generally will be taxable as capital gain and no interest
charge will be imposed. As discussed above, U.S. Holders of a QEF are currently taxed on their pro rata shares of a PFIC's earnings
and profits, whether or not distributed. In such case, a subsequent distribution of such earnings and profits that were previously included
in income generally should not be taxable as a dividend to those U.S. Holders who made a QEF election. The tax basis of a U.S. Holder's
shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends,
under the above rules. Similar basis adjustments apply to property if by reason of holding such property the U.S. Holder is treated under
the applicable attribution rules as owning shares in a QEF.
Although
a determination as to our PFIC status will be made annually, an initial determination that our company is a PFIC will generally apply
for subsequent years to a U.S. Holder who held Ordinary Shares while we were a PFIC, whether or not we meet the test for PFIC status
in those years. A U.S. Holder who makes the QEF election discussed above for our first taxable year as a PFIC in which the U.S. Holder
holds (or is deemed to hold) our Ordinary Shares, however, will not be subject to the PFIC tax and interest charge rules discussed above
in respect to such shares. In addition, such U.S. Holder will not be subject to the QEF inclusion regime with respect to such shares
for any taxable year of ours that ends within or with a taxable year of the U.S. Holder and in which we are not a PFIC. On the other
hand, if the QEF election is not effective for each of our taxable years in which we are a PFIC and the U.S. Holder holds (or is deemed
to hold) our Ordinary Shares, the PFIC rules discussed above will continue to apply to such shares unless the holder makes a purging
election, and pays the tax and interest charge with respect to the gain inherent in such shares attributable to the pre-QEF election
period.
Alternatively,
if a U.S. Holder, at the close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder may make
a mark-to-market election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election
for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) shares in us and for which we are
determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect to its Ordinary Shares.
Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its Ordinary
Shares at the end of its taxable year over the adjusted basis in its Ordinary Shares. The U.S. Holder also will be allowed to take an
ordinary loss in respect of the excess, if any, of the adjusted basis of its Ordinary Shares over the fair market value of its Ordinary
Shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market
election). The U.S. Holder's basis in its Ordinary Shares will be adjusted to reflect any such income or loss amounts, and any
further gain recognized on a sale or other taxable disposition of the Ordinary Shares will be treated as ordinary income.
The
mark-to-market election is available only for stock that is regularly traded on a national securities exchange that is registered with
the SEC, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a
legitimate and sound fair market value. U.S. Holders should consult their own tax advisors regarding the availability and tax consequences
of a mark-to-market election in respect to our Ordinary Shares under their particular circumstances.
If
we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own
a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described
above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC. Upon request, we will endeavor
to cause any lower-tier PFIC to provide to a U.S. Holder no later than 90 days after the request the information that may be required
to make or maintain a QEF election with respect to the lower-tier PFIC. However, there is no assurance that we will have timely knowledge
of the status of any such lower-tier PFIC or will be able to cause the lower-tier PFIC to provide the required information. U.S. Holders
are urged to consult their own tax advisors regarding the tax issues raised by lower-tier PFICs. If a U.S. Holder owns (or is deemed
to own) shares during any year in a PFIC, such holder may have to file an IRS Form 8621 (whether or not a QEF election or mark-to-market
election is made). The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various
factors in addition to those described above. Accordingly, U.S. Holders of our Ordinary Shares should consult their own tax advisors
concerning the application of the PFIC rules to our Ordinary Shares under their particular circumstances.
114
Tax
Consequences to Non-U.S. Holders of Ordinary Shares
Dividends
paid to a Non-U.S. Holder in respect to its Ordinary Shares generally will not be subject to U.S. federal income tax, unless the dividends
are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States (and, if required
by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United
States).
In
addition, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition
of our Ordinary Shares, unless such gain is effectively connected with its conduct of a trade or business in the United States (and,
if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains
in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable
year of sale or other disposition and certain other conditions are met (in which case, such gain from United States sources generally
is subject to tax at a 30% rate or a lower applicable tax treaty rate).
Dividends
and gains that are effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States (and, if
required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally
will be subject to tax in the same manner as for a U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal
income tax purposes, may also be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.
Backup
Withholding and Information Reporting
In
general, information reporting for U.S. federal income tax purposes should apply to distributions made on our Ordinary Shares within
the United States to a non-corporate U.S. Holder and to the proceeds from sales and other dispositions of our Ordinary Shares by a non-corporate
U.S. Holder to or through a U.S. office of a broker. Payments made (and sales and other dispositions effected at an office) outside the
United States will be subject to information reporting in limited circumstances. In addition, backup withholding of United States federal
income tax, currently at a rate of 24%, generally will apply to dividends paid on our Ordinary Shares to a non-corporate U.S. Holder
and the proceeds from sales and other dispositions of shares by a non-corporate U.S. Holder, in each case who (a) fails to provide an
accurate taxpayer identification number; (b) is notified by the IRS that backup withholding is required; or (c) in certain circumstances,
fails to comply with applicable certification requirements. A Non-U.S. Holder generally may eliminate the requirement for information
reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable
IRS Form W-8 or by otherwise establishing an exemption.
Backup
withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder's
or a Non-U.S. Holder's U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required
information is timely furnished to the IRS. Holders are urged to consult their own tax advisors regarding the application of backup withholding
and the availability of and procedure for obtaining an exemption from backup withholding in their particular circumstances.
Individual
U.S. Holders may be required to report ownership of our Ordinary Shares and certain related information on their individual federal income
tax returns in certain circumstances. Generally, this reporting requirement will apply if (1) the Ordinary Shares are held in an account
of the individual U.S. Holder maintained with a "foreign financial institution"; or (2) the Ordinary Shares are not held
in an account maintained with a "financial institution," as such terms are defined in the Code. The reporting obligation
will not apply to an individual, however, unless the total aggregate value of the individual's foreign financial assets exceeds
US$50,000 during a taxable year. For avoidance of doubt, this reporting requirement should not apply to Ordinary Shares held in an account
with a U.S. brokerage firm. Failure to comply with this reporting requirement, if it applies, will result in substantial penalties. In
certain circumstances, additional tax and other reporting requirements may apply, and U.S. Holders of our Ordinary Shares are advised
to consult with their own tax advisors concerning all such reporting requirements.
115
F.
Dividends and Paying Agents
Not
applicable.
G.
Statement by Experts
Not
applicable.
H.
Documents on Display
We
have previously filed the Registration Statement with the SEC.
Documents
concerning us that are referred to in this document may be inspected at c/o Advanced Business Park, 9th Fl, Bldg C2, 29 Lanwan Lane,
Hightech District, Zhuhai, Guangdong 519080, China. In addition, we file annual reports and other information with the Securities and
Exchange Commission. We file annual reports on Form 20-F and submit other information under cover of Form 6-K. As a foreign private issuer,
we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers, directors and principal shareholders are
exempt from the insider short-swing disclosure and profit recovery rules of Section 16 of the Exchange Act. Annual reports and other
information we file with the Commission may be inspected at the public reference facilities maintained by the Commission at Room 1024,
100 F. Street, N.E., Washington, D.C. 20549, and copies of all or any part thereof may be obtained from such offices upon payment of
the prescribed fees. You may call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms
and you can request copies of the documents upon payment of a duplicating fee, by writing to the Commission. In addition, the Commission
maintains a web site that contains reports and other information regarding registrants (including us) that file electronically with the
Commission which can be assessed at http://www.sec.gov.
I.
Subsidiary Information
For
a listing of our subsidiaries, see "Item 4. Information on the Company — A. History and Development of the Company".
Item
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest
Rate Risk
Our
exposure to interest rate risk primarily relates to interest income generated by excess cash, which is mostly held in interest-bearing
bank deposits. While interest-earning instruments carry a degree of interest rate risk, we have not been exposed, nor do we anticipate
being exposed, to material risks due to changes in market interest rates.
Foreign
Currency Risk
A
majority of the Company's expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries'
assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange
transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's
Bank of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC
or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.
Our
functional currency is the RMB, and our financial statements are presented in U.S. dollars. The RMB appreciated by 6.3% in fiscal year
2020, further appreciated by 2.3% in fiscal year 2021 and depreciated by 8.2% in fiscal year 2022. It is difficult to predict how market
forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in
the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect
to any underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated
in RMB.
To
the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes,
appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion.
Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisitions
or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount
available to the Company.
Inflation
Since
our inception, inflation in China has not materially affected our results of operations. According to the National Bureau of Statistics
of China, the year-over-year percent changes in the consumer price index for December 2020, 2021 and 2022 increased 2.6%, 1.5% and 2.0%,
respectively. Although we have not been materially affected by inflation in the past, we may be affected if China experiences higher
rates of inflation in the future.
Item
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
With
the exception of Items 12.D.3 and 12.D.4, this Item 12 is not applicable for annual reports on Form 20-F. As to Items 12.D.3 and 12.D.4,
this Item 12 is not applicable, as the Company does not have any American Depositary Shares.
116
Part
II
Item
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
Item
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
See
"Item 10. Additional Information" 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, in relation to our initial public offering
of 2,012,500 Ordinary Shares (including the full exercise of the over-allotment option by the underwriters to purchase an additional
262,500 Ordinary Shares on May 10, 2019). The Ordinary Shares were sold at an offering price of $5.00 per share, generating gross proceeds
of approximately $10.06 million, and net proceeds of approximately $8.0 million. The registration statement relating to the IPO also
covered the underwriters' common stock purchase warrants and the Ordinary Shares issuable upon the exercise thereof in the total
amount of 122,500 Ordinary Shares.
Item
15. CONTROLS AND PROCEDURES
(a)
Disclosure Controls and Procedures
Under
the supervision and with the participation of our management, including our chief executive officer and our chief financial officer,
we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the
Exchange Act, as of December 31, 2022. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures
as of December 31, 2022 were not effective at the reasonable assurance level due to the material weakness described below.
In
connection with the audit of our financial statements for the years ended December 31, 2022, 2021 and 2020, we and our independent registered
public accounting firms identified material weakness in our internal control over financial reporting, as defined in the standards
established by the Public Company Accounting Oversight Board of the United States. The material weakness identified consisted of (i)
a lack of accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements; (ii)
a lack of sufficient documented financial closing policies and procedures, specifically those related to period-end expenses cut-off
and accruals; (iii) inadequate controls with respect to the maintenance of sufficient documentation for, and the evaluation of the accounting
implications of, significant and non-routine payment transactions; and (iv) a lack of sufficient documented financial closing policies
and procedures, specifically those related to period-end expenses cut-off and accruals; as defined in the standards established by the
Public Company Accounting Oversight Board of the United States.
We
have already taken some steps and have continued to implement measures to remediate the material weakness identified, including but not
limited to providing trainings to staff, changing to a new and well-established accounting system, and continue to monitor the internal
control over financial reporting. However, we cannot assure you that we will not identify additional material weaknesses or significant
deficiencies in the future. See "Item 3. Key Information—D. Risk Factors— 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".
Notwithstanding
there are material weaknesses identified as described above, we believe that our consolidated financial statements contained in this
Annual Report on Form 20-F fairly present our financial position, results of operations and cash flows for the years covered thereby
in all material respects.
117
(b)
Management's Annual Report on Internal Control over Financial Reporting Attestation Report of the Registered Public Accounting
Firm
Our
management made an annual assessment regarding our internal control over financial reporting. The material weaknesses identified by us
and our independent registered public accounting firm related to (i) a lack of accounting staff and resources with appropriate knowledge
of U.S. GAAP and SEC reporting and compliance requirements; (ii) a lack of sufficient documented financial closing policies and procedures,
specifically those related to period-end expenses cut-off and accruals; (iii) inadequate controls with respect to the maintenance of
sufficient documentation for, and the evaluation of the accounting implications of, significant and non-routine payment transactions;
and (iv) a lack of sufficient documented financial closing policies and procedures, specifically those related to period-end expenses
cut-off and accruals. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal
control under the Sarbanes-Oxley Act for purposes of identifying and reporting any weakness in our internal control over financial reporting.
Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting
firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.
Remediation
of Material Weaknesses
To
remediate our identified material weaknesses, we intend to adopt several measures to improve our internal control over financial reporting,
including (i) hiring more qualified accounting personnel, including a financial controller, with relevant U.S. GAAP and SEC reporting
experience and qualifications to strengthen the financial reporting function and setting up a financial and system control framework;
(ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial
reporting personnel; (iii) setting up an internal audit function as well as engaging an external consulting firm to assist us with assessment
of Sarbanes-Oxley compliance requirements and improvement of overall internal controls; (iv) preparing comprehensive accounting policies,
manuals and closing procedures to improve the quality and accuracy of our period-end financial closing process; (v) setting up and maintaining
a control process for the accounting implication assessment of all significant payment transactions, particularly those that are non-routine;
(vi) setting up and maintaining a control process for maintaining all supporting documentation regarding non-routine transactions; (vii)
updating the approval requirements for non-routine transactions to ensure that they match our transaction approval policies in place
on our other accounts; and (viii) partnering with third party service providers and a custodian bank to assist with borrower bank account
management.
We
believe that the actions we are taking, as listed above, will help remedy the material weaknesses referred to above, and help strengthen
our general internal controls and procedures over financial reporting. However, the process of designing and implementing an effective
financial reporting system represents a continuous effort that requires us to anticipate and react to changes in our business and the
economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to
satisfy our reporting obligations. While we have developed a remediation plan to address these material weaknesses, this remediation
plan or any additional plan we plan to implement may be insufficient to address our material weaknesses and additional material weaknesses
may be discovered in the future. We plan to continue to address and remediate additional control deficiencies we may identify during
our evaluation process in 2022. If we fail to implement and maintain an effective system of internal controls or fail to remediate the
material weaknesses in our internal control over financial reporting that have been identified, we may be unable to accurately report
our results of operations or prevent fraud or fail to meet our reporting obligations, and investor confidence and the market price of
our ordinary shares may be materially and adversely affected.
(c)
Attestation Report on Internal Control over Financial Reporting of the Registered Public Accounting Firm
This
Annual Report on Form 20-F does not include an attestation report on Internal Control over Financial Reporting of our independent registered
public accounting firm because we qualified as an "emerging growth company" as defined under the JOBS Act as of December
31, 2022.
(d)
Changes in Internal Control over Financial Reporting
Other
than those disclosed 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.
118
I
tem
16. RESERVED
Item
16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our
Board has determined that Wei Jiang is an audit committee financial expert as that term is defined in Item 16A(b) of Form 20-F, and "independent"
as that term is defined in the NASDAQ listing standards.
Item
16B. CODE OF ETHICS
Our
Board has adopted a code of business conduct and ethics that applies to our directors, officers and employees. A copy of this code is
available on our website: www.powerbridge.com.
Item
16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The
following table represents the approximate aggregate fees for services rendered by Onestop Assurance PAC and B F Borgers CPA PC for the
periods indicated:
December 31,
2022
December 31,
2021
December 31,
2020
Audit Fees
- Onestop Assurance PAC
$
213,100
$
171,000
$
220,000
- B F Borgers CPA PC
-
-
150,000
All Other Fees
-
-
Total Fees
$
213,100
$
171,000
$
370,000
"Audit-related
fees" are the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit
and are not reported under audit fees. These fees primarily include accounting consultations regarding the accounting treatment of matters
that occur in the regular course of business, implications of new accounting pronouncements and other accounting issues that occur from
time to time.
"Tax
fees" include fees for professional services rendered by our independent registered public accounting firm for tax compliance and
tax advice on actual or contemplated transactions.
"Other
fees" include fees for services rendered by our independent registered public accounting firm with respect to government incentives
and other matters.
The
policy of our audit committee is to pre-approve all audit and non-audit services provided by our independent auditor including audit
services, audit-related services, tax services and other services.
Our
Audit Committee evaluated and approved in advance the scope and cost of the engagement of an auditor before the auditor rendered its
audit and non-audit services.
119
Item
16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
As
described under Item 16G, we have relied on and intend to continue relying on home country practice, our Audit Committee consists of
two members (both of whom are independent directors) instead of three members as required under NASDAQ listing rules. Other than above,
we have not asked for, nor have we been granted, an exemption from the applicable listing standards for our Audit Committee.
Item
16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not
applicable.
Item
16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not
applicable.
Item
16G. CORPORATE GOVERNANCE
As
a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq listing standards. However, the Nasdaq
Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. We have
utilized the exemption afforded by Nasdaq Listing Rule 5615(a)(3) to follow home country practice in lieu of certain requirements, including
(i) the independence requirements for compensation committee and nomination committee as provided in Nasdaq Listing Rule 5605(d) and
(e); (ii) the requirement that a majority of the Board must be independent as provided in Nasdaq Listing Rule 5615(b)(1); (iii) the requirement
to hold annual general meeting as provided in Nasdaq Listing Rule 5620(a); and (iv) the requirement to obtain shareholders' approval
prior to a plan or other equity compensation arrangement is established or materially amended as provided in Nasdaq Listing Rule 5635(c).
Our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq listing standards applicable to U.S.
domestic issuers given our reliance on the home country practice exception.
See
"Item 3. Key Information-D. Risk Factors-Risks Related to Our Corporate Structure - As an exempted company incorporated in the
Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly
from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully
with such corporate governance listing standards".
See
"Item 6. Directors, Senior Management and Employees" for more information.
Item
16H. MINE SAFETY DISCLOSURE
Not
applicable.
Item
16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not
applicable.
120
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 of Powerbridge Technologies Co., Ltd., and its subsidiaries are included at the end of this Annual
Report.
Item
19. EXHIBITS
EXHIBIT
INDEX
Exhibit
Exhibit
    title
3.1
Fourth Amended and Restated Memorandum and Articles of Association
(5)
4.1
Specimen Ordinary Share Certificate
(16)
4.2
Form of Underwriter Warrant
(4)
5.1
Opinion of Conyers Dill & Pearman LLP
10.1
2018 Stock Option Plan
(14)
10.2
2018 Amended Stock Option Plan
(15)
10.3
Form of Employment Agreement
(2)
10.4
Unofficial English Translation of Technical Development (Commission) Contract between Zhuhai Powerbridge Technology Co., Ltd and Wuhan New Port Management Committee dated as of July 21, 2017
(2)
10.5
Unofficial English Translation of Contract for the Public Tender Procurement Project for the Information Platform of Comprehensive Bonded Logistics Industry Construction Management Office of Wuhan Airport Economic Development Zone between Zhuhai Powerbridge Technology Co., Ltd and Comprehensive Bonded Logistics Industry Construction Management Office of Wuhan Airport Economic Development Zone dated as of December 13, 2016
(2)
10.6
Unofficial English Translation of Government Procurement Contract between Zhuhai Powerbridge Technology Co., Ltd and Chenzhou High-tech Investment Holding Co., Ltd dated as of September 22, 2017
(2)
10.7
Unofficial English Translation of Wuhan New Port Airport Comprehensive Bonded Zone (Yangluogang Park) Information Software and Integration Contract between Zhuhai Powerbridge Technology Co., Ltd and Wuhan New Port Yangluo Bonded Park Development Management Co., Ltd dated as of November 23, 2016
(2)
121
10.8
Unofficial English Translation of Technical Development (Commission) Contract between Zhuhai Powerbridge Technology Co., Ltd and Guangxi Nanning Dangdai Fengyun Investment Management Co., Ltd dated as of July 27, 2016
(2)
10.9
Unofficial English Translation of Government Procurement Contract among Department of Commerce of Guangxi Zhuang Autonomous Region, Zhuhai Powerbridge Technology Co., Ltd, and Beijing Xinchengtong Digital Technology Co., Ltd dated as of November 15, 2016
(2)
10.10
Unofficial English Translation of Government Procurement Contract between Department of Commerce of Guangxi Zhuang Autonomous Region and Zhuhai Powerbridge Technology Co., Ltd dated as of November 28, 2016
(2)
10.11
Unofficial English Translation of Government Procurement Contract of Guangxi Zhuang Autonomous Region between Department of Commerce of Guangxi Zhuang Autonomous Region and Zhuhai Powerbridge Technology Co., Ltd dated as of September 25, 2015
(2)
10.12
Unofficial English Translation of Purchasing Contract between Zhuhai Powerbridge Technology Co., Ltd and Cyberspace Great Wall Internet System Application (Wuhan) Co., Ltd dated as of August 16, 2017
(2)
10.13
Unofficial English Translation of Purchasing Contract between Zhuhai Powerbridge Technology Co., Ltd and Cyberspace Great Wall Internet System Application Co., Ltd dated as of December 18, 2016
(2)
10.14
Unofficial English Translation of Purchasing Contract between Zhuhai Powerbridge Technology Co., Ltd and Guangdong Aotong Technology Co., Ltd dated as of May 7, 2015
(2)
10.15
Unofficial English Translation of Purchasing Contract between Zhuhai Powerbridge Technology Co., Ltd and Hunan Jintong Technology Co., Ltd dated as of June 11, 2014
(2)
10.16
Independent Director Offer Letter between Powerbridge Technologies Co., Ltd. and Yuping Ouyang dated as of October 23, 2018
(2)
10.17
Independent Director Offer Letter between Powerbridge Technologies Co., Ltd. and Guoguan Wang dated as of October 22, 2018
(2)
10.18
Independent Director Offer Letter between Powerbridge Technologies Co., Ltd. and Bo Wu dated as of October 22, 2018
(2)
10.19
Director Offer Letter between Powerbridge Technologies Co., Ltd. and Stewart Lor dated as of October 23, 2018
(2)
10.21
Employment Agreement between Powerbridge Technologies Co., Ltd. and Stewart Lor dated as of August 18, 2018
(2)
122
10.22
Unofficial English Translation of Technology Development Agreement between Zhuhai Powerbridge Technologies Co., Ltd. and Project Department of Guiyang Gaimao Railway Port Construction (Phase I project) of No.3 Engineering Company of China Railway No.8 Engineering Group Co., Ltd. dated as of September 1, 2019
(6)
10.23
Unofficial English Translation of Sales Agreement between Zhuhai Powerbridge Technologies Co., Ltd. and Wuhan Borui Int Technology Co., LTD. dated as of June 28, 2019
(6)
10.24
Form of Securities Purchase Agreement
(7)
10.25
Form of Securities Purchase Agreement
(8)
10.26
Form of Unsecured Convertible Promissory Note
(8)
10.29
Sales Agreement, dated February 23, 2021, by and between Powerbridge Technologies Co., Ltd. and A.G.P./Alliance Global Partners
(11)
10.30
Unofficial English Translation of Equity Transfer Agreement, dated January 6, 2022, by and between Powerbridge Technologies Co., Ltd. and the shareholder of SmartConn., Limited
10.31
Unofficial English Translation of
Equity Transfer Agreement, dated January 5, 2023, by and between Powerbridge Technologies Co., Ltd. and a shareholder of SmartConn., Limited
10.32
Unofficial English Translation of
Equity Transfer Agreement, dated June 24, 2022, by and between Powerbridge Technologies Co., Ltd. and Boxinrui International Holdings Limited
10.33
Securities
                                    Purchase Agreement, dated September 1, 2022, by and between Powerbridge Technologies Co., Ltd. and
                                    Streeterville Capital, LLC
(18)
10.34
Convertible Promissory Note issued by Powerbridge Technologies Co., Ltd to Streeterville Capital, LLC on September 1, 2022
(17)
10.35
Ordinary
    Share Purchase Agreement, dated September 1, 2022, by and between Powerbridge Technologies Co., Ltd. and White Lion Capital LLC
(19)
10.36
Standby
    Equity Purchase Agreement, dated September 9, 2022, by and between Powerbridge Technologies Co., Ltd. and YA II PN, Ltd.
(20)
10.37
Securities Purchase Agreement by and between Powerbridge Technologies Co., Ltd. and Uptown Capital, LLC dated as of January 8, 2021
(12)
10.38
Convertible Promissory Note dated January 8, 2021
(12)
10.39
Securities Purchase Agreement dated April 9, 2021 by and between the Company and the Investor
(13)
10.40
Form of Convertible Note
(13)
10.41
Form of Warrant
(13)
12.1*
Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.
12.2*
Certification of the Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.
13.1*
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2*
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
14.1
Code of Conduct and Ethics
(2)
15.1*
Consent of Audit Onestop Assurance PAC
21.1*
List of Subsidiaries of the Registrant
123
24.1*
Power of Attorney (included on signature page)
(1)
99.1
Charter of the Audit Committee
(2)
99.2
Charter of the Compensation Committee
(2)
99.3
Charter of the Nominating and Corporate Governance Committee
(2)
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)
(1)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Registration Statement on Form F-1 (File No. 333-229128)
    filed with the Securities and Exchange Commission on March 21, 2019
(2)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Registration Statement on Form F-1 (File No. 333-229128)
    filed with the Securities and Exchange Commission on January 4, 2019
(3)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Registration Statement on Form F-1 (File No. 333-229128)
    filed with the Securities and Exchange Commission on February 19, 2019.
(4)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Registration Statement on Form F-1 (File No. 333-229128)
    filed with the Securities and Exchange Commission on March 12, 2019.
(5)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on November 6, 2020.
(6)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 20-F filed with the Securities and Exchange
    Commission on June 24, 2020.
(7)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on August 28, 2020.
(8)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on September 8, 2020.
(9)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on October 6, 2020.
(10)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on November 25, 2020.
(11)
Previously
    filed; incorporated by reference to Exhibit 1.01 of the Company's Registration Statement on Form F-3 filed with the SEC on
    February 23, 2021.
(12)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on February 23, 2021.
(13)
Previously
    filed; incorporated by reference to the identically named exhibit filed with the Form 6-K filed with the Securities and Exchange
    Commission on April 9, 2021.
(14)
Previously
    filed, incorporated herein by reference to Exhibit 10.1 to the Company's Registration Statement on Form F-1 (File No. 333-229128)
    filed with the Commission on March 21, 2019.
(15)
Previously
    filed, incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 6-K filed with the Commission
    on July 2, 2020.
(16)
Previously filed, incorporated herein by reference to Exhibit
4.1 to the Company's Registration Statement on Form S-8 (File No.333-269513) filed with the Commission on February 1, 2023.
(17)
Previously filed, incorporated by reference to Exhibit 10.2
to the Company's Current Report on Form 6-K filed with the Commission on September 2, 2022.
(18)
Previously filed, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 6-K filed with the Commission on September
2, 2022.
(19)
Previously filed, incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 6-K filed with the Commission on September
9, 2022.
(20)
Previously filed, incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 6-K filed with the Commission on September
13, 2022.
*
Filed
    herewith
124
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.
Powerbridge
    Technologies Co., Ltd.
By:
/s/
    Stewart Lor
Name:
Stewart
    Lor
Title:
Chief
    Executive Officer
Dated:
April
28,
    2023
125
POWERBRIDGE TECHNOLOGIES CO., LTD.
CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firms
F-2
Consolidated Balance Sheets at December 31, 2022 and 2021
F-3
Consolidated Statements of Operations and Comprehensive (loss) Income for the Years Ended December 31, 2022, 2021 and 2020
F-4
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2022, 2021 and 2020
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-35
F-
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Shareholders of
POWERBRIDGE TECHNOLOGIES
CO., LTD.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Powerbridge Technologies Co., Ltd. (collectively the "Company") as of December 31, 2022 and 2021, the related
consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for the years ended December 31, 2022,
2021 and 2020, and the related notes to the consolidated financial statements and schedule (collectively the financial statements). In
our opinion, the financial statements present fairly, in all material respects, the financial positions of the Company as of December
31, 2022 and 2021, and the results of its operations and its cash flows for the years ended December 31, 2022, 2021 and 2020, in conformity
with accounting principles generally accepted in the United States of America.
Going Concern Matter
The preparation of the attached financial statements
assumes that the Company will continue to operate. As stated in Note 2 to the financial statements, for the year ended December 31, 2022,
the Company had working capital of approximately $59.5 million and incurred a net loss of approximately $21.5 million. For the year ended
December 31, 2022, the Company had negative operation cash flow of approximately $9.7 million. The Company has historically funded its
working capital needs primarily from public offering, operations, bank loans, advance payments from customers and shareholders. The management's
plan for these matters can be found in Note 2 to the financial statements. Nevertheless, the aforementioned conditions and events raise
substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments
that may arise due to the outcome of such uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with 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 audits to obtain reasonable assurance about whether the 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 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
OneStop Assurance PAC
We have served as the Company's auditor since 2021
Singapore
April 28, 2023
PCAOB Id#:
6732
F-
2
POWERBRIDGE TECHNOLOGIES CO., LTD.
CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
2022
2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalent
$
9,380,322
$
6,960,996
Restricted cash
-
95,252
Accounts receivable, net
14,814,583
24,217,737
Notes receivable
13,049
-
Due from related parties, net
2,140,593
1,496,093
Loan receivable
59,612,192
3,816,618
Prepayments, deposits and other current assets, net
1,447,752
2,035,412
Total Current Assets
87,408,491
38,622,108
Property and equipment, net
10,996,642
10,262,418
Prepayments, deposits and other assets, net
226,544
381,656
Long term investments
30,764,195
-
Loan receivable – long term
-
64,951,511
Right of use assets
211,585
-
Deferred tax assets
980,653
601,271
Total Assets
$
130,588,110
$
114,818,964
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Bank loans
$
2,609,755
$
4,393,811
Accounts payable
12,815,532
20,364,911
Accounts payable-related party
-
734,263
Convertible loans
9,079,966
2,251,832
Customer deposits
483,735
575,303
Deferred revenue
893,263
1,344,637
Loan from third party
-
470,765
Accrued expenses and other current liabilities
1,733,181
835,314
Due to related party
118,114
218,862
Taxes payable
110,843
730,924
Lease liabilities
91,587
-
Total Current Liabilities
27,935,976
31,920,622
Lease liabilities - non-current
101,992
-
Total Liabilities
28,037,968
31,920,622
COMMITMENTS AND CONTINGENCIES
EQUITY:
Ordinary shares,
0.00166667
par value;
300,000,000
shares authorized;
285,005,647
and
56,794,773
shares issued and outstanding as of December 31, 2022 and 2021
475,018
94,660
Additional Paid-in Capital
164,753,604
117,937,928
Accumulated deficit
(
59,081,432
)
(
37,575,834
)
Accumulated other comprehensive (loss) income
(
3,333,541
)
2,698,884
Total Powerbridge Technologies Co., Ltd.'s Shareholders' Equity
102,813,649
83,155,638
Non-controlling interest
(
263,507
)
(
257,296
)
Total Equity
102,550,142
82,898,342
Total Liabilities and Equity
$
130,588,110
$
114,818,964
The accompanying notes are an integral part of
these consolidated financial statements.
F-
3
POWERBRIDGE TECHNOLOGIES CO., LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
(LOSS) INCOME
For the Years Ended
December 31,
2022
2021
2020
REVENUES:
Application development services
$
3,847,199
$
20,323,422
$
21,985,214
Consulting and technical support services
2,538,500
4,555,352
3,797,354
Subscription services
758,526
936,913
881,443
Trading revenue
3,338,584
6,277,141
-
Total revenues
10,482,809
32,092,828
26,664,011
COST OF REVENUES
Cost of application development services
2,443,460
12,785,491
15,320,446
Cost of consulting and technical support services
983,700
2,198,310
1,803,239
Cost of subscription services
104,499
156,113
147,631
Cost of trading revenue
3,183,729
6,237,601
-
Total cost of revenues
6,715,388
21,377,515
17,271,316
GROSS PROFIT
3,767,421
10,715,313
9,392,695
OPERATING EXPENSES
Sales and marketing
1,956,811
2,775,526
2,675,028
General and administrative
7,732,287
6,004,186
5,559,426
Provision for doubtful accounts
4,733,183
1,100,606
191,148
Research and development
3,459,987
2,611,742
2,780,944
Share based compensation
5,983,907
6,335,246
1,473,976
Total operating expenses
23,866,175
18,827,306
12,680,522
OPERATING LOSS
(
20,098,754
)
(
8,111,993
)
(
3,287,827
)
OTHER INCOME (EXPENSE)
Other (expense) income
608
(
36,881
)
106,026
(Loss) gain from disposition of a subsidiary
(
1,009
)
714
-
Change in fair value of convertible debt
(
2,448,936
)
(
1,508,229
)
(
15,258,333
)
Total other expense
(
2,449,337
)
(
1,544,396
)
(
15,152,307
)
LOSS BEFORE INCOME TAXES
(
22,548,091
)
(
9,656,389
)
(
18,440,134
)
INCOME TAX BENEFIT
(
999,391
)
(
173,941
)
(
80,532
)
NET LOSS
(
21,548,700
)
(
9,482,448
)
(
18,359,602
)
Less: loss attributable to non-controlling interests
(
43,102
)
(
141,106
)
(
105,945
)
NET LOSS ATTRIBUTABLE TO POWERBRIDGE
(
21,505,598
)
(
9,341,342
)
(
18,253,657
)
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustment
(
6,012,211
)
1,880,131
809,672
COMPREHENSIVE LOSS
(
27,560,911
)
(
7,602,317
)
(
17,549,930
)
Less: comprehensive loss attributable to non-controlling interest
(
22,888
)
(
145,516
)
(
112,103
)
COMPREHENSIVE LOSS ATTRIBUTABLE TO POWERBRIDGE
$
(
27,538,023
)
$
(
7,456,801
)
$
(
17,437,827
)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES *
Basic and diluted
109,064,183
49,264,375
16,150,065
LOSS PER SHARE
Basic and diluted
$
(
0.20
)
$
(
0.19
)
$
(
1.13
)
The accompanying notes are an integral part of
these consolidated financial statements.
F-
4
POWERBRIDGE TECHNOLOGIES CO., LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Shares*
Amount
Additional
Paid-in
Capital
Retained
Earnings
(Accumulated
deficit)
Non-controlling
interest
Accumulated
other
comprehensive
income (loss)
Total
equity
Balance, December 31, 2019
8,967,748
$
14,946
$
15,878,438
$
(
9,980,835
)
$
(
15
)
$
(
1,487
)
$
5,911,047
Issuance of shares for private placement
8,800,000
14,667
17,585,333
-
-
-
17,600,000
Conversion of convertible note
27,777,776
46,297
65,212,036
-
-
-
65,258,333
Restricted shares issued for services
231,794
386
486,961
-
-
-
487,347
Options granted
-
-
986,629
-
-
-
986,629
Capital contribution by non-controlling shareholder
-
-
-
-
91
-
91
Net loss for the year
-
-
-
(
18,253,657
)
(
105,945
)
-
(
18,359,602
)
Foreign currency translation adjustment
-
-
-
-
(
6,158
)
815,830
809,672
Balance, December 31, 2020
45,777,318
$
76,296
$
100,149,397
$
(
28,234,492
)
$
(
112,027
)
$
814,343
$
72,693,517
Issuance shares at the market offering
1,626,327
2,711
5,125,766
-
-
-
5,128,477
Conversion of convertible loans
4,731,028
7,886
6,335,286
-
-
-
6,343,172
Issuance of shares for services
621,182
1,035
460,645
-
-
-
461,680
Options granted
-
-
5,873,566
-
-
-
5,873,566
Issuance of shares for options exercised
23,954
40
(
40
)
-
-
-
Issuance of reserve shares
4,014,964
6,692
(
6,692
)
-
-
-
-
Capital contribution by non-controlling shareholder
-
-
-
-
247
-
247
Net loss for the year
-
-
-
(
9,341,342
)
(
141,106
)
-
(
9,482,448
)
Foreign currency translation adjustment
-
-
-
-
(
4,410
)
1,884,541
1,880,131
Balance, December 31, 2021
56,794,773
$
94,660
$
117,937,928
$
(
37,575,834
)
$
(
257,296
)
$
2,698,884
$
82,898,342
Issuance shares at the market offering
56,800
95
56,354
-
-
-
56,449
Conversion of convertible loans
19,911,596
33,186
3,762,738
-
-
-
3,795,924
Issuance of shares for services
12,047,255
20,079
2,627,376
-
-
-
2,647,455
Options granted
-
3,336,452
-
-
-
3,336,452
Issuance of reserve shares
2,416,650
4,028
(
4,028
)
-
-
-
-
Issuance of shares for private placement
40,133,954
66,891
6,963,628
-
-
-
7,030,519
Issuance shares for investments
153,644,619
256,079
30,073,156
-
-
-
30,329,235
Disposition of a subsidiary
-
-
-
-
16,677
-
16,677
Net loss for the year
-
-
-
(
21,505,598
)
(
43,102
)
-
(
21,548,700
)
Foreign currency translation adjustment
-
-
-
-
20,214
(
6,032,425
)
(
6,012,211
)
Balance, December 31, 2022
285,005,647
$
475,018
$
164,753,604
$
(
59,081,432
)
$
(
263,507
)
$
(
3,333,541
)
$
102,550,142
The accompanying notes are an integral part of
these consolidated financial statements.
F-
5
POWERBRIDGE
TECHNOLOGIES CO., LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended
December 31,
2022
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(
21,548,700
)
$
(
9,482,448
)
$
(
18,359,602
)
Adjustments to reconcile net income from operations to net cash provided by (used in) operating activities:
Depreciation and amortization
2,163,197
2,016,719
1,451,572
Provision for doubtful accounts
4,733,183
1,100,606
191,148
Share based compensation
5,983,907
6,335,246
1,473,976
Loss from disposal of property and equipment
104,091
4,661
1,548
Deferred tax benefit
(
435,741
)
(
174,076
)
(
80,641
)
Change in fair value of convertible debt
2,448,936
1,508,229
15,258,333
Accrued interest of convertible debt
195,139
226,775
-
Loss (gain) from disposition of a subsidiary
1,009
(
714
)
-
Right of use assets amortization
45,381
-
-
Changes in assets and liabilities:
Notes receivable
(
13,375
)
-
217,259
Accounts receivable
2,980,772
(
10,459,509
)
(
2,004,618
)
Contract costs
-
4,088,073
(
795,174
)
Prepayments, deposits and other assets
581,031
(
70,480
)
(
1,196,470
)
Accounts payable
(
6,150,415
)
(
4,444,198
)
3,010,706
Accounts payable-related party
(
695,373
)
725,362
-
Accrued expenses and other current liabilities
999,500
(
1,359,673
)
860,110
Prepaid expense – related parties
-
-
813,038
Taxes payable
(
578,597
)
15,089
(
216,624
)
Deferred revenue
(
357,827
)
220,459
158,474
Customer deposits
(
49,006
)
(
11,507
)
268,706
Lease liabilities
(
63,837
)
-
-
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
(
9,656,725
)
(
9,761,386
)
1,051,741
CASH FLOWS FROM INVESTING ACTIVITIES:
Repayment from (loans to) third parties
4,039,454
1,653,246
(
64,281,291
)
Purchases of property and equipment
(
3,873,555
)
(
4,894,563
)
(
1,623,312
)
Proceeds from disposal of property and equipment
45,670
1,907
70
Paid for long -term investment
(
445,831
)
-
-
NET CASH USED IN INVESTING ACTIVITIES
(
234,262
)
(
3,239,410
)
(
65,904,533
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank loans
3,715,262
4,340,547
6,517,739
Repayments of bank loans
(
5,201,367
)
(
4,650,586
)
(
3,765,757
)
Proceeds from private placement and market offering
7,027,254
5,128,477
17,600,000
Proceeds from issuance of convertible note
7,979,983
6,860,000
50,000,000
Payments to related parties
(
671,868
)
(
681,473
)
(
308,284
)
(Repayment to) loan from third party
(
445,831
)
465,059
-
Capital contribution by non-controlling shareholder
-
247
91
NET CASH PROVIDE BY FINANCING ACTIVITIES
12,403,433
11,462,271
70,043,789
EFFECT OF EXCHANGE RATE CHANGES
(
188,372
)
205,069
(
2,745,717
)
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH
2,324,074
(
1,333,456
)
2,445,280
CASH AND RESTRICTED CASH - beginning of year
7,056,248
8,389,704
5,944,424
CASH AND RESTRICTED CASH - end of year
$
9,380,322
$
7,056,248
$
8,389,704
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest
$
203,380
$
211,197
$
203,289
Income taxes
$
718
$
3,836
$
15,706
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES
Right of use assets obtained in exchange of lease liabilities
$
262,255
$
-
$
-
Conversion of convertible loans
$
3,795,924
$
6,343,172
$
-
Issuance shares for third party receivable
$
59,714
$
-
$
-
RECONCILIATION TO AMOUNTS ON CONSOLIDATED BALANCE SHEETS:
Cash
$
9,380,322
$
6,960,996
$
8,389,704
Restricted cash
-
95,252
-
Total cash and restricted cash
$
9,380,322
$
7,056,248
$
8,389,704
The accompanying notes are an integral part of
these consolidated financial statements.
F-
6
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Nature of business and organization
Powerbridge Technologies Co.,
Ltd. ("Powerbridge" or the "Company"), is a company that was established under the laws of the Cayman Islands
on July 27, 2018 as a holding company. The Company, through its subsidiaries (collectively the "Company"), is a provider of
software application and technology services to corporate and government customers engaged in global trade. Mr. Stewart Lor, the Company's
Chairman of the Board and Chief Executive Officer ("CEO"), together with his brother, Mr. Ban Lor, are the ultimate Controlling
Shareholders of the Company.
Initial Public Offering
On April 4, 2019, the Company
consummated its initial public offering ("IPO") of
2,012,500
Ordinary Shares at a price of $
5.00
per shares including the
exercise in full of the underwriters' over-allotment option of
262,500
ordinary shares at IPO price of $
5.00
per share. The gross proceeds
from the IPO were $
10,062,500
and the net proceeds was $
8,021,987
. As a result of the IPO, the Ordinary Shares now trade on the Nasdaq
Capital Market under the symbol "PBTS."
COVID-19
The COVID-19 pandemic has
caused disruptions to our operations starting in December 2019. During the first quarter of 2020, our operations were closed in February
due to China government mandates and we moved quickly to transition our colleague base to a fully remote working environment in all our
locations. At the beginning of March 2020, substantially all of our employee were back to work in our offices. The ongoing COVID-19 pandemic
not only adversely impacted our operations but business of our customers. We experienced delayed customer payments and rescheduled customer
orders, which adversely impacts the Company's results of operations, cash flows and financial position. During 2022, our business
continued to be adversely impacted by the COVID-19 pandemic. Specifically, a new COVID-19 subvariant (Omicron) outbreak hit China in March
2022, spreading more quickly and easily than previous strains. As a result, a new round of lockdowns, quarantines, or travel restrictions
has been imposed upon different provinces or cities in China by the relevant local government authorities. The lockdowns and quarantines
delayed our existing project progress and adversely impacted our revenue. Meanwhile, the government had to cut back on fixed assets investment
due to large public health expenditures, which in turn reduced new project gaining and had adverse impact on revenue. On December 7,
2022, China announced 10 new rules that constitute a relaxation of almost all of its stringent COVID-19 pandemic control measures.
Shortly after their announcement, additional mobility restrictions issued by local governments were also scrapped. While such measures
effectively reopened business within China, COVID-19's continued existence may have significant and still not well-understood impacts
on our industry.
The extent of the impact on
our future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence
of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy
and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. The Company continues taking actions
to help mitigate, as best we can, the impact of the COVID-19 pandemic on the health and well-being of our employees, the communities in
which we operate and our partners, as well as the impact on our operations and business as a whole.
Reorganization
A reorganization of the Company's
legal structure was completed on August 27, 2018. The reorganization involved the incorporation of Powerbridge, a Cayman Islands holding
company, and its wholly owned subsidiaries, Powerbridge Holdings Co., Limited ("Powerbridge HK"), a holding company incorporated
on July 27, 2018 under the laws of Hong Kong; and the transfer of all equity ownership of Powerbridge Technology Group Co., Ltd. ("Powerbridge
Zhuhai") to Powerbridge HK from the former shareholders of Powerbridge Zhuhai through an investment holding company. In consideration
of the transfer, the Company issued
11,508,747
shares of the Company with par value
0.001
per share to the former shareholders of Powerbridge
Zhuhai. On February 10, 2019,
the board of directors approved a reverse stock split of the Company's authorized number of Ordinary
Shares at a ratio of 1-0.6.
After the reverse stock split, the Company's authorized number of Ordinary Shares was
300,000,000
shares
with par value of $
0.00166667
per share and
6,905,248
shares were issued and outstanding immediately after the reverse stock split. The
Company has retroactively adjusted all shares and per share data for all the periods presented.
Prior to the reorganization,
Powerbridge Zhuhai's equity interests were held by the former shareholders through an investment holding company, of which the Controlling
Shareholders owned
84.9
% of equity interest of Powerbridge Zhuhai. Powerbridge Zhuhai was incorporated on October 30, 1997 in Zhuhai,
Guangdong province under the laws of the People's Republic of China (the "PRC" or "China"). Powerbridge
Zhuhai is an operating subsidiary that provides global trade software application and technology services to corporate and government
customers located in the PRC. Beijing Powerbridge Technology Co., Ltd. ("Powerbridge Beijing"), a company conducting engineering
and IT research and development activities, was incorporated on September 28, 2017 in Beijing under the laws of PRC, with Powerbridge
Zhuhai owning
55
% and Mr. Tianfei Feng owning
45
% of equity interest. Since inception, Powerbridge Zhuhai and Mr. Tianfei Feng have only
made nominal investments in Powerbridge Beijing and no substantial business operations have occurred; as a result, Powerbridge Zhuhai
and Mr. Tianfei Feng agreed to deregister the entity. Mr. Tianfei Feng later became the Company's Chief Research and Development
Officer and the technology research and development activities originally conducted in Powerbridge Beijing are now conducted through the
Beijing branch of Powerbridge Zhuhai. Powerbridge Beijing was deregistered on October 25, 2018.
On August 7, 2018, the former
shareholders transferred their
100
% ownership interest in Powerbridge Zhuhai to Powerbridge HK, which is
100
% owned by Powerbridge. After
the reorganization, Powerbridge owns
100
% equity interests of Powerbridge HK and Powerbridge Zhuhai. All shareholders have the same ownership
interest in Powerbridge as in Powerbridge Zhuhai prior to the reorganization.
F-
7
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Nature of business and organization
(continued)
Reorganization - continued
Since the Company and its
subsidiaries are effectively controlled by the same group of the shareholders before and after the reorganization, they are considered
under common control. The above-mentioned transactions were accounted for as a recapitalization. The consolidation of the Company and
its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become
effective as of the beginning of the first period presented in the consolidated financial statements.
As of December 31, 2022, the
details of the Company's principal subsidiaries are as follows:
Major subsidiaries
Percentage of
Ownership
Date of
Incorporation
Place of
Incorporation
Major Operation
Powerbridge Holding Limited ("Powerbridge HK", formerly known as "Powerbridge Technologies Co., Limited.") (1)
100% by Powerbridge
July 27, 2018
Hong Kong, PRC
Investment holding
Hongding Technology Co., Ltd ("Hongding")
100% by Powerbridge
July 28, 2020
Hong Kong, PRC
Investment holding
Powercrypto Holding Pte. Ltd. ("Powercrypto")
100% by Powerbridge
October 1, 2021
Singapore
Management consultancy services
Powercrypto USA Inc.
100% by Powerbridge
April 5, 2022
USA
Management consultancy services
Powerbridge Technology Group Co., Ltd. ("Powerbridge Zhuhai")
100% by Powerbridge HK
October 30, 1997
the PRC
software application and technology services
Powerstream Supply Chain Co., Ltd. ("Powerstream")
100% by Powerbridge HK
August 17, 2021
the PRC
Supply chain business
Powermeta Digital Co., Ltd. ("Powermeta")
100% by Powerbridge HK
January 21, 2022
the PRC
software application and technology services
Powerstream Capital Co., Ltd. ("Powerstream Capital")
100% by Powerbridge HK
August 11, 2022
the PRC
Investment,software application and technology services
Shenzhen Hongding Interconnect Technology Co., Ltd.
100% by Hongding
October 21, 2020
the PRC
software application and technology services
Shenzhen Honghao Internet Technology Co., Ltd ("Honghao")
100% by Hongding
July 28, 2020
the PRC
software application and technology services
Wuhan Honggang Technology Co., Ltd ("Honggang")
60% by Powerbridge Zhuhai
June 21, 2019
the PRC
software application and technology services
Chongqing Powerbridge Zhixin Technology Co., Ltd ("Zhixin") (2)
45% by Powerbridge Zhuhai
September 2, 2019
the PRC
software application and technology services
Hongxi Data Technology Co., Ltd.
70% by Powerbridge Zhuhai
February 8, 2021
Macau
software application and technology services
Zhuhai Hongyang Supply Chain Co., Ltd. ("Zhuhai Hongyang")
60% by Powerbridge Zhuhai
July 21, 2021
the PRC
Supply chain business
Ningbo Zhijing Tongfu Technology Co., Ltd. ("Ningbo Zhijing")
(2)
51% by Powerbridge Zhuhai
April 25, 2021
the PRC
software application and technology services
Metafusion Digital Co., Ltd ("Metafusion")
66% by Powermeta Digital
February 15, 2022
the PRC
software application and technology services
(1)
On
November 29, 2022, Powerbridge Technologies Co., Ltd changed the name to Powerbridge Holding Limited.
(2)
Certain third-party shareholders of Zhixin signed consents with the Company for the year ended December 31, 2022, which stated that the Company has the power and control to direct the activities that most significantly impact Zhixin and they unconditionally vote by consensus with the Company in all the board decisions. As such, the Company consolidates the financial results of Zhixin based on the voting power.
F-
8
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
Basis of presentation
The accompanying consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.
GAAP") and pursuant to the rules and regulations of the Securities Exchange Commission ("SEC").
Principles of consolidation
The consolidated financial
statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances are eliminated
upon consolidation. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon
consolidation.
Subsidiaries are those entities
in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial
and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at
the meeting of directors.
Non-controlling interest represents
the portion of the net assets of a subsidiary attributable to interests that are not owned by the Company. The non-controlling interest
is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling
interest's operating result is presented on the face of the consolidated statements of income and comprehensive income as an allocation
of the total income for the year between non-controlling shareholders and the shareholders of the Company.
Liquidity
For the year ended December
31, 2022, the Company had working capital of approximately $
59.5
million and incurred a net loss of approximately $
21.5
million. For fiscal
2022, the Company had negative operation cash flow of approximately $
9.7
million. The Company has historically funded its working capital
needs primarily from public offering, operations, bank loans, advance payments from customers and shareholders. The working capital requirements
are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts, the progress or execution on
customer contracts, and the timing of accounts receivable collections.
In assessing its liquidity,
the Company monitors and analyzes its cash on hand, its ability to generate sufficient revenue sources in the future and its operating
and capital expenditure commitments. As of December 31, 2022, the Company had cash of approximately $
9.4
million.
On September 1, 2022,
the
Company entered into a securities purchase agreement with White Lion Capital LLC ("White Lion"). Pursuant to the agreement,
White Lion shall purchase up to $15 million of the Company's ordinary shares at the lowest daily VWAP of the Ordinary Shares during
the Valuation Period by 97%. As of December 31, 2022, the Company issued 22,875,000 ordinary shares and net proceeds was $3,519,202. In
2023, the Company issued 5,000,000 ordinary shares and net proceeds was $491,180
.
On September 9, 2022,
the
Company entered into a securities purchase agreement with YA II PN, LTD.. Pursuant to the agreement, YA II PN, LTD. shall purchase up
to $30 million of the Company's ordinary shares at the market price by 96%, and the company shall issue to YA II PN, LTD. 223,880
ordinary shares as a commitment fee. As of December 31, 2022, the Company issued 17,035,074 ordinary shares and net proceeds was $3,511,317.
The Company issued 223,880 ordinary shares for commitment fee on January 1, 2023. In 2023, the Company issued 26,235,245 ordinary shares
and net proceeds was $2,758,873
.
On November 29, 2022,
the
Company entered into a securities purchase agreement with TBS Capital LP, ("TBS"). Pursuant to the agreement, TBS shall purchase
up to $15 million of the Company's ordinary shares at the market price by 96%, and the company shall issue to Yorkville 223,880
ordinary shares as a commitment fee. The Company issued 223,880 ordinary shares for commitment fee on December 15, 2022. In 2023, the
Company issued 6,250,000 ordinary shares and net proceeds was $530,000.
The Company believes that
its cash on hand and financing cash flows will be sufficient to fund its operations over at least the next 12 months from the date of
this report. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions
or other developments, and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment,
acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company's
amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.
F-
9
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Use of estimates
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 but not limited to the useful lives of property and equipment and capitalized development cost,
impairment of long-lived assets, valuation of accounts receivables, valuation of convertible loans, loans to third parties, revenue recognition
and realization of deferred tax assets and uncertain tax positions. Actual results could differ from these estimates.
Foreign currency translation
The functional currencies
of the Company are the local currency of the county in which the subsidiaries operate. The Company's financial statements are reported
using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated
at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance
sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currencies
is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the
average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily
agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different
exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in
consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement
of operations and comprehensive income (loss).
Fair value measurement
ASC 825-10 requires certain
disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value
hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs
and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are 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 for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.
●
Level 3 — inputs to the valuation methodology are unobservable.
Unless otherwise disclosed,
the fair value of the Company's financial instruments including cash, notes and accounts receivable, due from related parties, prepayments,
deposits and other current assets, notes and accounts payable, customer deposits, salaries and benefits payables, due to related party
and taxes payable approximates their recorded values due to their short-term maturities. The fair value of the long-term prepayments,
deposits and other assets and loans to third parties approximate their carrying amounts because the deposits were paid in cash.
The Company elected the fair
value option to account for its convertible loan. The Company engaged an independent valuation firm to perform the valuation. The fair
value of the convertible loans is calculated using the binomial tree model. The convertible loans are classified as level 3 instruments
as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Company's
own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time
to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to
Note 11 for additional information.
F-
10
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
As the inputs used in developing
the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result
in a significant change in the fair value measurement.
The following is a reconciliation of the beginning and ending balances
for convertible notes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2022
and 2021:
December 31,
December 31,
2022
2021
Opening balance
$
2,251,832
$
-
Issuance of convertible note
7,979,983
6,860,000
Loss on change in fair value of convertible notes
2,448,936
1,508,229
Accrued interest
195,139
226,775
Conversion of convertible notes
(
3,795,924
)
(
6,343,172
)
Total
$
9,079,966
$
2,251,832
Cash and cash equivalent
Cash and cash equivalent comprise
cash at banks and on hand, which includes deposits with original maturities of three months or less with commercial banks in PRC. As of
December 31, 2022 and 2021, cash balances were $
9,380,322
and $
6,960,996
, respectively.
Restricted cash
Restricted cash mainly represents
security deposits as required by certain customers on the Company's projects. The deposits in restricted bank accounts cannot be
withdrawn until the Company completes the related projects. Restricted cash is classified as either current or non-current based on when
the funds will be released in accordance with the terms of the respective agreements. As of December 31, 2022 and 2021, restricted cash
consists of cash equivalents of $
nil
and $
95,252
used as collateral to secure the Company's projects. The Company is required to
keep certain amounts on deposit that are subject to withdrawal restrictions.
Accounts receivable, net
Accounts receivable, net,
is stated at the original invoiced amount net of write-offs and allowance for doubtful accounts. The Company reviews the accounts receivable
on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. Past-due balances over 90
days are reviewed individually for collectability. In evaluating the collectability of individual accounts receivable balances, the Company
considers several factors, including the age of the balance, the customer's payment history, current credit-worthiness, and current
economic trends. Accounts receivable balances are written off after all collection efforts have been exhausted. Typically, the Company
includes unbilled receivables in accounts receivable for contracts on which revenue has been recognized, but for which the customer has
not yet been billed. Unbilled receivables, substantially all of which are expected to be billed within one year are stated at their estimated
realizable value and consist of costs and fees billable on contract completion or the occurrence of contractual payment phase.
F-
11
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Prepayments, deposits and other assets, net
Prepayment, deposit and other
assets, net, primarily consists of advances to suppliers for purchasing goods or services that have not been received or provided; security
deposits made to our customers; advances to employees and loan receivables from business partners. Prepayment, deposit and other assets
are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are
reviewed periodically to determine whether their carrying value has become impaired.
Property and equipment, net
Property and equipment, net,
mainly comprise furniture and furniture, vehicles, compute, equipment and buildings are stated at cost less accumulated depreciation and
impairment. Property and equipment are depreciated over the estimated useful lives of the assets on a straight-line basis, after considering
the estimated residual value.
The estimated useful lives
are as follows:
Useful Life
Office equipment, fixtures and furniture
3
-
10
years
Automobiles
5
-
8
years
Capitalized development costs and software acquired
5
-
10
years
Computer equipment
5
years
Buildings
28
years
Expenditures for maintenance
and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major
renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and the related accumulated depreciation
of assets retired or sold are removed from the respective accounts, and any gain or loss is charged to the statement of income and comprehensive
income.
Capitalized development costs
The Company follows the provisions
of Accounting Standards Codification ("ASC") 985-20, "Costs of Software to be Sold, Leased, or Marketed." ASC
985-20 provides guidance on capitalization of the costs of software developed or obtained for sold, leased, or marketed. The Company expenses
all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred during the application development
stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if it is determined that these upgrades
or enhancements add additional functionality to the application. The capitalized development cost is amortized on a straight-line basis
over the estimated useful life, which is generally five years. Management evaluates the useful lives of these assets on an annual basis
and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
Impairment for long-lived assets
Long-lived assets, including
property, equipment, furniture and fixtures and intangible assets with finite lives are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying value of an asset may not be recoverable. When these events occur, the Company measures impairment
by comparing the carrying values of the long-lived assets to the estimated undiscounted future cash flows expected to result from the
use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amounts
of the assets, the Company would recognize an impairment loss based on the excess of the carrying value over the assessed discounted cash
flow amount. For the years ended December 31, 2022, 2021 and 2020 the Company recognized $
nil
impairment for the long-lived assets.
F-
12
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Long-term investments
Long-term investments are
primarily consisted of equity investments in privately held entities accounted for using the measurement alternative and equity investments
accounted for using the equity method. On January 1, 2022, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company started to record equity
investments at fair value, with gains and losses recorded through net earnings. And the Company elected to measure certain equity investments
without readily determinable fair value at cost, less impairments, plus or minus observable price changes and assess for impairment quarterly.
Equity investments without readily determinable fair values
After the adoption of this
new accounting standard, the Company elected to record equity investments without readily determinable fair values and not accounted for
under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report
changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity investment are
required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the
same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known.
Equity investments with readily determinable
fair values
Equity investments with readily
determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets
at the reporting date.
Equity investments accounted for using the
equity method
The Company accounts for its
equity investment over which it has significant influence but does not own a majority equity interest or otherwise control, using the
equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the
earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment
by considering factors including, but not limited to, current economic and market conditions, operating performance of the entity, including
current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly
for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates
and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment
is other-than-temporary.
Revenue recognition
The Company adopted ASC Topic
606 Revenue from Contracts with Customers ("ASC 606") on January 1, 2019 using the modified retrospective approach. Revenues
for the years ended December 31, 2022, 2021 and 2020 were presented under ASC 606. There is no adjustment to the opening balance of retained
earnings at January 1, 2019 since there was no change to the timing and pattern of revenue recognition upon adoption of ASC 606. Under
ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company's customers in an amount
of consideration to which an entity expects to be entitled to in exchange for those goods or services and is recorded net of value-added
tax ("VAT"). To achieve that core principle, the Group applies the following steps:
Step 1: Identify the contract
(s) with a customer
Step 2: Identify the performance
obligations in the contract
Step 3: Determine the transaction
price
Step 4: Allocate the transaction
price to the performance obligations in the contract
Step 5: Recognize revenue
when (or as) the entity satisfies a performance obligation
The Company derives its revenues
from four sources: (1) revenue from application development services, (2) revenue from consulting and technical support services, (3)
revenue from subscription services. All of the Company's contracts with customer do not contain cancelable and refund-type provisions
and (4) trading revenue.
(1) Revenue from application
development service
The Company's application
development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning,
project design, application development and system integration based on customers' specific needs. These services also require significant
production and customization. Upon delivery of the services, customer acceptance is generally required. In the same contract, the Company
is generally required to provide post-contract customer support ("PCS') for a period from three months to three years ("PCS
period") after the customized application development services are delivered. The type of services for PCS clause is generally not
specified in the contracts or as stand-ready services on when-and-if-available basis. The unspecified PCS is stand-ready service on when-and-if-available
basis. It grants the customers on line and telephone access to technical support personnel during the term of the service. Specified PCS
includes specified service term in the contract such as training.
F-
13
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Revenue recognition - continued
The Company's application
development service revenues are generated primarily from contracts with PRC government or related agencies and state-owned enterprises.
The contracts contain negotiated billing terms which generally include multiple payment phases throughout the contract term and a significant
portion (
30
% -
50
%) of contract amount usually is billed upon the completion of the related projects. Pursuant to the contract terms,
the Company has enforceable right on payments for the work performed.
The Company sometimes provides
a warranty for its application development service contracts. The warranty period is typically 12-36 months upon the completion of the
application development service. In accordance with ASC 606-10-25-19, the Company believes the warranty provision in the contracts generally
represents service-type warranty, which is a distinct performance obligation and the Company also provides the similar service on standalone
basis and customers can benefit from the related service-type warranty service. For the service warranty component, the customer simultaneously
receives and consumes the benefits provided by the company performance over the warranty term, therefore, the service warranty is satisfied
over time. The revenue allocated to the service warranty is recognized over the warranty period.
The Company assesses that
application development service, PCS or specific service and service-type warranty service, if applicable, are distinct performance obligations
in the application development service contracts. The Company provides these services on standalone basis and customers are able to benefit
from each of the service on its own. In addition, the timing of delivery of these performance obligations can be separately identifiable
in the contracts. The transaction price is allocated to these identified performance obligations based on the relative standalone selling
prices. The transaction price allocated to PCS or unspecific service and service-type warranty, if applicable, on a straight-line method
over the contractual period. Revenue allocated to specified PCS is recognized as the related services are rendered. The transaction price
allocated to application development service is recognized over time as the Company's performance creates or enhances the project
controlled by the customer and the control is transferred continuously to our customers. The Company uses an input method based on cost
incurred as the Company believes that this method most accurately reflects the Company's progress toward satisfaction of the performance
obligation, which usually takes less than one year. Under this method, the transaction price allocated to application development service
is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance
obligations.
Incurred costs include all
direct material, labor and subcontract costs, and those indirect costs related to application development performance, such as indirect
labor, supplies, and tools. Cost-based input method requires the Company to make estimates of revenues and costs to complete the construction.
In making such estimates, significant judgment is required to evaluate assumptions related to the costs to complete the application development,
including materials, labor, and other system costs. The Company's estimates are based upon the professional knowledge and experience
of our engineers and project managers to assess the contract's schedule, performance, technical matters. The Company has adequate
cost history and estimating experience, and with respect to which management believes it can reasonably estimate total development costs.
If the estimated costs are greater than the related revenues, the Company recognizes the entire estimated loss in the period the loss
becomes known and can be reasonably estimated. Changes in estimates for application development services include but not limited to cost
forecast changes and change orders. The cumulative effect of changes in estimates is recorded in the period in which the revisions to
estimates are identified and the amounts can be reasonably estimated. To date, the Company has not incurred a material loss on any contracts.
However, as a policy, provisions for estimated losses on such engagements will be made during the period in which a loss becomes probable
and can be reasonably estimated. If contract modifications result in additional goods or services that are distinct from those transferred
before the modification, they are accounted for prospectively as if the Company entered into a new contract. If the goods or services
in the modification are not distinct from those in the original contract, sales and gross profit are adjusted using the cumulative catch-up
method for revisions in estimated total contract costs and contract values.
In certain application development
service arrangements, the Company sells and delivers IT equipment on standalone basis prior to the delivery of the services. In these
cases, the Company controls the IT equipment before they are transferred to the customer. The Company has the right to direct the suppliers
and control the goods or assets transferred to its customers. Thus, the Company considers it should recognize revenue as a principal in
the gross amount of consideration to which it is entitled in exchange for the IT equipment delivered. The Company assesses the sale of
equipment is separately identifiable from other promises in the contract and it is distinct performance obligation within the context
of the contract. Accordingly, the revenue from the related IT equipment based on its relative standalone selling price is recognized upon
customer acceptance after delivery.
(2) Revenue from consulting
and technical support services
Revenue from consulting and
technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional consulting
and technical support services over contract terms beginning on the commencement date of each contract, which is the date its service
is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract term, which
is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance obligation.
The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis as customers
receive and consume benefits of such services.
F-
14
POWERBRIDGE TECHNOLOGIES
CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Revenue recognition - continued
(3) Revenue from subscription
services
Revenue from subscription
services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications for a subscribed
period. The Company's monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers.
The subscription arrangements are considered service contracts because customers do not have the right to take possession of the software
and can only benefit from the software when provided the right to access the software. Accordingly, the subscription services contracts
typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line
basis or based on the actual usage as customers receive and consume benefits of such services.
(4) Trading revenue
The Company started trading
business (sales of consumables) for the year ended December 31, 2021 and recognized revenue at a point in time when control of such products
transfers to the customer, which generally occurs upon shipment or delivery depending on the terms of the contracts with the customer.
Product sale contracts typically include a single performance obligation and there are no rights of return. The transaction price is based
on the fixed contractual price with the customer. Billings to the customer for the sale of products occur at the time the products are
transferred to the customer. Revenue from trading business accounted for
31.8
% of the Company's revenue for the year ended December
31, 2022.
Revenue includes reimbursements
of travel and out-of-pocket expense, with equivalent amounts of expense recorded in cost of revenue. The Company reports revenues net
of value added tax ("VAT"). The Company's subsidiaries in PRC are subject to a
6
% to
13
% value added tax ("VAT")
and related surcharges on the revenues earned from providing services or products.
Practical Expedient and Exemptions
The Company does not disclose
the value of unsatisfied performance obligations within one year by applying the right to invoice practical expedient provided by ASC
606-10-55-18.
Contract costs
Contract costs include contract
acquisition costs and contract fulfillment costs which are all recorded within prepayments, deposits, and other assets in the consolidated
balance sheets.
Contract acquisition costs consist
of incremental costs incurred by the Company to originate contracts with customers. Contract acquisition costs, which generally include
costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental costs are expected to be recovered
over the contract period. All other costs incurred regardless of obtaining a contract are expensed as incurred. Contract acquisition costs
are amortized over the period the costs are expected to contribute directly or indirectly to future cash flows, which is generally over
the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs relate. Contract fulfillments
costs consist of costs incurred by the Company to fulfill a contract with a customer and are capitalized when the costs generate
or enhance resources that will be used in satisfying future performance obligations of the contract and the costs are expected to be recovered.
Capitalized contract fulfillment costs generally include contracted services, direct labor, materials, and allocable overhead directly
related to resources required to fulfill the contract. Contract fulfillment costs are recognized in cost of revenue during the period
that the related costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term,
on a basis consistent with the transfer of goods or services to the customer to which the costs are related. There were no contract fulfillment
cost and contract acquisition costs as of December 31, 2022 and 2021.
Contract balance
The accounts receivable includes
both unbilled accounts receivable and billed accounts receivable. The Company records unbilled accounts receivable for revenue that has
been recognized in advance of billing the customer, which is common for application development service contracts. The unbilled accounts
receivable represents the Company's right to consideration in exchange for the service that the Company has performed to the customer
before payment is due and the unbilled account receivable will be reclassified into billed accounts receivable when the Company has the
right to invoice. Contract liabilities are presented as customer deposits and deferred revenue on the consolidated balance sheet. Contract
liabilities relate to payments received in advance of completion of performance obligations under a contract. Contract liabilities are
recognized as revenue upon the completion of performance obligations. As of December 31, 2022 and 2021, the balance of customer deposits
amounted to $
483,735
and $
575,303
, respectively. As of December 31, 2022 and 2021 the balance of deferred revenue amounted to $
893,263
and $
1,344,637
, respectively.
F-
15
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Government subsidies
Government subsidies mainly
represent amounts granted by local government authorities as an incentive for companies to promote development of the local technology
industry. The Company receives government subsidies related to government sponsored projects, and records such government subsidies as
a liability when it is received. The Company records government subsidies as other income when there is no further performance obligation.
Advertising expenditures
Advertising expenditures are
expensed as incurred and such expenses were minimal for the periods presented. Advertising expenditures have been included as part of
selling and marketing expenses. For the years ended December 31, 2022, 2021 and 2020, the advertising expense amounted to $
25,373
, $
279,979
and
53,445
, respectively.
Operating leases
The Company adopted Topic 842
on January 1, 2022 using the modified retrospective transition approach. The Company has lease contracts for factory and office space
under operating leases. The Company determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use
assets on its consolidated balance sheets at lease commencement. The Company measures its lease liabilities based on the present value
of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental
borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease
payments over the term of the lease. The Company estimates its incremental borrowing rate based on an analysis of weighted average interest
rate of its own bank loans. The Company measures right-of-use assets based on the corresponding lease liability adjusted for payments
made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing
lease expense when the lessor makes the underlying asset available to the Company.
For leases with lease term
less than one year (short-term leases), the Company records operating lease expense in its consolidated statements of operations on a
straight-line basis over the lease term and record variable lease payments as incurred.
Income taxes
The Company accounts for current
income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences
exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets
to the amount expected to be realized.
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.
The amount recognized is the largest amount of tax benefit that is greater than
50
% likely 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 tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes
have been incurred during the years ended December 31, 2022, 2021 and 2020. All of the tax returns of the Company's subsidiary in
China remain subject to examination by the tax authorities for five years from the date of filing.
Value added tax
Revenue represents the invoiced
value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to
13
%, depending on the type of service provided.
Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities.
Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company's subsidiary
in China, have been and remain subject to examination by the tax authorities for five years from the date of filing.
F-
16
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Employee defined contribution plan
Full time employees of the
Company in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits,
medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations
require that the Company make contributions to the government for these benefits based on a certain percentage of the employee's
salaries. The Company has no legal obligation for the benefits beyond the contributions. The total amount was expensed as incurred.
Loss per share
The Company computes (loss)
earnings per share ("EPS") in accordance with ASC 260, "Earnings per Share". ASC 260 requires companies to present
basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted
EPS presents the dilutive effect on a per share basis of the potential Ordinary Shares (e.g., convertible securities, options and warrants)
as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential Ordinary Shares that have
an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted
EPS. For the years ended December 31, 2022, 2021 and 2020, since the company had a loss, basic and dilutive loss per share is the same.
Share-Based compensation
The Company accounts for share-based
awards to employees and nonemployees directors and consultants in accordance with the provisions of ASC 718, Compensation—Stock
Compensation, and under the recently issued guidance following FASB's pronouncement, ASU 2018-07, Compensation—Stock Compensation
(Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under ASC 718, and applicable updates adopted, for employee stock-based
awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense
with graded vesting on a straight-line basis over the requisite service period for the entire award. For the non-employee stock-based
awards, the fair value of the awards to non-employees are measured every reporting period based on the value of the Company's common
stock.
Comprehensive income (loss)
Comprehensive income (loss)
consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue,
expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders' equity but are excluded from net income.
Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S.
dollar as its functional currencies.
Statement of Cash Flows
In accordance with ASC 230,
"Statement of Cash Flows," cash flows from the Company's operations are formulated based upon the local currencies.
As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes
in the corresponding balances on the balance sheets.
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 and the specific facts and circumstances of each matter.
F-
17
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Segment reporting
The Company's chief
operating decision maker ("CODM") has been identified as its CEO, who reviews the consolidated results when making decisions
about allocating resources and assessing performance of the Company as a whole and hence, the Company has only one reportable segment.
The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company's long-lived assets
are substantially all located in the PRC and all of the Company's revenues are derived from the PRC. Therefore, no geographical
segments are presented.
Concentrations of Risks
(a)
Concentration of credit risk
Assets that potentially subject
the Company to significant concentration of credit risk primarily consist of cash, restricted cash, accounts receivable and other current
assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of December 31,
2022 and 2021, the aggregate amount of cash and restricted cash of $
5,418,450
and $
6,971,124
, respectively, were held at major financial
institutions in PRC, which the management believes are of high credit quality. On May 1, 2015, China's new Deposit Insurance
Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required
to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not
be effective in providing complete protection for the Group's accounts, as its aggregate deposits are much higher than the compensation
limit. However, the Group believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China
and the Group believes that those Chinese banks are financially sound based on public available information. The Company conducts credit
evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company establishes
an accounting policy for allowance for doubtful accounts on the individual customer's and supplier's financial condition,
credit history, and the current economic conditions.
(b)
Foreign currency risk
A majority of the Company's
expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities
are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required
by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank of China ("PBOC").
Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory
bodies which require certain supporting documentation in order to affect the remittance.
The Company's
functional currency is the RMB, and the Company's financial statements are presented in U.S. dollars. The RMB appreciated by
2.3
% in fiscal year 2021 and deprecation by
8.2
% in fiscal year 2022. It is difficult to predict how market forces or PRC or U.S.
government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB
relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any
underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated
in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other
business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive
from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for
dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a
negative effect on the U.S. dollar amount available to the Company.
F-
18
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 — Summary of significant accounting
policies
(continued)
Concentrations of Risks - continued
(c)
Significant customers
For the year ended December
31, 2022, one customer accounted for
31.8
% of the Company's total revenues. For the year ended December 31, 2021, one customer accounted
for
12.8
% of the Company's total revenues. For the year ended December 31, 2020, one customer accounted for
25.7
% of the Company's
total revenues. As of December 31, 2022 and 2021, no customer accounted for more than
10
% of the Company's accounts receivable.
(d)
Significant suppliers
For the year ended December
31, 2022, three suppliers accounted for
38.1
%,
14.8
% and
12.1
% of the Company's total purchases, respectively. For the year ended
December 31, 2021, one supplier accounted for
15.8
% of the Company's total purchases. For the year ended December 31, 2020, one
supplier accounted for
21.3
% of the Company's total purchases. As of December 31, 2022, one supplier accounted for
10.9
% of the
Company's total accounts payable. As of December 31, 2021, no supplier accounted for more than
10.0
% of the Company's total
accounts payable.
Recently issued accounting pronouncements
The Company considers the
applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards
that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended ("the JOBS Act"), the Company meets the definition
of an emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards,
which delays the adoption of these accounting standards until they would apply to private companies.
In February 2016, the FASB
issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet
for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative
disclosure requirements. In July 2018, the FASB issued updates to the lease standard making transition requirements less burdensome. The
update provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative
period presented in the company's financial statements. The new guidance requires the lessee to record operating leases on the balance
sheet with a right-of-use asset and corresponding liability for future payment obligations. FASB further issued ASU 2018-11 "Target
Improvement" and ASU 2018-20 "Narrow-scope Improvements for Lessors." In June 2020, the FASB issued ASU No. 2020-05,
"Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities" ("ASU
2020-05") in response to the ongoing impacts to businesses in response to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides
a limited deferral of the effective dates for implementing previously issued ASU 842 to give some relief to businesses and the difficulties
they are facing during the pandemic. ASU 2020-05 affects entities in the "all other" category and public Not-For-Profit entities
that have not gone into effect yet regarding ASU 2016-02, Leases (Topic 842). Entities in the "all other" category may defer
to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As an emerging
growth company, the Company adopted ASU 2016-02, Leases (Topic 842) on January 1, 2022.
In January 2020, the FASB issued
ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives
and Hedging (Topic 815) ("ASU 2020-01"), which is intended to clarify the interaction of the accounting for equity securities
under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward
contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company beginning January 1, 2021. The
adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
In October 2021, the FASB issued
ASU No. 2021-08, "'Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with
Customers" ("ASU 2021-08"). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and
contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent
recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with
customers not acquired in a business combination. The amendments are effective for the Company beginning after December 15, 2023, and
are applied prospectively to business combinations that occur after the effective date. The Company does not expect the adoption of ASU
2021-04 will have a material effect on the consolidated financial statements.
In November 2021, the FASB
issued Accounting Standards Update No 2021-10, Government Assistance (Topic 832) — Disclosures by Business Entities
about Government Assistance ("ASU 2021-10"). ASU 2021-10 requires additional disclosures regarding the nature of government
assistance, the related accounting policy used to account for assistance, the affected line items and applicable amounts within the consolidated
financial position and results of operations, and significant terms and conditions related to the assistance. Government assistance within
the scope of ASC 832 includes assistance that is administered by domestic, foreign, local, state, national governments, as well as departments,
independent agencies and intergovernmental organizations. The updated guidance increases transparency of government assistance including,
1) the type of assistance, 2) the entity's accounting for assistance, and 3) the effect of assistance on the entity's financial
statements. The new standard is effective for fiscal years beginning after December 15, 2021. The adoption of this guidance did not have
a material impact on the Company's consolidated financial statements.
Except for the above-mentioned
pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated financial position,
statements of operations and cash flows.
F-
19
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Accounts receivable, net
Accounts receivable, net,
consists of the following:
As of December 31,
2022
2021
Accounts receivable
$
21,895,260
$
26,825,337
Less: Allowance for doubtful accounts
(
7,080,677
)
(
2,607,600
)
Total accounts receivable, net
$
14,814,583
$
24,217,737
Unbilled accounts receivable
included in accounts receivable above amounted to $
10,027,584
and $
13,067,528
as of December 31, 2022 and 2021, respectively.
The unbilled
accounts receivables as of December 31, 2022 are expected to be billed within one year and collected over one year. The billed accounts
receivable is expected to be collected within one year.
As of March 28, 2023, approximately
$
1.6
million (or
7.3
%) of total accounts receivable as of December 31, 2022 was collected. It represented
12.5
% of billed accounts receivable
balance and
1.1
% of unbilled accounts receivable balance as of December 31, 2022 were subsequently collected, respectively.
Movement of allowance for
doubtful accounts is as follows:
As of December 31,
2022
2021
2020
Beginning balance
$
2,607,600
$
1,581,142
$
1,669,658
Provision for doubtful accounts
4,783,518
1,011,760
-
Recovery
-
-
(
189,286
)
Written-off
-
(
34,879
)
-
Foreign currency translation adjustments
(
310,441
)
49,577
100,770
Ending balance
$
7,080,677
$
2,607,600
$
1,581,142
Note 4 — Prepayments, deposits and other
assets, net
Prepayments, deposits and
other assets, net consisted of the following:
As of December 31,
2022
2021
Security deposits
(1)
$
216,446
$
381,813
Advances to suppliers
564,810
1,483,084
Advances to employees
141,249
317,725
Prepaid expense
976,788
360,074
Others
139,976
188,216
2,039,269
2,730,912
Less: Long term portion
(
226,544
)
(
381,656
)
Allowance for doubtful accounts
(
364,973
)
(
313,844
)
Prepayments, deposits and other assets – current portion
$
1,447,752
$
2,035,412
(1)
Security
deposits mainly represent contract fulfillment deposits required by customer for specific projects, rent deposits and etc.
Movement of allowance for
doubtful accounts is as follows:
As of December 31,
2022
2021
2020
Beginning balance
$
313,844
$
306,513
$
31,139
Provision for doubtful accounts
75,000
88,846
258,280
Written-off
-
(
88,846
)
-
Foreign currency translation adjustments
(
23,871
)
7,331
17,094
Ending balance
$
364,973
$
313,844
$
306,513
F-
20
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 — Loans to third parties
Loans to third parties consisted
of the following:
As of December 31,
2022
2021
Unsecured loan receivable from third parties
(1)
$
-
$
300,000
Guaranteed loan receivable from media business
(2)
59,612,192
68,468,129
59,612,192
68,768,129
Less: Long term portion
-
(
64,951,511
)
Prepayments, deposits and other assets – current portion
$
59,612,192
$
3,816,618
(1)
As of December 31,2021, the loan to third party (Yuxia Xu) amounted to $
300,000
with annual interest approximately
4.85
% upon maturity, unsecured and due on March 7, 2022. The interest rate raised to
10
% after March 7, 2021. Yuxia Xu was appointed CFO and Chief Operating Officer, with effect from May 1, 2022, so the loan balance as of December 31, 2022 was reclassified to due to related party.
(2)
Pursuant to the agreement with Shenzhen Kezhi Technology Co., Ltd.("Kezhi") on September 25, 2020 and a series of amendments entered during the period from September 25, 2020 to May 16, 2021, the Company intends to expand to media business through Kezhi. The Company originally planned to acquire certain media business assets from Kezhi, however, due to uncertainties in COVID-19, the Company and Kezhi ultimately reached into a final agreement ("Final agreement") on May 16, 2021. Pursuant to the Final agreement, the Company agreed to extend a working capital support loan to Kezhi in aggregated of $64,420,344 (RMB444,320,000) with expected annual returns over two years and coupon interest rate of 5%.
The company collected $
4,808,152
(RMB
33,162,788
) in fiscal year 2022. As of December 31, 2022, the outstanding balance was $
59,612,192
(RMB
411,157,212
).
On January 5, 2023, the Company, Kezhi, the guarantor and the guarantor's senior management Mr. Su Haoqing, entered into a debt extinguish agreement. Pursuant to the agreement, Mr. Su Haoqing settled the remaining RMB $
59,612,192
(RMB
411,157,212
) debt by rendering 20 antique art pieces. .The company is performing valuation for accounting recognition purposes by a third-party valuation company.
F-
21
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 6 — Long term investment
Equity
investments
accounted
for using the
equity
method(ii)
Cost method
investments
without
readily
determinable
fair value(i)
Total
Balance as of January 1, 2022
$
-
$
-
$
-
Additions
11,120,935
19,643,260
30,764,195
Balance as of December 31, 2021
$
11,120,935
$
19,643,260
$
30,764,195
(i)
During the year ended December 31, 2022, the Company invested $
434,960
(RMB
3.0
million) cash and issued
5,756,481
shares (equivalent to $
1,844,377
) for
5.0
% equity interest in Shenzhen Chenbao Information service Co., Ltd. ("Chenbao") in which the Company does not have significant influence and such investment does not have readily determinable fair values.
On January 20, 2022, the Company invested issued
17,138,305
shares (equivalent to $
8,305,222
) for
19.99
% equity interest in SamartConn CO., Limited ("SamartConn") in which the Company does not have significant influence and such investment does not have readily determinable fair values.
On November 1, 2022, the Company invested issued
55,506,750
shares (equivalent to $
9,058,701
) for
19
% equity interest in DTI Group Limited ("DTI") in which the Company does not have significant influence and such investment does not have readily determinable fair values.
On January 1, 2022, the Company gained
5
% equity interest in Guangzhou Xingsheng Information Technology Limited for $
0
consideration, in which the Company does not have significant influence and such investment does not have readily determinable fair values.
(ii)
On June 28, 2022, the Company invested issued
19,942,553
shares (equivalent to $
6,674,772
) for
15
% equity interest in Boxinrui International Holdings Limited ("Boxinrui") in which the Company does not have significant influence and such investment do not have readily determinable fair values. On December 28, 2022, the Company further issued
55,300,530
shares (equivalent to $
4,446,163
) for
20
% equity interest in Boxinrui International Holdings Limited. As a result, the Company considers it has significant influence on this investment based on its voting power.
Note 7 — Property and equipment, net
Property and equipment, net,
consist of the following:
As of December 31,
2022
2021
Computer equipment
$
380,055
$
544,972
Office equipment, fixtures and furniture
2,033,617
2,133,433
Capitalized development cost and software acquired
10,886,033
10,464,573
Automobiles
189,325
224,713
Buildings
4,715,189
-
Construction in Progress
-
2,656,120
Subtotal
18,204,219
16,023,811
Less: accumulated depreciation and amortization
(
7,207,577
)
(
5,761,393
)
Total
$
10,996,642
$
10,262,418
Depreciation and amortization
expense for the years ended December 31, 2022, 2021 and 2020 amounted to $
359,344
, $
324,367
and $
310,845
, respectively. The Company
capitalized development costs related to its core supporting modules of the global trade applications and solutions incurred during the
application development stage. The amortization expense for the years ended December 31, 2022, 2021 and 2020 totaled $
1,803,853
, $
1,692,352
and $
1,140,727
, respectively. As of December 31, 2022, buildings with net book value amounted to $
4,184,190
were pledged for obtaining
various of loans (See Note 9).
The estimated amortization
of capitalized development cost is as follows:
Twelve months ending December 31,
Estimated
amortization
expense
2023
$
1,740,480
2024
1,463,967
2025
971,331
2026
501,910
2027
192,039
Total
$
4,869,727
F-
22
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8 — Related party balances and transactions
Related party transactions and balances
Name of Related Party
Relationship to the Company
Guangzhou Jiatu Culture Media Co., Ltd. (formerly as Guangzhou Powerbridge Blockchain Co., Ltd.)
Company has significant influence over with this entity
Ban Lor
Shareholder of the Company
Stewart Lor
CEO
Yuxia Xu
CFO
Hong Yu
shareholder of Zhixin
Shanghai Stamp Technology Co., Ltd.
The Company owns equity interest
Ling Lor
Ban Lor's spouse
Hybridge Holding Limited
Shareholder of the Company
Guangodong Guangrui Network Technology Co., Ltd. (Guangdong Guangrui)
Company has significant influence over with this entity.
a
Due from related parties:
As of December 31,
2022
2021
Guangzhou Jiatu Culture Media Co., Ltd.
(1)
$
-
$
132,345
Shanghai Stamp Technology Co., Ltd.
(2)
172,811
-
Ling Lor
(2)
-
8,661
Ban Lor
(2)
37,638
706,148
Stewart Lor
(2)
1,566,478
781,284
Yuxia Xu
(2)
363,666
-
Subtotal
2,140,593
1,628,438
Less: allowance for doubtful accounts
-
(
132,345
)
Due from related parties, net
$
2,140,593
$
1,496,093
(1)
In 2020, the Company had consulting fee prepayment of $
132,345
to Guangzhou Jiatu Culture Media Co., Ltd. as of December 31, 2021, which the Company has significant influence over with.  Both parties negotiated to terminate the consulting service. The balance of $
132,345
as of December 31, 2021 was fully allowanced in 2021. From April to June 2022, Guangzhou Jiatu Culture Media Co., Ltd. continued to provide equivalent services, so the allowance was recovered.  On June 2, 2022, the Company's CFO sold the equity interest in Jiatu Culture Media Co., Ltd., so Jiatu Culture Media Co., Ltd. no longer considered as a related party.
(2)
From time to time, the Company advances funds to senior management for business purpose.
F-
23
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8 — Related party balances and transactions
(continued)
b
Due to related party:
As of December 31,
2022
2021
Hong Yu
(1)
$
118,114
$
108,990
Hybridge Holding Limited
(1)
-
109,872
Subtotal
$
118,114
$
218,862
(1)
The above balances represent unpaid loan and
expenses to these related parties.
c
Accounts payable-related party
As of December 31,
2022
2021
Guangzhou Guangrui
(1)
$
-
$
734,263
Subtotal
$
-
$
734,263
(1)
As the disposal of Shantou Hongrui in Febuary 2022, Guangzhou Guangrui was no longer considered as a related
party and the balance was reclassified to account payable.
d
Related party transactions
For the years ended
2022
2021
2020
Guangzhou Guangrui
(1)
Service fees
$
-
$
725,362
$
-
Guangzhou Jiatu Culture Media Co., Ltd.
(2)
Service fees
$
62,667
$
-
$
-
Stewart Lor
Interest income
$
117,569
$
-
$
-
Yuxia Xu
Interest income
$
22,802
$
-
$
-
Shanghai Stamp Technology Co., Ltd.
Interest income
$
1,771
$
-
$
-
(1)
As the disposal of Shantou Hongrui in Febuary 2022, Guangzhou
Guangrui was no longer considered as a related party.
(2)
On June 2, 2022, the Company's CFO sold the equity
interest in Jiatu Culture Media Co., Ltd., so Jiatu Culture Media Co., Ltd. no longer considered as a related party.
F-
24
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9 — Bank loans
Outstanding balance of short-term
bank loans consisted of the following:
December 31,
2022
December 31,
2021
Loan from Bank of Communication
$
2,174,796
$
1,569,218
Loan from Bank of China
434,959
470,765
Loan from Guangfa Bank
-
2,353,828
$
2,609,755
$
4,393,811
On November 4, 2021, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $
880,239
for a term of
one year
and at a fixed annual
interest rate of
4.5675
%. The bank loan was guaranteed by a third party. The loan was fully repaid upon maturity.
On November 11, 2021, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $
688,979
for a term of
one year
and at a fixed annual
interest rate of
4.5675
%. The bank loan was guaranteed by a third party. The loan was fully repaid upon maturity.
On January 28, 2022, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $
1,449,864
for a term of
one year
and at a fixed annual
interest rate of
4.70
%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and pledged approximately $
2.4
million
fixed assets as the collateral to secure the loan. The loan was fully repaid upon maturity subsequently.
On December 16, 2022, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $
724,932
for a term of
one year
and at a fixed annual
interest rate of
4.10
%. The bank loan was guaranteed by the Company's CEO and CEO's spouse.
On March 9, 2021, Powerbridge
Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $
470,765
for a term of
one year
and at a fixed annual interest
rate of
4.50
%. The bank loan was guaranteed by Mr. Ban Lor. The loan was fully repaid upon maturity.
On June 10, 2022, Powerbridge
Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $
724,932
for a term of
one year
and at a fixed annual interest
rate of
4.50
%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and pledged approximately $
1.8
million fixed assets
as the collateral to secure the loan. On December 30, 2022, the Company partially repaid $
289,973
in advance.
On July 15, 2022, Powerbridge
Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $
724,932
for a term of
one year
and at a fixed annual interest
rate of
4.50
%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and pledged approximately $
1.8
million fixed assets
as the collateral to secure the loan. On December 30, 2022, the Company fully repaid the loan in advance.
On March 10, 2021, Powerbridge
Zhuhai entered into a loan agreement with Guangfa Bank to obtain a loan of $
2,353,828
for a term of
one year
and at a fixed annual interest
rate of
5.3
%. The bank loan was guaranteed by Mr. Ban Lor and the company's account receivable of some programs was pledged to secure
the loan. The loan was fully repaid upon maturity.
For the years ended December
31, 2022, 2021 and 2020, interest expense was $
203,380
, $
211,197
and $
203,289
, respectively, with the weighted average interest rate of
5.1
%,
5.0
% and
4.7
%, respectively.
F-
25
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 — Lease
The Company
has several operating leases for offices. The Company's lease agreements do not contain any material residual value guarantees or
material restrictive covenants.
Effective
January 1, 2022, the Company adopted the new lease accounting standard using a modified retrospective transition method which allowed
the Company not to recast comparative periods presented in its consolidated financial statements. In addition, the Company elected the
package of practical expedients, which allowed the Company to not reassess whether any existing contracts contain a lease, to not reassess
historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected
the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company combines the lease and
non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of
operating lease ROU assets and corresponding operating lease liabilities as disclosed below and had no impact on accumulated deficit as
of January 1, 2022. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining
lease payments over the lease term.
Total lease
expense for the years ended December 31, 2022, 2021 and 2020 amounted to $
162,799
, $
307,497
and $
305,832
, respectively.
Supplemental balance sheet information
related to operating leases was as follows:
December 31,
2022
Right-of-use assets, net
$
211,585
Operating lease liabilities - current
91,587
Operating lease liabilities - non-current
101,992
Total operating lease liabilities
$
193,579
The weighted average remaining
lease terms and discount rates for all of operating leases were as follows as of December 31, 2022:
Remaining lease term and discount rate:
Weighted average remaining lease term (years)
2.4
years
Weighted average discount rate
5.0
%
The following is a schedule of
maturities of lease liabilities as of December 31, 2022:
Twelve months ending June 30,
RMB
2023
99,014
2024
76,601
2025
28,772
Total future minimum lease payments
204,387
Less: imputed interest
10,808
Present value of lease liabilities
193,579
F-
26
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11 — Convertible Notes
On April 9, 2021, the Company
entered into certain securities purchase agreement with YA II PN, LTD. ("YA"), pursuant to which the Investor purchases convertible
notes (the "Notes") in the principal amount of US$
7,000,000
, which shall be convertible into the Company's ordinary
shares par value $
0.00166667
per share, and a warrant to purchase
571,429
ordinary shares, for gross proceeds of approximately US$
6,790,000
.
The Notes have a conversion price of the lower of (i) US$3.675 per ordinary shares (the "Fixed Conversion Price"), or (ii)
90% of the lowest daily VWAP (Volume-Weighted Average Price) during the 10 consecutive trading days immediately preceding the conversion
date or other date of determination, but not lower than the floor price of US$1.50 per ordinary share. The principal will become due and
payable 12 months from the date of closing (the "Maturity Date") and bears an annual interest rate of 6% unless earlier converted
or redeemed by the Company. At any time before the Maturity Date, YA may convert the Notes at its option into ordinary shares at the conversion
price.
On August 7, 2021, the Company
entered into an amendment (the "Closing Statement") to the securities purchase agreement initially entered into with YA on
April 9, 2021 (the "Purchase Agreement"). Pursuant to the Purchase Agreement, YA agreed to purchase convertible notes (the
"Notes") in the aggregate principal amount of US$7,000,000 (the "Principal"), which shall be convertible into
the Company's ordinary shares par value $0.00166667 per share, and a warrant (the "Warrant") to purchase 571,429 Ordinary
Shares (the "Offering"), for gross proceeds of approximately US$6,790,000.
The first closing of the offer and sale of the
first Note (the "First Note") in the principal amount of $
4,000,000
was completed on April 9, 2021. Pursuant to the Closing
Statement, the Company and YA agreed that, among other thing, (i) the Principal shall be increased to US$
8,000,000
; (ii) the principal
amount of the second Note (the "Second Note") is reduced from $
3,000,000
to $
2,000,000
; the closing of the second Note in
the principal amount of $
2,000,000
was completed on August 9, 2021.
(iii) the number of ordinary shares to be issued pursuant to the Warrant
shall be increased from 571,429 to 653,061; and (iv) promptly after the Securities and Exchange Commission (the "SEC") declares
effective a registration statement to be filed by the Company pursuant to a registration rights agreement (the "Registration Rights
Agreement"), YA agrees to purchase the third Note (the "Third Note") in the principal amount of $2,000,000, which shall
have identical terms as those of the Second Note.
Except as expressly amended by the Closing Statement, the Second Note has essentially
identical terms to the First Note.
On September 1, 2022, the Company
entered into a securities purchase agreement with Streeterville Capital, LLC ("Streeterville"), pursuant to which the Company
issued the Investor an unsecured promissory note on September 1, 2022 in the original principal amount of $
8,640,000
(the "Note"),
convertible into ordinary shares, par value $
0.00166667
per share, of the Company, for $
8,000,000
in gross proceeds. The transaction contemplated
by the Purchase Agreement closed on September 1, 2022. The Note bears interest at a rate of
6
% per annum compounding daily. All outstanding
principal and accrued interest on the Note will become due and payable twelve months after the purchase price of the Note is delivered
by Purchaser to the Company (the "Purchase Price Date"). The Note includes an original issue discount of $
640,000
along with
$
20,000
for Streeterville's fees, costs and other transaction expenses incurred in connection with the purchase and sale of the
Note. The Company may prepay all or a portion of the Note at any time by paying
120
% of the outstanding balance elected for pre-payment.
F-
27
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11 — Convertible Notes
(continued)
Conversion of convertible notes
For the year ended December
31, 2022, YA delivered conversion notice for convertible notes in an aggregate of principle of $
2,000,000
to the Company and the Company
issued an aggregate of
5,929,838
ordinary shares, par value $
0.00166667
per share, of the Company, to YA. The fair value of the conversion
note was assessed at $
2,261,270
upon conversion based on the binomial model assessed by the independent valuation firm.
The Company has elected
to recognize the convertible note at fair value and therefore there was no further evaluation of embedded features for bifurcation.
The Company engaged third party valuation firm to perform the valuation of convertible note. The fair value of the convertible note is calculated using the binomial tree model based on probability of remaining as straight debt using discounted cash flow with
the following assumptions
February 9,
2022-May 25,
2022
Risk-free interest rate
0.53
-
0.91
%
Expected life
0.20
-
0.48
year
Discount rate
9.33
-
11.22
%
Expected volatility
80.48
-
143.72
%
Expected dividend yield
0
%
Fair value
$
2,261,270
For the year ended December
31, 2022, Streeterville delivered conversion notice for convertible notes in an aggregate of principle of $
1,250,310
to the Company and
the Company issued an aggregate of
13,981,758
ordinary shares, par value $
0.00166667
per share, of the Company, to Streeterville. The
fair value of the conversion note was assessed at $
1,534,654
upon conversion based on the binomial model assessed by the independent valuation
firm.
November 8,
2022-December
24, 2022
Risk-free interest rate
4.66
-
4.72
%
Expected life
0.70
-
0.83
year
Discount rate
1137
-
11.72
%
Expected volatility
99.91
-
103.93
%
Expected dividend yield
0
%
Fair value
$
1,534,654
The convertible notes are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by
little or no market activity and reflect the Group's own assumptions in measuring fair value. Significant inputs used in
developing the fair value of the convertible notes include time to maturity, risk-free interest rate, straight debt discount rate,
probability to convert and expected timing of conversion.
For the years ended December 31, 2022, 2021 and 2020, the Company recognized
a loss of change in fair value of convertible note of $
2,448,936
, $
1,508,229
and $
15,258,333
, respectively. Interest expense recognized
for these convertible notes for the years ended December 31, 2022, 2021 and 2020 were$
195,139
, $
226,775
and $
nil
, respectively.
F-
28
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 12 — Taxes
(a)
Income tax
Cayman Islands
Powerbridge was incorporated
in the Cayman Islands and is not subject to tax on income or capital gains under the laws of Cayman Islands. Additionally, the Cayman
Islands does not impose a withholding tax on payments of dividends to shareholders.
Hong Kong
Powerbridge HK is established
in Hong Kong. Under the Hong Kong tax laws, Powerbridge HK is exempted from income tax on its foreign-derived income and there are no
withholding taxes in Hong Kong on remittance of dividends.
PRC
Powerbridge Zhuhai is governed
by the Enterprise Income Tax ("EIT") laws of PRC. Under EIT laws of PRC, 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 exemption may be granted on case-by-case basis. EIT grants preferential tax treatment to certain High and New Technology Enterprises
("HNTEs"). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of
15
%, subject to a requirement
that they re-apply for HNTE status every three years. Powerbridge Zhuhai, the Company's operating subsidiary in PRC, has been approved
as HNTEs in 2014 and successfully renewed it in 2020, which reduced its statutory income tax rate to
15
%. The rest of the Company's
subsidiaries in PRC are subject to income tax rate of
25
%.
The impact of the preferred
tax treatment noted above decreased income taxes by $
662,675
, $
89,850
and $
25,735
for the fiscal years 2022, 2021 and 2020, respectively.
The benefit of the preferred tax treatment on net income per share (basic and diluted) was
nil
,
nil
and $
nil
for the years ended December
31, 2022, 2021 and 2020, respectively.
Significant components of
the provision for income taxes are as follows:
For the years ended December 31,
2022
2021
2020
Current
$
(
563,650
)
$
135
$
109
Deferred
(
435,741
)
(
174,076
)
(
80,641
)
Total income tax benefit
$
(
999,391
)
$
(
173,941
)
$
(
80,532
)
F-
29
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 12 — Taxes
(continued)
(a)
Income tax - continued
The following table reconciles
China statutory rates to the Company's effective tax rate:
For the years ended December 31,
2022
2021
2020
PRC statutory rates
25.0
25.0
%
25.0
%
Preferential tax rates
(
2.9
)
(
25.8
)%
(
25.0
)%
R&D credits
1.5
3.0
%
1.7
%
Change in valuation allowance and others
(
19.2
)
(
0.4
)%
(
1.3
)%
Effective tax rate
4.4
1.8
%
0.4
%
Deferred income taxes reflect
the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. The significant components of the deferred tax assets are as follows:
As of December 31,
2022
2021
Deferred tax assets:
Provision for doubtful accounts
$
1,260,557
$
455,343
Depreciation and amortization
162,980
145,928
Net operating loss carryforward
1,388,155
738,187
Valuation allowance
(
1,831,039
)
(
738,187
)
Total deferred tax assets
$
980,653
$
601,271
As of December 31, 2022,
the
Company has approximately $8.6 million net operating loss ("NOL") carryforwards with expirations by 2027
. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences
become deductible. Management considers the cumulative earnings and projected future taxable income in making this assessment. Recovery
of substantially all of the group's deferred tax assets is dependent upon the generation of future income, exclusive of reversing
taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods
in which the deferred tax assets are recoverable, management provided $
1,831,039
and $
738,187
valuation allowance against the deferred
tax assets that the Company does not expect to realize at December 31, 2022 and 2021, respectively.
(b)
Value added tax
Enterprises who sell goods
in the PRC are subject to a value added tax in accordance with PRC laws. VAT standard rates are
6
% to
13
% of the gross sales price. A
credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company's
finished products can be used to offset the VAT due on sales of the finished products and services. Powerbridge Zhuhai obtained a VAT
preferential status for its technology development business, accordingly, the certain Company's technology development business
is exempted from VAT.
F-
30
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 12 — Taxes
(continued)
(c)
Tax payable
Taxes payable consists of
the following:
As of December 31,
2022
2021
Income taxes payable
$
-
$
594,026
VAT and other tax payable
110,843
136,898
Totals
$
110,843
$
730,924
Uncertain tax positions
The Company may be subject
to challenges from various PRC taxing authorities regarding the amounts of taxes due, although the Company's management believes
the Company has paid or accrued for all taxes owed by the Company. As of December 31, 2022 and 2021, the Company had accrued (before adjustment)
total income tax liabilities of $
550,602
and $
594,026
, respectively. According to PRC taxation regulation and administrative practice
and procedures, the statute of limitation on tax authority's audit or examination of previously filed tax returns expires three
years from the date they were filed. The Company also obtained a written statement from the local tax authority that no additional taxes
are due as of December 31, 2022. Based on these facts, the Company reversed the accrued tax liabilities in the total amount of $
550,602
(or RMB
3,798,484
) relating to the tax liabilities accrued for the period from fiscal 2016 to fiscal 2018, resulting in the decrease of
accrued income tax liabilities from $
550,602
to $
nil
as of December 31, 2022.
The Company evaluates each
uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the
unrecognized benefits associated with the tax positions. As of December 31, 2022 and 2021, the Company did not have any significant unrecognized
uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the
years ended December 31, 2022,2021 and 2020. The Company also does not anticipate any significant increases or decreases in unrecognized
tax benefits in the next 12 months from December 31, 2022.
Note 13 — Equity
Ordinary Shares
Powerbridge was established
under the laws of Cayman Islands on July 27, 2018. The original authorized number of Ordinary Shares was
500,000,000
shares with a par
value of $
0.0001
per share.
On August 18, 2018, in order to optimize the Company's share capital structure, the board of directors
approved a reverse stock split of the Company's authorized number of Ordinary Shares at a ratio of 10-1.
After the reverse stock
split, the Company's authorized number of Ordinary Shares became
50,000,000
shares with par value of $
0.001
per share and
11,508,747
shares were issued on August 27, 2018 at par value to the original shareholders of Powerbridge Zhuhai, the equivalent to share capital
of $
11,509
. On February 10, 2019, the board of directors further approved a reverse stock split of the Company's authorized number
of Ordinary Shares at a ratio of 1-0.6. After the reverse stock split, the Company's authorized number of Ordinary Shares was
30,000,000
shares with par value of $
0.00166667
per share and
6,905,248
shares were issued and outstanding immediately after the reserve stock split.
The Company believes it is appropriate to reflect these share issuances as nominal share issuance on a retroactive basis similar to stock
split pursuant to ASC 260. The Company has retroactively adjusted all shares and per share data for all the periods presented.
On September 30, 2020, the
Company held its 2020 special general meeting of shareholders (the "Meeting"). At the Meeting, the Company's shareholders
approved the Company's amended and restated Memorandum and Articles of Association ("A&R M&A") to increase the
authorized share capital.
As a result, the Company's authorized share capital was $500,000 divided into 300,000,000 shares of a par
value of US$0.00166667 each, with an increase of an additional 270,000,000 shares of a par value of US$0.00166667 each.
On December 5, 2022, the
Company held its 2022 special general meeting of shareholders. At the Meeting, the Company's shareholders approved an
amendment to the Company's amended and restated Memorandum and Articles of Association ("A&R M&A") to
increase the authorized share capital. As a result, the Company's authorized share capital is $
16,666,700
divided into
10,000,000,000
shares of a par value of US$
0.00166667
each, with an increase of an additional
9,700,000,000
shares of a par value of
US$
0.00166667
each.
The Company had
285,005,647
and
56,794,773
ordinary shares issued and outstanding as of December 31, 2022 and 2021, respectively.
F-
31
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13 — Equity (
continued)
Ordinary Shares - continued
●
IPO
On April 4, 2019,
the Company
consummated its initial public offering ("IPO") of 2,012,500 Ordinary Shares at a price of $5.00 per shares including the
exercise in full of the underwriters' over-allotment option of 262,500 ordinary shares at IPO price of $5.00 per share. The gross proceeds
from the IPO were $10,062,500 and the net proceeds was $8,021,987. As a result of the IPO, the Ordinary Shares now trade on the Nasdaq
Capital Market under the symbol "PBTS."
●
Public Offering Warrants
In connection with the IPO
on April 4, 2019,
the Company issued warrants totaling 122,500 units to the placement agents (the "Public Offering Warrants").
The warrants carry a term of five years and shall be exercisable at $5.50 per share. Management determined that these warrants are equity
instruments because the warrants are both a) indexed to its own stock; and b) classified in shareholders' equity. The warrants were
recorded at their fair value on the date of grant as a component of shareholders' equity. No warrants were exercised for the year
ended December 31, 2020 and 2019. As of December 31, 2022 and 2021, the total number of warrants outstanding was 122,500 with weighted
average remaining life of 1.24 years and 2.25 years, respectively. No warrants were exercised as of December 31, 2022 and 2021. The fair
value of this Public Offering Warrants was $356,200, which was considered a direct cost of IPO and included in additional paid-in capital.
The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value
of underlying share of $5.00, risk free rate of 2.2%; expected term of 5 years; exercise price of the warrants of $5.5, volatility of
71.9%; and expected future dividends of nil.
●
Ordinary shares issued for consulting services
On September 30, 2019, the
Company entered into a marketing development service agreement with an external consultant for service term of three years and agreed
to
50,000
restricted shares as compensation. On November 28, 2019, the Company entered into a marketing development service agreement
with another external consultants for service term of three years and agreed to
57,540
restricted shares as compensation. The aggregated
fair value of those restricted shares was assessed at $
335,469
based on the stock price of contract dates. For the year ended December
31, 2019, the Company recorded a consulting fee expense of $
18,430
included in the share-based compensation expense. As of December 31,
2019, there were unrecognized share-based compensation expense related to the restricted shares issued for consulting services amounted
to $
317,039
. As of December 31, 2019, the Company issued
50,000
restricted shares and issued the remaining
57,450
restricted shares in
January 2020. For the year ended December 31, 2019, the aggregated of
107,540
restricted shares was included in the calculation of basic
earning per shares in accordance with ASC 260-10-45-13.
On March 15, 2020, the Company
signed a consulting agreement with an independent marketing professional with term of one year. Pursuant to the agreement, the Company
agreed to pay total of
150,000
ordinary shares as compensation for the services after signing of the agreement. The Company issued
150,000
restricted ordinary shares on April 14, 2020. The fair value of those shares was assessed at approximately $
332,100
based on the stock
price of contract date. On July 30, 2020, the Company issued
24,254
ordinary shares as compensation to an advisory firm for the related
investor relations advisory service during the period ended from January 2020 to July 2020. The fair value of those shares was assessed
at approximately $
65,001
based on the stock price of contract date. On September 26, 2020, the Company signed a consulting agreement with
a third-party consultant. Pursuant to the agreement, the Company agreed to pay a total of
100,000
ordinary shares as compensation for
new business segment strategic positioning and planning services. The Company has issued the above
100,000
shares as of December 31, 2021.
On August 17, 2020, the Company signed a consulting agreement with a third-party consultant. Pursuant to the agreement, the Company agreed
to pay a total of
10,000
ordinary shares as compensation for services. The Company has issued the above
10,000
shares as of December 31,
2022. On October 19, 2021, the Company issued
21,182
ordinary shares as compensation to an advisory firm for the related investor relations
advisory service. On May 18, 2022, the Company issued
37,255
ordinary shares as compensation to an advisory firm for the related investor
relations advisory service.
F-
32
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13 — Equity (
continued)
For the year ended December
31, 2022, 2021 and 2020, the Company recorded a consulting fee expense of $
649,122
, $
461,680
and $
487,347
included in the share-based
compensation expense. As of December 31, 2022 and 2021, there were unrecognized share-based compensation expense related to the restricted
shares issued for consulting services amounted to $
52,249
and $
689,807
.
●
Restricted share units ("RSUs") issued for consulting services
On June 16, 2022, the board
of directors proposed to modify the Company's Amended 2018 Stock Option Plan), by supplementing various clauses in relation to the
grant of Restricted Shares and Restricted Share Units to the employees, Directors and consultants of the Company.
On July 15, 2022 the Company
signed six consulting agreements with six third-party consultants with term of three years. Pursuant to the agreements, the Company agreed
to pay total of
12,000,000
RSUs (representing
1
ordinary shares of the Company, with par value US$
0.00166667
per share) as compensation
for the services after signing of the agreements. The Company issued
12,000,000
RSUs on July 22, 2022. The fair value of those shares
was assessed at $
13,080,000
based on the stock price of contract date. For the year ended December 31, 2022, the Company recorded a consulting
fee expense of $
1,998,333
included in the share-based compensation expense. As of December 31, 2022, there were unrecognized share-based
compensation expense related to RSUs issued for consulting services amounted to $
11,081,667
.
2018 Stock option plan
On August 18, 2018 and further
amended on February 10, 2019, the Board of Directors ("Board") approved an amended the 2018 Stock Option Plan (the "2018
Plan").  The Plan provides for discretionary grants of stock options to key employees, directors and consultants of the Company.
The purpose of the Plan is to attract and retain the best available personnel and to promote the success of the Company's business.
The Board authorized that the maximum aggregate number of ordinary shares reserved and available pursuant to this Plan shall be the aggregate
of (i) 1,035,787 shares, and (ii) on each January 1, starting with January 1, 2019, an additional number of shares equal to the lesser
of (A) 2% of the outstanding number of ordinary shares (on a fully-diluted basis) on the immediately preceding December 31, and (B) such
lower number of ordinary shares as may be determined by the Committee.
The Plan shall become effective on the effective date of the Company's
contemplated initial public offering is completed, which was on April 4, 2019. The grants under the Plan generally have a maximum contractual
term of
ten years
from the date of grant. Stock option awards granted under the plan at the determination of the Board shall be effective
and exercisable after the Company' completion of IPO of its securities. The terms of individual agreements for various grants under
the Plan will be determined by the Board (or its Compensation Committee) and might contain both service and performance conditions. The
Company believes the options contain an explicit service condition and a performance condition. On July 2, 2020, the Board approved to
amend the 2018 Plan to adjust that the maximum aggregate number of ordinary shares reserved and available pursuant to the 2018 Plan shall
not at any time exceed
20
% of the total number of outstanding Ordinary Shares at the time of issuance, from time to time. Such amendment
was approved during shareholders' annual meeting on July 27, 2020.
On April 4, 2019, the Board
approved to issue
1,050,500
stock options to its employees under 2018 stock option plan with exercise price of $
5.0
per share. These options
generally have vesting periods of
1
-
3
years and will expire no later than April 3, 2024. On January 29, 2022, the Board cancelled this
plan.
On April 4, 2019, the Board
approved to issue
300,000
stock options to an external consultant under 2018 stock option plan with exercise price of $
3.75
per share.
These options were fully vested upon grant and will expire no later than April 3, 2029.
On February 18, 2021, the consultant excised
58,110
shares options on a cashless basis. On February 6, 2021, the Company issued
23,954
ordinary shares to the consultant.
On May 26, 2021, the Board
approved to issue
7,604,964
stock options to its employees under 2018 stock option plan with exercise price of $
1.22
per share.
4,014,964
of these stock options were fully vested upon grant;
3
,590,000 of these stock options generally have vesting periods of
1
-3 years. The
options will expire no later than May 26, 2026. On January 26, 2022 the Board approved to amend the exercise price from $
1.22
to $
0.34
per share,
5,809,964
of these stock options were fully vested upon grant;
1,795,000
of these stock options was vested in
one year
after
grant. The Company recorded modification expense of $
2,139,555
. On May 16, 2022, the Board further approved to amend the exercise price
from $
0.34
to $
0.265
per share. The Company recorded modification expense of $
137,641
. On December 20, 2022, the Board further approved
to amend the exercise price from $
0.265
to $
0.084
per share. The Company recorded modification expense of $
206,461
.
The fair value of stock options
was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to
make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected
term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based
on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based
on the historical volatility of the Company's stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to
the contractual life of stock-based compensation instruments. The dividend yield assumption is based on historical patterns and future
expectations for the Company dividends. For the year ended December 31, 2022, assumptions used to estimate the fair value of stock options
on the grant dates are as follows:
Options
granted in
May 2021
Options
Amended in
January, 2022
Options
Amended in
May, 2022
Options
Amended in
December, 2022
Risk-free interest rate
0.81
%
1.66
%
0.81
%
4.44
%
Expected life of the options
5
years
4.33
years
4.03
years
3.43
years
Expected volatility
96.0
%
96.0
%
96.0
%
96.0
%
Expected dividend yield
-
%
-
%
-
%
-
%
Fair value
$
7,232,526
$
2,106,163
$
1,652,811
$
689,971
F-
33
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13 — Equity (
continued)
2018 Stock option plan
A summary of activities of
the stock options for the years ended December 31, 2022, 2021 and 2020 is presented as follows:
Number of
Share
Options
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
US$
Year
US$
Outstanding as of December 31, 2019
1,350,500
4.72
5.37
-
Granted
-
-
-
-
Expired, forfeited or cancelled
-
-
-
-
Outstanding as of December 31, 2020
1,350,500
4.72
4.37
-
Granted
7,604,964
1.22
-
Exercised
(
58,110
)
Outstanding as of December 31, 2021
8,897,354
1.74
4.23
-
Granted
-
-
-
-
Cancelled
(
1,050,500
)
4.72
-
-
Outstanding as of December 31, 2022
7,846,854
1.30
3.49
Exercisable as of December 31, 2022
7,846,854
1.30
3.49
-
For the year ended December 31,
2022, 2021 and 2020, total share-based compensation expenses recognized for the share options granted were $
3,336,452
, $
5,873,566
and
$
986,629
, respectively. As of December 31, 2022 and 2021, there were $
nil
and $
2,415,370
unrecognized share-based compensation expenses
related to the share options granted, respectively.
Private placement
On August 24, 2020, Company
closed certain non-broker securities purchase agreements (the "SPAs") with certain "non-U.S. Persons" (the "Purchasers")
as defined in Regulation S of the Securities Act of 1933, as amended (the "Securities Act") pursuant to which the Company
agreed to sell an aggregate of
8,800,000
ordinary shares, $
0.00166667
par value per share of the Company ("Share"), at a per
share purchase price of $
2.00
(the "Offering"). The net proceeds to the Company from such Offering were $
17.6
million.
On September 1, 2022, the
Company entered into a securities purchase agreement with White Lion Capital LLC ("White Lion"). Pursuant to the agreement,
White Lion shall purchase up to $
15
million of the Company's ordinary shares at the lowest daily VWAP of the Ordinary Shares during
the Valuation Period by
97
%. As of December 31, 2022, the Company issued
22,875,000
ordinary shares and net proceeds was $
3,519,202
. In
2023, the Company issued
5,000,000
ordinary shares and net proceeds was $
491,180
.
On September 9, 2022, the
Company entered into a securities purchase agreement with YA II PN, LTD.. Pursuant to the agreement, YA II PN, LTD. shall purchase up
to $
30
million of the Company's ordinary shares at the market price by
96
%, and the company shall issue to YA II PN, LTD.
223,880
ordinary shares as a commitment fee. As of December 31, 2022, the Company issued
17,035,074
ordinary shares and net proceeds was $
3,511,317
.
The Company subsequently issued
223,880
ordinary shares for commitment fee on January 1, 2023. In 2023, the Company issued
26,235,245
ordinary shares and net proceeds was $
2,758,873
.
On December 29, 2022, the
Company entered into a securities purchase agreement with TBS Capital LP, ("TBS"). Pursuant to the agreement, TBS shall purchase
up to $
15
million of the Company's ordinary shares at the market price by
96
%, and the company shall issue to Yorkville
223,880
ordinary shares as a commitment fee. The Company issued
223,880
ordinary shares for commitment fee on December 15, 2022. In 2023, the
Company issued
6,250,000
ordinary shares and net proceeds was $
530,000
.
F-
34
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13 — Equity (
continued)
Conversion of convertible notes
On November 16, 2020, the
Company issued an aggregate of
27,777,776
restricted ordinary shares, par value $
0.00166667
per share, of the Company, to the conversion
note holders. The fair value of the conversion note was assessed at $
65,258,333
upon conversion based on the binomial model assessed by
the independent valuation firm.
On August 13, 2021, The Company
issued an aggregate of
3,054,591
ordinary shares, par value $
0.00166667
per share, of the Company, to YA. The fair value of the conversion
note was assessed at $
4,445,433
upon conversion based on the binomial model assessed by the independent valuation firm.
On September 8 2021, Uptown delivered conversion notice for all convertible
notes in an aggregate of principle of $
1,650,000
. The Company issued an aggregate of
1,676,437
ordinary shares, par value $
0.00166667
per share, of the Company, to Uptown. The fair value of the conversion note was assessed at $
1,897,739
upon conversion based on the binomial
model assessed by the independent valuation firm.
On May 25, 2022, The Company
issued an aggregate of
5,929,838
ordinary shares, par value $
0.00166667
per share, of the Company, to YA (Note 11). The fair value of
the conversion note was assessed at $
2,261,270
upon conversion based on the binomial model assessed by the independent valuation firm.
On December 12, 2022,
The Company issued an aggregate of
13,981,758
ordinary shares, par value $
0.00166667
per share, of the Company, to Streeterville (Note
11). The fair value of the conversion note was assessed at $
1,534,654
upon conversion based on the binomial model assessed by the independent
valuation firm.
Shares issued for reserve
On August 5, 2021, the Company
issued
4,014,964
ordinary shares held in an escrow account as reserve solely for potential stock options. On September 20, 2022, the Company
issued
2,416,650
ordinary shares held in an escrow account as reserve solely for potential stock options. As of December 31, 2022, no
shares were transferred to the holders.
At the market("ATM") offering
On February 23, 2021, the
Company entered into a Sales Agreement (the "Sales Agreement") with A.G.P./Alliance Global Partners, as sales agent (the "Agent"),
pursuant to which the Company may offer and sell, from time to time, through or to the Agent, as sales agent and/or principal (the "Offering")
up to $
30,000,000
of its ordinary shares, par value $
0.00166667
per share (the "Shares"). Any Shares offered and sold in the
Offering will be issued pursuant to the Company's Registration Statement on Form F-3 (the "Registration Statement")
filed with the Securities and Exchange Commission (the "SEC") on February 23, 2021, and the sales agreement prospectus that
forms a part of such Registration Statement, following such time as the Registration Statement is declared effective by the SEC, for an
aggregate offering price of up to $
200
million. For the year ended December 31, 2021, the Company sold
1,626,327
ordinary shares, par
value $
0.00166667
per share, through the ATM offering with net proceeds of $
5,128,477
. For the year ended December 31, 2022, the Company
sold
56,800
ordinary shares, par value $
0.00166667
per share, through the ATM offering with net proceeds of $
56,449
, the amount was received
on January 28, 2023.
Shares issued for long-term investments
In connection of the long-term
investment of Smartconn, on January 20, 2022, the Company issued
17,138,305
ordinary shares to the original shareholders of Smartconn
as consideration of
19.99
% equity interest. The fair value of the shares issued amounted to $
8,305,222
.
In connection of the long-term
investment of Boxinrui on June 28, 2022, the Company issued
19,942,553
ordinary shares to the original shareholders of Boxinrui as consideration
of
15
% equity interest. The fair value of the shares issued amounted to $
6,674,772
. On December 28, 2022, the Company further issued
55,300,530
ordinary shares to the original shareholders of Boxinrui as consideration of
20
% equity interest. The fair value of the shares issued
amounted to $
4,446,163
.
In connection of the long-term
investment of Chenbao, on August 24, 2022, the Company issued
5,756,481
ordinary shares to the original shareholders of Chenbao as partial
consideration of
5
% equity interest. The fair value of the shares issued amounted to $
1,844,377
.
In connection of the long-term
investment of DTI, on November 1, 2022, the Company issued
55,506,750
ordinary shares to the original shareholders of DTI as consideration
of
19
% equity interest. The fair value of the shares issued amounted to $
9,058,701
.
F-
35
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13 — Equity
(continued)
Additional paid-in capital
As of December 31, 2022 and
2021, additional paid-in capital in the consolidated balance sheet represented the combined contributed capital of the Company's
subsidiaries.
Statutory reserve
Under PRC law, the Company's
subsidiary located in the PRC (collectively referred as the ("PRC entities") are required to provide for certain statutory
reserves. The PRC entities are required to allocate at least
10
% of their after-tax profits on an individual company basis as determined
under PRC accounting standards to the statutory reserve and has the right to discontinue allocations to the statutory reserve if such
reserve has reached
50
% of registered capital on an individual company basis.
The Company's subsidiaries
in PRC had accumulated deficits for the years ended December 31, 2022 and 2021, as a result, the statutory reserve balances were
$
nil
as of December 31, 2022 and 2021.
Note 14 — Commitments and contingencies
Contingencies
In the ordinary course of the
business, the Company subject to periodic legal or administrative proceedings. The Company accrues liability when the loss is probable
and reasonably estimable. On April 28, 2022, Shengfeng Zeng (a former employee) filed a lawsuit against the Company for a debt dispute
of $
71,282
(RMB
491,647
). On January 10, 2023, the Court ordered the Company to pay Shengfeng Zeng $
71,282
(RMB
491,647
). The Company filed
an appeal on March 6, 2023. The Company recorded the disputed amount $
69,159
(RMB
477,001
) in the accrued liabilities based on the best
estimate of the management as of December 31, 2022.
Note 15 — Segment reporting
For the years ended December
31, 2022 and 2021, the Company's CODM reviewed the financial information of the business carried out by the Company on a consolidated
basis. Therefore, the Company has
one
operating segment, which is the provision of global trade software application and technology services.
The Company operates solely in the PRC and all of the Company's long-lived assets are located in the PRC.
The following table presents
revenues by the service lines:
For the Years Ended December 31,
2022
2021
2020
REVENUES:
Application development services*
$
3,847,199
$
20,323,422
$
21,985,214
Consulting and technical support services
2,538,500
4,555,352
3,797,354
Subscription services
758,526
936,913
881,443
Trading revenue
3,338,584
6,277,141
-
Total revenues
$
10,482,809
$
32,092,828
$
26,664,011
*
For
the years ended December 31, 2022, 2021 and 2020, certain application development service arrangements included sales of IT equipment.
Such revenue of $
2,609,531
, $
14,472,010
and $
6,299,982
was included in the application development service revenue for years ended December
31,2022, 2021 and 2020, respectively.
F-
36
POWERBRIDGE TECHNOLOGIES CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 16 — Subsequent events
Long-term investments
On January 5, 2023, the Company
entered into an equity transfer agreement with a shareholder of Smartconn which the Company agrees to purchase
31
% equity of Smartconn
at
90
% of the appraisal price. The consideration of the Acquisition will be paid in the form of
114,899,222
newly issued shares of the
Company. The acquisition closed on January 18, 2023. Prior to the Acquisition, the Company held
19.99
% in Smartconn, which together
with the newly acquired shares, the Company holds in total
50.99
% in Smartconn.
On
March 21, 2023, the Company entered into an equity transfer agreement with a shareholder of DTI which the Company agrees to purchase
32
%
equity of DTI for a consideration of approximately RMB
96.7
million. The consideration of will be paid in the form of
167,592,318
newly
issued shares of the Company. The acquisition closed on March 24, 2023
.
Prior to the Acquisition,
the Company held
19
% in DTI, which together with the newly acquired shares, the Company holds in total
51
% in DTI.
On March 28, 2023, the Company
entered into an equity transfer agreement with fifteen individual shareholders (the "Relevant Shareholders") of BOXINRUI INTERNATIONAL
HOLDINGS LIMITED ("Boxinrui"), pursuant to which the Company agreed to further acquire
65
% equity interest in Boxinrui for
a consideration of approximately US$
25.8
million, which shall be satisfied by way of allotment and issue of an aggregate of
276,448,625
shares to the Relevant Shareholders (the "Third Acquisition"). The Company will hold an aggregate of
100
% equity interest
of the Boxinrui following the closing of the acquisition.
Bank loans
On January 16, 2023, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $
520,174
for a term of one year and at a fixed annual
interest rate of
4.20
%. The bank loan was guaranteed by the Company's CEO, CEO's spouse and a third party.
On January 19, 2023, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $
1,449,864
for a term of one year and at a fixed annual
interest rate of
4.20
%. The bank loan was guaranteed by the representative of Zhuhai Powerbridge and pledged approximately $
2.4
million
fixed assets as the collateral to secure the loan.
On March 14, 2023, Powerbridge
Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $
204,758
for a term of one year and at a fixed annual
interest rate of
4.20
%. The bank loan was guaranteed by the Company's CEO, CEO's spouse and a third party.
Convertible notes
From January 2023 to March
2023, Streeterville delivered conversion notice for convertible notes in principle of $
2,427,582
. The Company issued an aggregate of
26,849,931
ordinary shares, par value $
0.00166667
per share, of the Company, to Streeterville.
Equity financing
The Company issued
5,000,000
ordinary shares and received approximately $
0.5
million from White Lion (Note 13) in 2023.
The Company issued
26,235,245
ordinary shares and received approximately $
2.8
million from YA II PN, LTD. (Note 13) in 2023.
The Company issued
6,250,000
ordinary shares and received approximately $
0.5
million from TBS (Note 13) in 2023.
New subsidiary
To explore metaverse business,
the Company established one new subsidiary in China. Hunan Powerverse Digital Co., Ltd. was established on March 9, 2023 and the Company
has
51
% equity interest.
F-37